Investing News Good or Bad

As I become more and more involved with the world of investing, I have noticed one thing that causes me to get a little annoyed. That one thing is how financial news is reported. In a world that has everyone connected and up-to-date with so much information; I have begun to wonder how much that impacts the stock market.

In my opinion, too much news has played upon the fears of many investors. This has turned an already risky game into an extremely volatile game. This is because to many investors simply react out of emotion instead of finding the facts out for themselves. I also think some of the professional investors on Wall Street play on the emotions of the small investors.

So I do pose the question as to whether the markets may become too volatile in the future as people are connected 24 hours a day through so many new technologies. Will this constant access to information make it better or worse for the average investor? In the old days before the internet and 24 hour news channels; I would think less irrational selling of stocks based on news and information would have occurred. Today anyone who invests in stocks online is slammed with news good and bad. Some may say that all this information is a good thing, and investors need to do their own research before putting money in or taking money out of the stock market. I do agree that every investor is responsible for their own actions. However, I think there is increasing number of new investors who will fall victim to their emotions based on too much information.

I realize financial news stories and the technologies that distribute them can not be stopped. However, I do feel that media outlets need to put greater care into what they publish. Comments that may make a stock price go up or down quickly that are not based on realities, or may be over-exaggerated could be playing on the emotions of many investors.

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Author: Chad Surges

Degree: Bachelor of Science (Business)

Career: Logistics Executive

Just One Guys Stock Market Opinion

My feelings are definitely mixed when it comes to the world of investing. On one hand, I truly believe if the average person was taught properly how to begin investing when they are young, people would have a much better quality of life. If I have one regret about my own investing experience it is that I did not take investing seriously at a young age. I do feel that if a person takes their time to learn the proper techniques, and can control their emotions and greed they can be very successful investing their money.

On the other hand, I feel that investing brings out the worst in some people causing them to take risk, and hurt not only themselves but their families as well. Too many people, in my opinion, simply do not understand the risk involved when they invest in the stock market. I think in this day and age easy access to online trading accounts has turned the stock market into more of a gambling environment, where get rich quick fantasies run wild.

I also believe that there are many unethical Wall Street investors who prey on the get rich quick dreams of small investors. There is simply too much behind the scenes action going on with large investors and corporations that make it hard for the individual investors to compete fairly day-to-day.

With all that being said, in the long run investing is better for everyone that goes about it wisely. If you put in the time to learn the ins and outs of the markets you can be successful. I just feel the playing field could be better controlled so that the large Wall Street investors cannot have the upper hand on the small individual investors. Will this ever happen? I highly doubt it because we live in a power driven society, where the top 1% of wage earners are in control.

For more information please visit:

Author: Chad Surges

Degree: Bachelor of Science (Business)

Career: Logistics Executive

Mueller Water Products "a" And "b" Shares Are Mispriced

Some smart investors see value in Mueller Water Products (MWA). They're probably right; but, Mueller isn't the kind of situation that jumps out at me as a clear bargain I can understand. However, there is something peculiar about this situation that makes it worth writing about. (Note: The information in this article was current as of Friday, April 6th, 2007 – please consult current market quotes).

There are two shares of Mueller Water Product common stock – Series A common stock and Series B common stock. There are roughly three times as many B shares as A shares. The A shares and B shares have identical economic rights. So, ownership of all of the B shares would provide a roughly 75% economic interest while ownership of all of the A shares would provide a roughly 25% economic interest.

Here's where things get interesting. "Shares of Series A common stock and Series B common stock generally have identical rights in all material respects except Series B shares have eight votes and each Series A share has one vote per share."

So, what's the premium on the B shares? There is none. The last trade on Mueller A shares (MWA) was at $13.98; the last trade on Mueller B shares (MWA.B) was at $13.64. Buyers of the A shares are currently paying $0.34 a share more to reduce their voting power by 87.5%.

You can't convert A shares into B shares or B shares into A shares. If you could, there would be a profit in simply buying, converting, and selling. Unfortunately, you can't do that. So, there's no "manual" arbitrage opportunity here. Obviously, you can bet that the discount on the B shares will be eliminated – but, the market has to close the gap for you.

Regardless, there is a nonsensical discrepancy in price between the A shares and the B shares.

Anyone looking to make a new investment in Mueller should buy the B shares. There's no reason to touch the A shares until they are trading at a discount to the B shares.

Owners of Mueller A shares who currently hold those shares in a manner that would cost them less than $0.34 a share to sell should immediately begin selling their A shares and putting the proceeds into the B shares. Doing so would slightly increase their economic interest in Mueller's business, greatly increase their voting power – and, over the long-term, possibly provide additional appreciation in the share price, if and when the B shares consistently trade at a premium to the A shares.

Do the B shares have to trade at a premium to the A shares? Technically, no. But, in the future, it's possible that circumstances may make the B shares far more attractive to certain investors. The A shares are extremely unattractive to any large shareholder who isn't committed to complete passivity as close to 96% of the votes are tied to the B shares – the A shares are essentially non-voting shares.

Furthermore, there are fewer A shares, so it would be more difficult for a large investor to acquire a meaningful economic interest via the A shares without moving the price of those shares.

While some investors might have very good reasons for buying the B shares when they trade at a higher price than the A shares – no one has a good reason for buying the A shares when they trade at a higher price than the B shares.

Right now, the choice seems simple – dump the A shares; buy the B shares.

Geoff Gannon writes a daily value investing blog and produces a value investing podcast at Gannon On Investing.

The Wonders Of Online Currency Trading

Without a doubt, the most significant impact to have occurred on the foreign

exchange market in the past 20 years has had little or nothing to do with foreign

currencies themselves – it has been the advent of first computer technology and

then the Internet. Prior to both these technological breakthroughs, profit taking

from currency trading was the sole realm of large institutional investors. Today,

thanks to both of these online currency trading means everyone has the chance

to make a profit from FOREX trading.

Hardware needed to start online trading

If you are interested in taking advantage of the opportunity to make some profits

from online FOREX trading, then you will need to have access to either a

desktop computer or a laptop computer. You will also need to have access to the

Internet. Ideally your access to the internet should be broadband. Once you

have these in place you're almost ready to start.

Software needed to start online trading

As well as having access to either a desktop or laptop computer, you will also

need to have access to software programs that can hep you to analyse your

current investment strategy. Here you can either decide to have your software

program via the access to the Internet, or you can elect to download a software

program to your computer so that you can have access to it and work 'off-line'.

Either way, although it possible to currency trade online without a software

program in place, it is not a recommended course of action to take.

Opening an online brokerage account

Once you have your hardware in place, you can also open an online FOREX

brokerage account by which to transact your foreign currency trades. Some

things you need to bear in mind when opening an online account include: (i)

whether or not the software program will be provided to you for free; (ii) whether

or not you'll be paying a commission on trades or whether the broker will be

making their money through their 'spread' (if not both); and (iii) whether or not

you can leverage trade using your online broker.

You are now in a position to start trading foreign currencies. However, before

you execute your first online trade, it is highly recommended that you spend

some time educating how online trades work by taking the opportunity to learn

foreign exchange trading using a dummy FOREX trading account. Once you feel

you have sufficiently mastered your way around all of these, you are ready to

start online currency trading.

Article Written By J. Foley

Article Written By J. Foley

The Economics of Expectations

Economies revolve around and are determined by "anchors": stores of value that assume pivotal roles and lend character to transactions and economic players alike. Well into the 19 century, tangible assets such as real estate and commodities constituted the bulk of the exchanges that occurred in marketplaces, both national and global. People bought and sold land, buildings, minerals, edibles, and capital goods. These were regarded not merely as means of production but also as forms of wealth.

Inevitably, human society organized itself to facilitate such exchanges. The legal and political systems sought to support, encourage, and catalyze transactions by enhancing and enforcing property rights, by providing public goods, and by rectifying market failures.

Later on and well into the 1980s, symbolic representations of ownership of real goods and property (e.g, shares, commercial paper, collateralized bonds, forward contracts) were all the rage. By the end of this period, these surpassed the size of markets in underlying assets. Thus, the daily turnover in stocks, bonds, and currencies dwarfed the annual value added in all industries combined.

Again, Mankind adapted to this new environment. Technology catered to the needs of traders and speculators, businessmen and middlemen. Advances in telecommunications and transportation followed inexorably. The concept of intellectual property rights was introduced. A financial infrastructure emerged, replete with highly specialized institutions (e.g., central banks) and businesses (for instance, investment banks, jobbers, and private equity funds).

We are in the throes of a third wave. Instead of buying and selling assets one way (as tangibles) or the other (as symbols) - we increasingly trade in expectations (in other words, we transfer risks). The markets in derivatives (options, futures, indices, swaps, collateralized instruments, and so on) are flourishing.

Society is never far behind. Even the most conservative economic structures and institutions now strive to manage expectations. Thus, for instance, rather than tackle inflation directly, central banks currently seek to subdue it by issuing inflation targets (in other words, they aim to influence public expectations regarding future inflation).

The more abstract the item traded, the less cumbersome it is and the more frictionless the exchanges in which it is swapped. The smooth transmission of information gives rise to both positive and negative outcomes: more efficient markets, on the one hand - and contagion on the other hand; less volatility on the one hand - and swifter reactions to bad news on the other hand (hence the need for market breakers); the immediate incorporation of new data in prices on the one hand - and asset bubbles on the other hand.

Hitherto, even the most arcane and abstract contract traded was somehow attached to and derived from an underlying tangible asset, no matter how remotely. But this linkage may soon be dispensed with. The future may witness the bartering of agreements that have nothing to do with real world objects or values.

In days to come, traders and speculators will be able to generate on the fly their own, custom-made, one-time, investment vehicles for each and every specific transaction. They will do so by combining "off-the-shelf", publicly traded components. Gains and losses will be determined by arbitrary rules or by reference to extraneous events. Real estate, commodities, and capital goods will revert to their original forms and functions: bare necessities to be utilized and consumed, not speculated on.

Sam Vaknin ( ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East.

He served as a columnist for Central Europe Review, Global Politician, PopMatters, eBookWeb , and Bellaonline, and as a United Press International

(UPI) Senior Business Correspondent. He was the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Visit Sam's Web site at

Warren Buffett's Berkshire Hathaway Discloses 10% Stake in Burlington Northern

Warren Buffett's Berkshire Hathaway has disclosed a greater than 10% stake in Burlington Northern Santa Fe (BNI). Through three insurance subsidiaries (Columbia, National Indemnity, and National Fire & Marine) Berkshire beneficially owns 39,027,430 shares of Burlington Northern common stock according to an SEC filing made on Friday, April 6, 2007.

Berkshire's most recent reported purchase was made on Thursday, April 5th, and consisted of 1,219,000 shares purchased at $81.18 each.

Upon presenting the familiar table of Berkshire's major investment in his most recent letter to shareholders, Buffett wrote:

"We show below our common stock investments. With two exceptions, those that had a market value of more than $700 million at the end of 2006 are itemized. We don't itemize the securities referred to, which have a market value of $1.9 billion, because we continue to buy them. I could, of course, tell you their names. But then I would have to kill you."

It appears that Burlington Northern was one of the two large positions Berkshire was accumulating. Clearly, Berkshire has been a big buyer of Burlington Northern shares since Buffett wrote his letter to shareholders, because Berkshire's position now has a market value of approximately $3.2 billion.

The size of the investment will make it one of about a half dozen large positions held by Berkshire. This investment dwarfs most of Berkshire's investments made during the past few years – it is already considerably larger than any other single investment recently disclosed by Berkshire including the investment in Posco (PKX), US Bancorp (USB), ConocoPhillips (COP), Anheuser Busch (BUD), Johnson & Johnson (JNJ), USG (USG), Wal-Mart (WMT), and Tesco (TSCDY).

Simply put, this is the biggest single common stock investment made by Berkshire in a long time.

It's big news – and it seems to have caught most Buffett watchers off guard. GuruFocus, a site that tracks Buffett's moves religiously, announced that its contest to name the two mystery investments alluded to in Buffett's annual letter had failed to turn up any guesses that Burlington Northern would be among the pair.

Burlington Northern Santa Fe operates one of the largest rail systems in North America. The system includes 32,000 route miles of track of which 23,000 are owned route miles.

In recent years, Burlington Northern Santa Fe has been buying back stock. The company expects share repurchases will remain the primary use of its free cash flow. In fact, Burlington Northern may allow "a moderately higher level of debt" so the company can "devote additional financial capacity to share repurchases".

In that respect, at least, it is a typical Berkshire investment.

Geoff Gannon writes a daily value investing blog and produces a value investing podcast at Gannon on Investing.

Charles Dow's Theory - Part 1

Charles Dow's theory is explained in a series of three articles. This being the first.

Dow Theory is about how to build wealth from the nature of movements in the stock market. Charles Dow (1851-1902) was a journalist, the first editor of the Wall Street Journal, and a co-founder of the Dow-Jones Company, and his theory was taken from editorials that he wrote.

Dow Theory was later refined by William P. Hamilton and others.

But Dow himself never used the term "Dow Theory."

The Theory does not just look at Technical Analysis and price action, but also at Market philosophy.

Many ideas put forward by Dow and Hamilton became axioms in the stock market.

Lot's of people think: "it will be different this time," but Dow Theory has proven that the Stock Market behaves the same today as it did 100 years ago.

Charles Dow developed his Theory from the analysis of Market price action late in the 1800s.

Dow never actually wrote a book on his Theory, but he did, as the editor of the Wall Street Journal, write editorials on his views. And it wasn't until later that William Hamilton refined Dow's Theory through a series of articles, and later in his book: The Stock Market Barometer, that the Theory was explained in detail.

But before you can understand Dow Theory, there are three assumptions that must be accepted.

The first of these is that the Primary trend of any Market cannot be manipulated.

And Hamilton agreed with this. He asserted that intra-day, day-to-day, and even Secondary movements could be prone to manipulation as these were just short movements of a few hours or even a few days. Hamilton also referred to the possibilities of individual stocks being manipulated.

The Primary, long-term trend of the Market would always keep intact, even if stocks were manipulatedin the shorter term. Manipulating a Market was virtually impossible according to Hamilton. Any Marketis just too large for manipulation to happen.

In the early 90s the UK Government tried to hold the British Pound against other currencies but even the fourth largest industrial country in the world could not influence things. The currency markets are huge. And in 1979/80 there was an attempt by the Hunt Brothers to manipulate the price of silver. Silver did skyrocket (temporarily) but only for it to come back down and continue its bear trend (after the attempt to corner the market was discovered).

The second assumption Dow Theory makes is that the markets reflect eveything. The price in the Market represents the sum total of all the hopes, the fears, and expectations of everyone in it.

Also, interest rate movements, earnings, elections, and anything else are already priced into the markeet.

Unexpected events will happen - but they only usually affect the short term trend. The Primary trend stays intact.

Hamilton observed that the Markets could sometimes act negatively on good news. He argued that the Market acts as a barometer of current events. When news comes out, that is already shown in the price - the Market has already acted.

This explains very nicely the Stock Market axiom: "Buy the rumor, sell the news!"

And the third assumption to be taken into account when studying the Theory of Dow is that it's not perfect. No theory can be.

Dow and Hamilton both knew this.

Dow Theory, like any other theory, is just a set of guidelines, albeit, fairly reliable ones.

But the Theory does provide a mechanism that removes a lot of emotion from your trading. And emotion is the number one reason most people fail.

By taking emotion out of trading helps you see what is actually there, NOT what you want to see that is there. And Dow's Theory eliminates the ambiguity.

Dow Theory is extremely efficient at identifying the Primary trend of any Market. It is not intended as a short term indicator.

Neither Hamilton nor Dow intended for the Theory to predict short-term movements beause they admitted that such movements could be manipulated. but in no way could Primary Market movements be manipulated.

They were not interested in predicting the exact tops or bottoms of a Market, in fact, nobody can reliably do that, they were interested in establishing the main (Primary) trend and capitalizing on the big moves. Even if these were to take months, or in some cases, years.

It is human nature to get caught up in sudden price movements, or forget the main trend. But once identified, this is where the big profits are.

In the next article I will get into the heart of Dow Theory - daily fluctuations, Secondary movements, and Primary movements,and the three phass of Bull and Bear Markets.

Understand Dow Theory and you will have a good overall picture of what is going on in your chosen Market.

Peter Woodhead is the webmaster of several Stock Market related websites. He specializes in the old classics. And his Long Lost Stock Trading Secrets contains works by Charles Dow (Scientific Stock Speculation), William Hamilton (The Stock Market Barometer), and Richard Wyckoff (How I Trade and Invest In Stocks and Bonds).

March Investment Madness: The Financial Final Four

Although it may be hard to believe, there is more going on in the world than the NCAA Basketball Tournament. And even though it's not nearly as exciting as an expanded sports page, you will soon receive your March (investment) Tournament Program... in the form of Brokerage Firm Statements. What is this guy talking about? What correlation could there possibly be between an Annual Round Ball Tournament and an Investment Portfolio or its Management? Let's start with a few simplistic similarities: the total unpredictability of the end result; the interim ups and downs, emotionally and numerically; the media hype and expert commentary; the skill and coaching requirements. And a few of the differences: the long-term impact on people's lives; the possibility that all participants can achieve their goals; the open-ended time frame; the non-competitive nature of the event.

Revered Blue Chips (and Blue Devils) fall from grace on the financial hardwood and unknown Cinderellas gain fame and financial fortune with upset victories in both venues. Short-term interest rate gyrations produce an ebb and flow in fan momentum with each FRB meeting, and the betting changes, and changes again, looking for the winning team! BUT, if the legendary Greek was handicapping portfolio management teams, he would be smiling broadly and rubbing his hands together in anticipation of making odds in the Financial Markets! How cool is this, a game with no end. And as every gambler knows, the longer the play, the more likely it is that the "house" will win. In basketball and in finance, the road to the final four is built on four principles: the Quality of the team members (the portfolio), the Diversity of their offensive and defensive skills (Diversification reduces risk of loss), the generation of enough Income (points scored) to exceed projected expenses (points allowed), and Coaching, or the decision making capabilities of team Management.

If you recognize the importance of the Financial Final Four, you can insure that your investing experience will be a winning one. It's certainly easier than getting a team of athletes to the Big Dance. The recruitment of high quality players is the first step, and the similarities between identifying fundamentally sound companies and fundamentally adept players are fairly obvious. Players, who can't dribble with both hands, understand a pick and roll and hit the open man just aren't considered. Similarly, some securities score big while others mostly assist. But successful coaches don't gamble with unproven walk-ons too frequently.

The team needs diversity... quick and unselfish guards for ball control and play calling; tall and athletic forwards for scoring and rebounding; and a big man for intimidation and shot-blocking, if nothing else. Investment portfolios need an Asset Allocation plan that balances the Working Capital between growth and income securities... helping to keep the game plan intact, and the manager's focus on the teamwork needed for goal achievement. Team depth is essential.

The Final Four is comprised of the best teams, not necessarily the best players. The most successful teams will have the right combination of offense and defense to get the job done. You can't win without scoring, but you have to be proactive in limiting the other guys point production as well. If all of your starters contribute some points, and you have the depth to offset a surprise injury or foul trouble, your chances of success are heightened. It should come as no surprise then, that an investment portfolio with no income just isn't going to get the job done. And only with programmed income plus an occasional "three pointer" will the portfolio out shoot team inflation consistently.

It's not uncommon for the winning team to lack a superstar... we've all seen how easy it is for a well-coached team of not-quite-as-skilled internationals to upset second-generation prima donna Dream Teams. Sure, money, organizational size, and program reputation build the most successful college sports programs but the teams that make it to the Big Dance perennially have two things in common... coaching and recruiting. Freshmen with superior fundamentals must be selected to replace graduating upperclassmen... and the beat goes on.

Every successful team needs a decision-maker, someone who designs the game plan best suited to the skills of the players and the uncertainties of the opposition, one game at a time, but with an eye on the future... the final goal. Do we full court press, play man-to-man or zone, fast break, etc? There can only be one decision maker, and experience matters... big time! Investment portfolio management is no less of a decision makers' game. To make the right decisions, you need to know your players abilities and weaknesses, you have to develop the right combination to attain the goals you've identified, and you have be in there all the time making the decisions needed to keep your team at the top of its game. Best performers must be allowed to "graduate". Undervalued "freshmen" must be found. Patience is needed to see things through, etc.

But the investment game plays out over years instead of minutes and with a plan that needs to be adjusted knowledgeably, but infrequently (if it is being done properly). Understand the Financial Final Four, and you'll be in top hat 'n tails at your own Big Dance.

Steve Selengut

Professional Portfolio Management since 1979

Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"

Are you selling your stocks at the right time?

Limiting your losses and protecting your gains is the most important rule for every investor. Unfortunately, with the high volatility of today's stock markets, making an efficient decision on selling your investment is riskier and consumes more time than ever. Statistics show that most intuitive, individual investors lose this game sooner or later.

When it comes to the stock market, there is no place for emotions or intuition. Believing otherwise has led many amateur investors straight to bankruptcy. If you want to become a successful investor, you must exclude emotions from your trading, and spend some time on choosing a trading strategy that is right for you.

How would you limit the losses? It is all about selling at the right moment. A successful investor never puts emotions into trading, and sells as his sell strategy suggests. Ask yourself: what is my exit strategy? If you don't have a sell strategy, you don't have any trading strategy at all!

There are many trading strategies available, all having their pros and cons. Most require you to monitor your stocks very closely. If you don't have much time to spare to watch your investment, a strategy based on the Trailing Stop method may be right for you.

The Trailing Stop method has strong benefits over alternative trading strategies. A Trailing Stop limits your losses but not your gains, while not requiring you to constantly monitor the market to achieve best results.

It does not perform miracles, but uses proven, published mathematical methods to maximize your gains and minimize losses. Speaking broadly, the Trailing Stop method has to deal with just two things: the current stock price, and the stop selling price that represents the moment at which to sell your shares.

Without going much further into the complex mathematics, the Trailing Stop method raises your stop selling price when the stock goes up, but holds it when the stock goes down. If the stock falls enough to reach the stop selling price, a strategy based on the Trailing Stop method produces a recommendation to sell immediately. This strategy effectively limits your loss to a pre-defined percentage of your investment, while at the same time not limiting your potential profit.

A modified version of this strategy based on the Adaptive Trailing Stop takes an additional parameter into account. The Adaptive Trailing Stop method ties its selling recommendations to stock volatility, which represents how fast the particular stock can rise or fall. Volatility is arguably the most important factor when it comes to the decision to sell, as it is closely tied with the stock's risk factor. This method works best for modern stock markets, as today's stocks can start moving very fast.

Developing and following the right strategy can be a difficult and time-consuming process that does require certain skills in higher mathematics. If you don't have that much time to spare, try using a service that does all the monitoring and calculations for you, and gives you selling recommendations in plain English.

Sell@Market is a brand new service that uses the Adaptive Trailing Stop method as the sell strategy. It tracks and analyzes stock quotes daily on all major exchanges, including AMEX, NASDAQ, and NYSE, and re-evaluates the profit to risk ratio according to the chosen risk strategy. If a stock being monitored matches certain criteria, Sell@Market emails you a recommendation to sell.

There is nothing that even the best strategy can do to protect investments if an investor is not following its recommendations. Sell@Market helps you protect your investments by excluding emotions from trading. Just check your email daily and follow the system's recommendations to maximize your gains and minimize losses.

Always sell your stock just at the right time with Sell@Market! Try the service free of charge for 30 days. Sign up at: Dmitry is a co-founder of Sell@Market.

He has more than 5 years experience in investment analysis and more than 7 years experience in software development. Dmitry holds a MSc in Mathematics and Computing and a Degree in Economics and Finance. His certifications include SCJP 5.0.

Trading Forex? What's That?

Foreign exchange (FOREX) trading, simply put, is the concurrent buying and trading of different worldwide currencies. Established in 1971 as an interbank, interdealer market, it has grown into the single largest financial market in the world at trades of roughly $2 trillion per day.

Today, the average individual can sit at home and trade on the Forex 24 hours a day, seven days a week. But as must be noted about trading on this worldwide currency exchange, such investments carry a high level of risk. After careful consideration of an investor's level of experience, financial objectives and acceptance of the risk involved, Forex trading education is absolutely necessary.

In order to essentially grasp a workable understanding of the market, traders must be familiar with the history, strategies and related gimmicks found all over the Internet.

The idea of becoming a successful Forex trader leaves millions of personal investors searching for a magic, money-making answer. Unfortunately, most new traders fail within the first year and, in the meantime, lose thousands of dollars learning the basics of Forex trading education the hard way. Thousands of dollars are spent on profitless educational programs, fast keys to success and software that systematically cannot do the trading in place of the investor.

In essence, the answer to making money trading in this market isn't just a magic word, a computer program or an ounce of luck. It takes quality forex trading education from a knowledgeable, reliable, experienced source.

Success on the Forex lies in learning and implementing precise, straight-forward strategies that are practical and proved over time. It takes a practical, forex trading education program designed to help traders understand the price momentum of the Forex use that in a way that suits individual financial situations, risk tolerance levels and personality.

Forex trading education cannot and will never be a magic, money-making formula. It isn't a software system that tracks currency price shifts or other investor's moves. It is a broad understanding of the market, a personal understanding of the investor's goals and willingness to work in obtaining them and the experience that comes with trading.

A good forex trading education package must include home study training courses, live online or on-site classes and weekly live market Web instruction to really stand apart. Practice and repetition are necessary to understanding the trading process and constant, available interaction with trading pro's and veterans must be implemented in the learning process.

A properly educated trader understand the significant details of how the currency market works, why the prices fluctuate and how to capitalize on its volatility and price momentum swings.

Without a basic understanding of the major currencies involved on the Forex, successful trading will be significantly hindered. Understanding the top-traded currencies like the U.S. dollar, the Euro and the Japanese yen will leave traders with more options in buying or selling, and therefore, will lead to increased exposure and experience because these currencies are considered the most stable.

In addition, knowing how to compute and predict the inflation and depreciation of the currency traded with can help to avoid massive losses. The profitability of implementing successful Forex trading education strategies is very high and within reach of anyone willing to put forth the effort to get there. Proper education leads to monetary success, and there is no way around that simple fact.

Every day, new traders enter the wide world of Forex trading, most with high expectations for quick profit and little effort. However, knowledge is vital to success. This isn't a game of luck. This isn't a game without inevitable losses. But in the end, successful Forex trading isn't only possible, it can be a reality. All it takes is a quality education.

To make it in the market you will need training. Specifically forex trading education. We specialize in getting your education level up fast. So look for us: forex trading education

Forex Training For You: The Cost

The largest financial trading market in the world. Open 24 hours a day, seven days a week. Two trillion dollars on the line every day. And it's all trade accessible from your personal computer.

Foreign exchange trading, often referred to as Forex trading, is potentially the key to monetary success in an open market. By trading foreign currency on an inter-bank, inter-dealer market, traders simply make money buying and selling any number of worldwide monies. But Forex training is essential to successful Forex trading. It's a simple equation with enormous implications toward success or failure in the market.

A fast-paced industry with sudden, unexpected changes happening every day, multiple times a day, this market is forever moving. With no centralized market location, forex markets are traded mostly over computer terminals around the world. A literal 24/7 market, trading begins in Sydney and opens around the globe as the day rolls on. First in Tokyo, then London and onto New York.

Truly unique as a financial market, traders get to experience the ups and downs of the economy based on real-time current events. From economic fluctuations in Tokyo to a natural disaster in Europe or the election of a new U.S. President, Forex traders feel the fluctuations. Essentially, the value of a country's economy or monetary power is mirrored in its financial situation. Trading on the Forex is like trading other countries based on their value.

Therefore, forex training is the key to success on this ever-changing worldwide market. Knowledge, training and a broad understanding of the basics and history of this institution is invaluable.

Foreign exchange is traded in currency pairs and involves the simultaneous buying of one currency and selling of another. More than 85 percent of all the daily transactions totaling $2 trillion dollars revolve around trading seven major currencies: U.S. Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Australian Dollar and Canadian Dollar. Trading these pairs allows for the best opportunities for financial success due to the incredible, nearly perfect liquidity of this market.

In recent years, technology and proper forex training has allowed for the Forex to transform into a trading revolution for the personal investor. In the past, only large investors and corporations could set foot in the market. Today, market makers and market participants and clients join together to make this interbank market a reality. The result: an efficient, low-price way to trade on a worldwide market.

Forex training must include a thorough understanding of how the trade process works. Essentially, there are two types of accounts: standard and mini. In a standard account, 1 contract controls $100,000 of currency with a margin requirement of $1000. A mini account controls $10,000 worth of currency with a $50 margin requirement. Therefore, the standard account has a leverage of 100:1, while the mini is at 200:1.

The minimum price increment measured is called a "pip," also known as a point. When comparing currency pairs, investors buy their base currency against another. For example, if an investor purchased the U.S. Dollar against the Euro at 1.2500 and the price increased, the amount of pips would increase by the ratio of the standard or mini account.

Major advantages to trading the market with essential Forex training include free real-time quotes and charts, no exchange fees, 24-hour liquidity and no price discrepancy between the one desired and the actual price on fills.

Trading the forex is an opportunity with great potential for monetary success if the knowledge gained is fully understood and implemented.

Want the best Forex Training? Need to know everything about the market but don't have the time? Our Forex Training seminars get right to the point and get you trained fast so you can compete in the market.

Forex Seminars In Todays Market

Trading global currencies in a market that reaches a volume of nearly $2.5 trillion every day can't be done successfully without a thorough understanding of the market. The Forex, with a 24-hour-a-day transaction period 46 times the size of all other futures markets combined, has potential for massive profitability.

The sheer volume of the market is favorable above all others due to its high liquidity, flexibility, and cost-effective transaction amounts. The average investor can trade alongside international bankers from the privacy of his or her personal computer.

In a world where currency trading courses abound, finding the right Forex seminars to fully understand the market are of utmost importance. The right course is the perfect solution for individual traders or institutions set on learning keys to Forex success. The only way to achieve financial stability and profitability on the market is through proper education, and Forex seminars can be the answer.

Forex seminars can be utilized on a variety of levels, from online Webinars to weekend on-site workshops or simple Podcasts. In some cases, a Forex professional trader can even visit institutions interested in a better understanding of the market their traders are investing in.

A comprehensive, educational workshop involves a few basic components: First, a course must teach the basics of the Forex market, from its history to its major growth in recent years. Without a basic understanding of the market investors are trading in, financial success is far from inevitable.

Even the most simple questions must be addressed: How does the Forex market work? What currencies should I trade? What technical indicators should I pay attention to? How do I identify trends? What type of entry and exit strategy should I follow?

For investors new to the market and for those who need a better understanding of where their money is going, the basics, the advantages of trading currencies and the use of leverage to magnify gains and losses is vital.

Second, a mastery of an individual's online Forex trading platform must be met. For day traders and swing traders, a vague understanding of their platform is the beginning of extensive trading mistakes. The right Forex seminars can hold the keys to this oft-occurring trading error.

Another typical error for new traders is investing in the market without an identified system. The right Forex trading system helps traders understand when buying and selling is necessary and profitable. Trading based solely on feelings or emotions is an easy way to lose money in this industry.

Finally, the ability to understand and analyze Forex charts will always lead to greater profitability. Such charts illustrate everything happening in the market at any specified time. Thus, Forex seminars that apply a technical analysis of analyzing charts is a necessity.

Training Webinars, seminars and workshops should always be done by professional or veteran Forex investors. A one-time-only workshop will be of little help if the student can't ask questions, refer back to the course at later dates or continue learning from further courses. Upon completion of a proper course, the opening of practice accounts or individual accounts with the investor's own funds is the next step. With the right training, success on the Forex isn't far away.

Looking for forex seminars that aren't going to waste your time and money? At forex center we realized that the get rich quick schemes will not make you rich. Our forex seminars give you good information.

The Daily Journey Of A Day Trader - What Prompted Me To Trade Shares For A Living

Having first dabbled in shares in about 1994 as a way of bettering my C&G savings account, I knew I could do it and would find it interesting (made 24% in year one and 20.4% year two, using only teletext, Investors Chronicle and no computer).

I had always fancied quitting paid employment by 50. That was looking like a pipedream, as i never made any surplus cash from any job I ever had (never volunteered to do overtime, never chased bonuses - preferred gardening).

At 49 the firm I worked for got bought by Americans of the type that make good Americans cringe. Time for a sharp exit. The only way I could raise capital to set up in business on my own (or to buy a cheap franchise) was to sell my modest terraced home in a S.Warks village, pay off the mortgage, downsize to something barely habitable in a very very cheap area, and invest whatever was left. That took me a year to arrange, during which I attended numerous franchise exhibitions and weighed up every type of business on every page of the Yellowpages, regardless of what field. Also, read some inspiring articles regarding individuals who had quit day jobs to become investors or traders. They all started with far more capital than the £25k I figured I would likely have. Cheapest houses were in rundown ex-mining areas (E.Midlands and S.Wales valleys) and were a very depressing prospect.

A headline in a Sunday Times article caught my eye; "If you thought house prices were rocketing - here's ten that sold for under £10k last week." One I think was a £2300 sale in London (wedged between railways - "You could buy it on your credit card"), a couple in Notts, most in South.Wales. Advantage to me of South.Wales was proximity to coast and hills and rivers. Didn't fancy any of the seriously dismal £8k valley terraced ones, but wondered if any estate agents with that low price mindset handled properties just outside those areas. Made full use of the company car, driving back and forth around the south side of Brecon Beacons National Park between Ammanford and Abergavenny, and sure enough - agents south of that line priced their properties north of that line much lower than did the posher agents in Llandeilo and Abergavenny. Ended up buying a 3bedroom detached house with forecourt parking and big back garden sloping down to a small river, 20 miles from the sea, 200yds from the park, for £23k. Scruffy and not totally watertight, but habitable. Had escaped the job with 7 weeks to spare before 50th birthday ;o)

The only worthwhile franchise prospects involved were too great an outlay, and would only work for someone prepared to put in far more effort than I could muster enthusiasm for. Various other ideas had come and gone. So despite warnings that I was way underfunded to do so, I went with trading shares. By then (Xmas 1997) we were seeing online brokers chopping their fees and finance sites providing new access to facilities, so it was clearly becoming more and more practicable. The overheads and regulatory costs involved in every other business were greater - in this they are minimal. Having no customers or employees to worry about is a huge advantage.

It seems to work.

For more information please check 'Diary of a Spreadbetter' which documents my trading activities and performance from week to week, spreadbetting

How to Successfully Navigate the Markets in 2007 & Beyond---Part I

Well, it happened again! At the end of February, 2007, the market experienced another precipitous drop when it was least expected. And in many cases, it did great damage to trading and investment portfolios across the country and the world. Thankfully, this kind of market shock does not happen often, but it happens often enough to require a defensive strategy to deal with it the next time it happens. And it will happen again and again, possibly again this year, but certainly in the years to come.

What is your #1 concern or question about trading the markets in 2007?

How can I forecast such events like the big market drop last week?

How do I know when the bear move will end?

How far will the market drop?

Is this a temporary move down in a bull market, or is this the beginning of a new bear market?

How can I minimize my losses?

What defensive strategies can I use in markets like this?

How can I manage risk exposure?

Interestingly, I received these same questions from traders all over the world - the United States, Australia, the United Kingdom, India, Canada, even Malaysia. The point here is that no matter where you are in the world or what market you trade, you tend to have the same concerns on how to deal with these issues. And that is because all markets are subject to this same behavior that was just experienced in the U.S. and China.

The Really Good News

My intent from the beginning was to write a brief report to help traders not only survive, but actually prosper when the market takes a hit. But after pouring through all these questions, I was inspired to take this report even further and to expose some of the actual strategies that, if used properly, have the potential to make even big dips in the market not so much of a big deal.

I also noticed something that didn't really surprise me… the "traders" that are the most confused about what to do when the markets take a hit are the ones that don't follow a complete trading method. Interestingly, I didn't receive many questions at all from my students who are trading with a complete method.

So with that in mind, let's get into some excellent strategies that will help you weather dips and bumps in the markets.

But here's my disclaimer: These strategies do not make up a complete trading method, so be sure to use them as a part of whatever your current trading method is. And if you don't currently have a complete method, you should find one immediately and study it thoroughly before placing another trade.

False Beliefs

But before I do, I want to address some false beliefs that work against us as traders. As many of your questions implied, many of you believe that the market is or should be forecastable, meaning that the sudden drop that just occurred in late February was knowable in advance and that the savvy trader could have taken steps to avoid losses.

On the contrary, I believe very strongly that the market is unforecastable and that no technical or fundamental analysis exists that is capable of such a forecast that could be used successfully by a trader. This is a very important point to clear up right at the outset of this report - relying on forecasts, or gurus, or technical indicators will not adequately forewarn of a precipitous drop.

Just look at what just happened in February, and how about the collapse of the NASDAQ beginning in 2000. The experts were of no help forewarning traders of these events. In fact, just a week before the February drop, several commentators where out there forecasting that the Dow would rise by more than 12% in 2007. That may well happen, but such a forecast is of no use to us traders in the here and now real world of trading.

Another false belief is that trading and market analysis must be complex. I believe that nothing could be further from the truth. In fact, I have found over the years that the more complexity I built into my trading strategies, the less effective they were.

What To Do

So you might be thinking at this point that you understand how a simple approach can be better but if the markets are unforecastable, what is a trader to do?

Well, just because the markets are unforecastable doesn't mean that we cannot use technical analysis to determine the prevailing market trend and then construct a trading strategy to trade within that trend being ever mindful that the trend could abruptly change at any time.

What this all boils down to is that we need a way to manage risk when trading the markets that does not depend upon forecasts, analysts, gurus, the media, etc. While no risk management technique can assure profits or the avoidance of losses, I believe it is possible for a prudent trader to follow a simple but powerful strategy that will dramatically improve the results that that trader would have otherwise achieved.

Good trading,

Bill Poulos

p.s. If you'd like to download this entire article, just go to

To Be Continued in Part II

Bill Poulos has been trading the markets since 1974. He's a retired automotive executive who holds a bachelor's degree in Industrial Engineering, and a Master's degree in Business Administration, with a major in Finance.

In his over 30 years of trading experience, Bill has developed dozens of trading systems and methods. In 2001, he formed Profits Run, Inc. to impart his trading experience and wisdom to others so they could shortcut their learning curve and ultimately potentially skyrocket their earnings in the markets.

Bill now has thousands of students all around the world, from all walks of life, and at all experience levels. He prides himself on providing honest and realistic trading education, and is known for the continuous and ongoing support and follow-up he offers his students.

Are The Forex Brokers My Friends?

This is a very good question and sadly not one that enough investors think to ask. After all, when anyone first enters into Forex trading there will always be a lot things that you don't know and your broker would seem to be the logical source of great information—right? Even the very notion of Forex trades being "commission free" is not actually accurate and it is therefore in the broker's best interest to convince any investor to trade because that is when the broker makes their money.

It is true that Forex brokers do not get paid the typical commissions found in securities or commodities transactions. Instead, these "middlers of the Forex, make their money from a host of activities relating to a trade, including:

• Buying/Selling currencies

• Converting and holding currencies

• Interest on deposited funds

• Rollover fees

In short, the Forex broker makes money from the difference between the bid and ask price. There was a time when only banks, major currency dealers, and other big players were the only ones who play in the Forex. However, brokers are often associated or somehow linked with an investment bank that guarantees the loans used to leverage a trade. These brokers buy a lot ($100,000) from a larger bank or investment vehicle and then sell it back to you—at the "ask" price.

The "bid" price is the amount that you can sell that position back to the broker for. If a position had an ask price of 1.1920 and a bid price of 1.1923 and you were to sell it immediately back to the broker, you would take a loss of .0003—or three pips. Those three pips are what the broker makes from the trade despite the fact that they technically have not charged a commission. Since the typical lot size on the Forex is $100,000, that means a trade costs $30 in the above scenario.

So, if the broker makes money from trades then it is likely they will advise you to trade often—maybe even advise setting really tight stops in order to prevent you from losing money while also creating more trades in the process. Trading too often on the Forex is not a great idea anyway because trends on the Forex tend to be towards long-term consistent price movements. Trading on news releases and increasing your number of trades puts you at greater risk of incurring loss.

Of course, just because a broker does make money from trades does not mean that they will provide you with bad information. Most brokers are very reputable and can provide you with sound investment advice. However, it is definitely better to understand the market and perhaps start out with "mini-lots" or even paper accounts before really jumping in with both feet. You will need a sound investment strategy, patience, and a lot of backtesting in order to be successful in Forex trading!

Article by Kent Douglas, author of "The Simple Forex Solution: The Easiest Currency Trading System Anywhere." To learn how you too can succeed in Forex and Currency Trading, please visit

How Do Forex Brokers Make Money?

It is one of the most talked-about advantages of trading on the Forex—the commission-free trades! Unfortunately, while we would all like to think that Forex brokers are just out there executing trades for the fun of it, the simple truth is that everyone needs to make money—even the brokers. While they may not charge a traditional commission, brokers on the Forex still make their money whenever trades take place. Brokers actually are compensated in a number of ways, including:

• Buying/Selling Currencies

• Earned interest on deposited funds

• Converting and holding currencies

• Rollover fees

It is in the buying and selling of currencies that brokers make the majority of their money. They make this money in something known as the "spread", or the difference between the asking and bidding price of the currency pair. The "ask" is the price a retail Forex trader would pay for a position. The "bid" price refers to the amount that an investor could then sell the position at.

The smallest unit of measure in Forex trading is known as a pip and it is equal to .0001 (except for the Japanese Yen, which is .01). The difference between the ask and bid price is typically only 3 or 4 pips and this is what the broker makes when buying and selling currencies.

A broker is actually a middleman and never actually charges anyone directly. Instead, a broker purchases a position from a larger investment institution and then sells it to the retail Forex trader while pocketing the difference between the two amounts. For instance, a broker might set the "ask" price at 1.250 and the "bid" price at 1.246. If the investor were to sell the position immediately, then the most they could sell it for would be the "bid" price of 1.246—or a loss of 4 pips. Since the typical Forex transaction is conducted in $100,000 lots, that means that the broker made $40 in that currency exchange.

The spread will vary depending on the broker and the currencies being traded. Typically, the spread averages between 3-5 pips. Unfortunately, brokers are necessary tools in the Forex trading game if for no other reason than the sheer size of the transactions. There is approximately 1.8 trillion dollars exchanging hands on the Forex every day and these transactions are conducted in $100,000 "lots" (there are also $10,000 mini-lots and even micro-lots). Thus, it is typical for Forex transactions to be highly leveraged with most traders only putting up $1,000 (or 1/100) in capital.

Forex brokers will tend to be partners or somehow associated with investment banks and similar institutions. These "backers" actually guarantee the loans used to leverage Forex trades—and without them—none of us could trade on the currencies markets unless we were willing to risk more than the 1% demanded by most brokers.

Yes, the brokers do make money when investors trade on the Forex but they do provide a genuine service. Just be careful to avoid trading too often because although the pips are small—they can disappear quickly especially when investors try to compensate for a loss by turning around and investing before doing their homework. Therefore, be wary of any Forex broker that advocates any form of "day trading" or the like—it's a very, very dangerous strategy to use in the most volatile and fluid market the world has ever known!

Article by Kent Douglas, author of "The Simple Forex Solution: The Easiest Currency Trading System Anywhere." To learn how you too can succeed in Forex and Currency Trading, please visit

Basic Stock Investing Strategy

Investing can sometimes be a difficult process, involving a mixture of skill, analysis, and luck. The stock market can often be very volatile thing, and even veteran stock investors can sometimes have trouble picking a good stock investment.If you like the idea of investing in stocks, then you'll be pleased to know that you can do so from the comfort of your own home. You can easily research and purchase stocks on the Internet through online brokerages. You can also trade stocks through a traditional broker, if you want the services of a full-service brokerage.

Before investing in any stock, be sure to ask yourself lot of questions about it. Always be analyzing, and never throw your money at a stock (or any kind of investment for that matter!) that you just aren't 100% sure of.If you don't have the time to get into the nitty-gritty of the stock market but still want to benefit from its growth potential, then you might consider investing in mutual funds. These offer a hands-off way of investing, where the manager of the fund will allocate exactly where the fund's investment capital goes. Mutual funds are known to diversify their investments across many different investments, so buying in with them is a great way to diversify your portfolio as well.All stellar investors have goals and a path, or strategy, laid out.

Depending on your goals, you'll generally know what kind of strategy to take. If you're young and are looking for high-growth and can take a little risk, then you'll want to be looking into high-growth stocks. If you want more security for your investment, then diversify your portfolio with mutual funds or bonds.Some people prefer to do-it-yourself approach to investors, but it would be wise to pursue the help and advice of a local financial planner. Not just any financial planner, make sure you get references. Their advice can prove to be invaluable if you let your financial goals be known.

Written by Jane Smith. Find more information on investment strategy or see accurate forex and investment charts

What Moves The Forex Markets?

Investors in any market, be it securities or currencies, wants to know what causes price fluctuations so they can predict them and make a profit. While stock investors research publicly traded corporations in order to make trading decisions, those on the Forex must consider what influences the currency exchange rates between nations. Because it is so volatile with significant fluctuations in short term prices, it is especially important for the Forex trader to understand what moves the markets in order to be successful and make a profit.

Partly because trades occur 24 hours a day between Sunday and Friday afternoon, the Forex is a very volatile market. Just as with equities, pricing on the Forex is influenced by economic and political factors facing the nations involved in the currency pair. Because the U.S. dollar is used to back 90% of all the transactions on the Forex and its economy plays such a significant role in the world economy, economic data released by the government will affect market prices—temporarily. Here are some of the prime releases that Forex scalpers or day traders tend to look at when determining whether or not to enter a position:

1. Interest Rate Decisions

2. GDP rate increase/decrease

3. Unemployment data

4. Inflation: Consumer/Produce price

5. Retail Sales

6. Consumer Confidence Surveys

7. Business Confidence Surveys

8. Trade Balance

9. Manufacturing Confidence Surveys

However, while all of these forces no doubt play a short term role in price movements on the Forex and other financial markets, their influence is very temporary and the prices soon reflect them. It is not common for Forex scalpers or day traders to enjoy long-term success because the volatile nature of the market makes losses more likely with more trading.

There is another force that does play a role in the movements of all financial markets: human behavior. Indeed, Psychology is a very big factor in any investment decision and its effects can be studied in financial charts. Four human emotions play very big roles in the price movements on the Forex:

· Greed

· Fear

· Faith

· Hope

Greed compels even technical traders to ignore stopping points and chase a trend too far—to the point of loss or losing a significant portion of profits. Once an exit point has been reached—cash out.

Fear of loss is a very common human emotion and it definitely causes many investors to take a loss too hard and quit investing. However, simply setting acceptable stop/loss orders will prevent you from losing more than you are comfortable with.

Even faith and hope can cause us to chase profits too far or not get out when losses start to mount. Technical analysis, continuous back testing, and sticking with an investment strategy while being open to adjustment—these are all common traits in the most successful traders. Although the economic indicators and news releases do play a short term role in prices, it is ultimately human Psychology that moves the Forex.

Article by Kent Douglas, author of "The Simple Forex Solution: The Easiest Currency Trading System Anywhere." To learn how you too can succeed in Forex and Currency Trading, please visit