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.