Monday, August 27, 2007

FOREX Trading - 5 Common Novice Trading Mistakes

In forex trading the odds are that 90% of traders lose. While forex trading looks simple it is not and if you want to join the winning minority dont make these common mistakes.

Here are your mistakes to avoid in no particular order of importance.

1. Trying to buy success

Its tempting to buy one of the courses or e-books sold on the net that promise you wealth for around $100.00, but common sense should tell you cant buy success in the manner.

If you really want to buy one - ask for the real time track record and see the profits the vendor has made. After all if he has made no money why should you trust his advice?

You will find in forex trading that most of these courses are sold by writers who have never traded in their lives, or failed brokers.

In most instances you wont get a real time track record. Dont fall for the hype.

2. Dont day trade

If you really want to lose money go ahead and day trade its the best way to wipe out your account equity quickly.

The odds are against you and the theory that you can tell where prices are going in such a short time period as a day is nonsense.

3. Understand and have confidence in your method

If you buy a method or do you own make sure you understand the logic it is based on or you will not be able to follow it with discipline.

If you dont have confidence in your method you wont have the discipline to follow it. If this occurs you dont have a method at all!

4. Choose a simple system

Its a fact in forex trading that simple systems work best and only contain a few indicators.

The more complicated a system is the more likely it is to break in the brutal world of trading.

Simple systems are easy to understand, easy to apply and have the best chance of making you money.

5. Work Smart Not Hard There is no correlation between how hard you work and how much money you make. You need to work smart not hard.

Get a simple system and once that is done and your trading should take an hour a day or less. Many traders are constantly chopping and changing systems looking for the holy grail but sadly it doesnt exist.

You can do it

The fact is everything about forex trading can be learned and anyone can learn the basics of good trading. To do this you must accept responsibility for your destiny.

No one else will give you success it comes from within.

All the information you need to start trading forex for success is on the net and its free. Get started by getting studying a technical breakout system and adding filters and you will see how easy it is.

To succeed you need to work smart, learn a method you have confidence in and then finally, have the discipline to trade it for long term success.


On all aspects of becoming a profitable trader and for an exclusive forex basics PDF visit our website at

Differences Between Products And Services

What are some of the main differences between products and services? And when are these relevant?

Tangibility versus Intangibility

Products are tangible. You can buy pork as a tangible product. You buy it, you ship it and sell it. In the same way as you buy stamps, cigarettes and cars. Financial service companies however, make it possible to exchange pork bellies Futures, on the Chicago Mercantile Exchange (CME). A future is (not the most simple example of) a service with which you can hedge your risk. In this last case, most of the people trading on the CME will never see or smell the pork bellies.

The ownership between products and services is different. A stock could be called a financial product that you own. You can place a stock order which might result in a transaction later on. You bank services a depot fee for saving you a lot of work. You cannot own a service.

Where the product is much more standardized, the service is tailor-made. Companies differentiate in offering products and services, but the variations between similar products of different producers are less prominent than the variations between services.

You can count products in the same way as you can count your money (or have your service you this information). A service is not countable, but is leveled; better than the best service is not possible. There is a limit in what a service can offer.

A product is produced by a manufacturing process. A service is offered by the utility element of companies; you subscribe to a service in the same way that you subscribe to your gas and electricity supplier.

And this brings us to the essential of these differences; changing from one (product approach) to the other (service offering) is very complex, because of the last mentioned differences. Not only the process is different but the style change you need to support this change Good Luck.

2006 Hans Bool

Hans Bool is the founder of Astor White a traditional management consulting company that offers online management advice. Astor Online solves issues in hours what normally would take days. You can apply for a free demo account


Managed Funds -- Growing Your Wealth without the Headaches

Managed funds are an easy way to invest wisely and with low risk. Investment in a fixed term deposit especially with a fund that invests in real estate is an easy way to grow to your wealth.

Apart from being a great way to have your money managed by investment professionals, managed funds also simplify the process of building and maintaining an investment portfolio. Instead of tracking a wide range of individual investments, your fund will keep track for you, and the progress of your investment is expressed in one simple unit price.

A Bit Here and a Bit There

With any investment strategy diversification is important to minimise risk. The resources available to financial institutions are usually greater than those of the individual investor, therefore diversification is much easier as part of a managed fund than it would be if you had to raise the capital for a truly diverse and therefore more secure investment yourself.

As an example, if you have $100,000 to invest and you choose to buy real estate, your $100,000 might buy you a small unit that you could rent out. Then your entire financial future hangs on the performance of this one investment. If houses in that area depreciate due to changes in the locale, or you have trouble finding or keeping tenants, or you find out three weeks too late that there are serious structural problems, your financial future is in jeopardy.

By comparison, a managed fund that invests in mortgages has the capital to speculate on a wide range of properties in diverse suburbs, with differing land values, various land uses (residential, commercial etc), and a much lower dependence on the performance of any single investment property. Your future no longer hinges on one little unit because its merely a part of a much larger portfolio than you could invest in on your own.

Choosing a Managed Fund

When youre choosing a managed fund its always tempting to just go with the one that offers the best term deposit rate. However, experience dictates that its wiser to conduct some deeper research before committing yourself to a fund. Here are some issues to consider:

The decision-makers: What qualifications do the Directors of the fund have? How closely are they involved in the day-to-day running and major investment decisions of the fund? Any managed fund that you invest in should be run by industry professionals accountants, brokers, people with backgrounds in banking and finance; if youre investing in a managed fund that invests heavily in property, the decision-making team should include someone with extensive experience in the real estate market.

Mortgage funds choosing properties and quality mortgages: Mortgages are very popular investments for managed funds. As mentioned above, any fund that invests in property should have ready access to advice from a real estate market professional.

Consider factors such as the diversification of the properties invested in (geographical diversification are the properties spread throughout a wide range of suburbs and price brackets? And sector diversification what property types are invested in, spread across residential, commercial, industrial etc); and what percentage of the value of the property the fund will lend (often 70% of the value for first mortgages, and up to 85% of the value of the property for second mortgages).

A good way to gauge the viability of a managed mortgage fund is to look at the number of loan write-offs; the number of bad debts incurred (mortgages that the fund has granted that have been defaulted on); and the amount of loans in arrears of principal and interest for over 30 days.

Also, every property that is invested in should be valued by a qualified valuer not a real estate market appraisal and, if possible (especially for smaller funds), every proposed property should be inspected by a qualified employee from your fund to double check that everything is as it should be good quality control can prevent mishaps.

Income options: Naturally, its your choice how long you wish to invest your money for. When choosing a fund look at factors such as early withdrawal penalties and payment options. Can you have access to the interest earned monthly? Quarterly? Annually? Or will you have to wait until the end of your fixed term period before earning any income from your investment? Choose whichever option suits you best. A high rate of return is useless if you envisage needing an income from your investment before the end of the proposed fixed term.

Environment: Economic trends and possible political changes are some other factors to keep a weather eye out for. If you invest heavily in a fund that in turn invests internationally, youll want to know where your money is going and whether the governments and economies in question are stable and likely to stay that way. Some financial advisors suggest that investing 15-20% of your capital overseas is a wise move, and it is as long as the country/countries in question have a good economic climate and arent in the throws of political upheavals.

So, now you have a few tips for finding yourself a managed fund that will help to grow your wealth. Once youve chosen a fund, or have decided on the sorts of investments that youd like to be involved with and youre looking for a fund, there are still some more things to consider before diving in.

This is the first instalment of a four-part series of articles to help you cut through some of the financial jargon without getting too much of a headache. The next three instalments will look at investment rates, retirement funds and self-managed superannuation. Hopefully theyll help put you on the right track to grow your wealth.

A final note: This article and the series of articles to come is not given as professional financial advice. Your personal circumstances have not been taken into account and financial situations vary the world over. You should seek professional financial advice and read the product disclosure statement for any financial product before making a decision.


Written by Sara Schell.

To read more about planning your financial future, visit


In Search of the Future: Google Vs. Microsoft

Since last year, the Google Phenomenon has been creeping steadily into all factions of society, from the broadsheet financial papers right down to the teenage magazine weeklies, making Larry Page and Sergey Brin household celebrities worth billions of dollars and determined to change the way everyone works, plays and interacts over the next decade. When even notoriously anti-American corporate French periodicals start declaring the rise of U.S. companies, you know somethings going on: only last week, Le Point featured both founders on the front cover and declared boldly inside: Lambition de Google parait navoir aucune limite (the ambition of Google seems to recognise no boundaries).

Suddenly everyone everywhere is talking about Google teaming up with Sun Microsystems, who has come obligingly out of left wing, to possibly create the most advanced new desktop software around, making a challenge to the Windows standard. And Google is laying the groundwork with numerous Beta test applications, taking on everything from academia (Google Scholar) to e-mail (Google Mail) down to internet chat and VOIP communications (Google Talk).

But how credible are these threats? Certainly the savvy invitation-only launch of applications such as GMail and Google Talk has elicited some favourable press, and the functionality and usability of its Beta launches has been extremely well received by both the public and by technical critics, but could this innovative relative newcomer really take on Microsoft? Many seem to think so.

While there is a lot to be said for the weighing up of the technological merits of both companies' capabilities, how about looking at it from a purely financial perspective? After all, as history has continually proven, a specification war is not only won on the technilogical superiority of a comapny's product but on its muscle in the fight. What most people seem to have forgotten in the midst of the Google hyperbole are the fundamentals behind the two companies. Google has a reputation for being very secretive, something that has been, again, well received, while Microsofts very public announcements appear to be going in one ear and out the other of most analysts. But is Google really that secretive? The company is touted almost weekly in one broadcast or another as changing the world or knowing no limits or never ceasing to adapt, and one has to posit, with this much excitement in circulation, does Google really have nothing at all to do with all this?

It would be nave to think not. Furthermore, a closer analysis of the companys share price since the IPO last year seems to give way to more suspicions about the apparent secrecy Google encloses around its HQ in Mountain View, California. The company is now trading at nearly four hundred dollars a share, or, in real value, at a P/E of 85! The last time this kind of valuation was seen anywhere near the NASDAQ was back in the heydays of the tech bubble. To believe that this kind of price performance in the current market climate is achievable without a heavily active PR department is somewhat risible.

The more extrovert Microsoft, by comparison, trades at only a fraction of this price, at a P/E ratio of just over 20. In addition to this, while Google is worth just over $100 billion dollars, Microsoft is worth $250 billion. This comparison alone makes Microsoft extremely good value and Google way overpriced by any measure, espcially with Microsoft's earnings up on the year to date.

It is easy to take cheap shots at Microsoft because of its gargantuan monopoly, and undoubtedly, it makes for great news when a young upstart takes top lead over a franchise of Microsofts size. But for all its evils, Microsoft has consistently delivered us into the world we now know and use: from the desktop to the application I use to write this article on, to the software that enables me to broadcast it out to a planet of six billion people, Microsoft has provided by far the bulk of the platform.

What is interesting however, despite the potential Microsoft-Google wars, is that all this publicity signals a demand from the world at large for some kind of change of the current software standardization. A lot of Microsofts success depends on whether its next foray into the market, Windows Vista, can provide a sufficient enough change to satisfy the demands of customers tired of filing by a limit of subject and surfing by a limit of criteria.

Because, contrary to public opinion, it looks like Google might have over-sold itself too early. A P/E ratio at its current level cannot be sustained for an indefinite period of time. The only way that Google can possibly sustain this kind of price to earnings valuation is to actually deliver a viable desktop software before Microsoft comes out with its challenge next year. If it doesnt, and the price of its shares starts to fall (as it surely will), Google is going to find itself having to split its current stock in order to attract more investors to its equity, a strategy that could lead it to decline further. Capital withdrawal from shareholders at the moment of a head-on confrontation with a monolith such as Microsoft can be disastrous to the outcome, particularly when Microsoft is sitting pretty right now at a relatively low industry valuation.

Microsoft has been a public company for long enough to know the tricks of the trade that rookie Google still has yet to acquire: Page and Brin should be careful where they tread.