Friday, September 21, 2007

The Two Tools of Money

This post is focused on how money works in the economy. It directly relates to the policies that are used to control money directly influence the behavior of the real estate market, including the increase or decrease in home values. Having a basic knowledge of how money is supplied to the economy can help homeowners understand how economic-related hardships become more probably at certain times, and how best to take care of their personal finances in any economic cycle.

The mechanisms of money are controlled by two parties: the federal government and the Federal Reserve System. The government controls the supply of money through a process called "fiscal policy." The Federal Reserve Bank controls the supply of money through a process called "monetary policy." We will briefly discuss each of these policies, how they are enacted, and the eventual repercussions within the economy.

Fiscal policy is controlled by the federal government through the tax policy and government spending.

Through the use of taxes, the government can indirectly increase or decrease the supply of money that consumers and businesses have access to. When the government lowers taxes, everyone has more money to spend on other items, such as new homes, personal goods, or business equipment. If taxes are raised, the government collects more money from everyone, thereby decreasing the amount of money in the economy. This causes a general increase in prices due to the higher demand for fewer dollars.

In reality, this can be related to quite easily. If you receive a large tax refund every year, then you have more money to spend on items like TVs, computers, vacations, and food. If millions of people have extra money to spend on these items, then prices will increase to meet the rising demand. A small tax refund, or having to send the government a check due to higher taxes will cause you to spend less money on bills or consumer items. Prices will fall due to fewer people being able to afford items such as iPods or home additions.

In terms of the other method of influencing the economy, the amount of money the government spends can increase or decrease the supply of money in the economy. If the government increases federal spending to programs, then more money enters the economy. Alternately, if the government decreases its spending on federal programs, then less government money enters the economy.

In practice, this means that if the government spends extra on the federal forest fighting program, for instance, then more employees are hired and more firefighting equipment is purchased, which puts extra money into the economy. And if programs are cut or scaled back, employees are laid off and contracts are canceled for equipment, thereby decreasing the amount of money in the economy.

These are general explanations of the two main ways the government can influence prices of goods in the economy: through taxes and government spending. The effects of this fiscal policy techniques are felt indirectly by the economy as a whole and do not have the same level of impact as the monetary policy practiced by the Federal Reserve Bank.

The Federal Reserve Bank is the central bank of the US and sets the interest rates at which banks can borrow money from the federal government. The Fed, as it is commonly called, can control the supply of money in the economy directly by a number of different tactics.

The first way involves the Fed purchasing or selling government securities, such as Treasury Bills. If the Fed buys large numbers of these, then they exchange money for the securities, and more money is put into the economy when investors exchange their Treasury Bills for money. When the Fed sells these securities, then they are exchanging money from investors for the promise of money in the future, and this decreases the amount of money in the economy. Investors trade their dollars for Treasury Bills, and the Fed holds onto the dollars, preventing them from going back into the economy to be used for other purposes.

The Fed also controls the amount of money that banks have to deposit with the Federal Reserve Bank. When banks have to deposit a large amount with the Fed, then this money can not be used for additional loans for consumers or businesses. This can raise interest rates, because more parties are competing for less money. If the Fed lowers the deposit requirement (known as the reserve requirement), then banks can use more of their money to extend credit to customers, and this money finds its way into the economy. Interest rates for loans and mortgages will go down, as there is more supply of money to be loaned out.

A final way that the Federal Reserve can control money is by directly raising or lowering the interest rate at which banks borrow money from the Fed. When banks have short-term problems paying extending credit or paying on demand deposits (such as checking accounts), they can borrow money from the Federal Reserve directly to meet their needs. If the Fed raises interest rates, then banks are less willing to borrow money and do not lend as much money, or lend money at higher rates. As the Fed lowers its rates, then banks can also lower their rates or extend extra credit, as their cost of borrowing decreases.

The Fed directly influences the economy by controlling the total supply of money by creating or destroying money and determining the rate at which consumers can borrow money.

Homeowners are the group most directly affected by these changes in the money supply. If home values decrease as a result of higher interest rates, or a recession in the economy, then homeowners in foreclosure may find that they owe more on their homes than the current value. They will have a hard time selling their homes to stop foreclosure, and may not be able to refinance at all.

Thankfully, the economy operates in cycles of increasing and decreasing values, with a general optimistic trend. This means that prices, even if they decrease, can generally be expected to increase to their original price in the near future and will almost always increase beyond their original price in the long term. Of course, this is only small consolation for foreclosure victims who would benefit from higher home values in the short term.

Hopefully, this post explains clearly how the supply and cost of money in the economy, with a focus on home values, is affected by changes in governmental policy and operational policy of the Federal Reserve System. It is meant to give homeowners a bit of information regarding the broader economic context of their fight to stop foreclosure. It is not meant to provide an exhaustive explanation of how our economy works, but merely to be a meaningful introduction.

Knowing that the economy operates in cycles that are affected by these two entities can help homeowners realize that a foreclosure season in the economy is just like any other season: it comes periodically, may have extreme conditions, but will eventually pass into a different phase leaving only memories.

The website provides free foreclosure help to consumers who are falling behind on their debts. With virtually hundreds of pages of information, homeowners can find the resources they need to prevent from losing their homes to foreclosure, and can begin the process of recovering financially. Visit the website today and learn how to avoid foreclosure:

How You Can Earn More From Auction

MAKE IT AT THE AUCTION All successful businesses are based on the simple principle - buy something cheap - then sell it at a mark up. Simple, in theory - but rarely simple in practice. One of the major entrepreneurs 'headaches' can be where to get goods to sell at a cheap enough price to allow a large enough profit. Fortunately, there is a way that problem can be solved - easily. Quite simply, auctions offer you the chance to buy all sorts of goods at under market value. It's then a simple matter to resell them, perhaps immediately, at in excess of market value. A clear, quick profit!

Auction buying is not just an aid to those already in business. There are many cases of people who do nothing but buy 'anything' at auction and resell for a profit. Just consider, it only needs a few items bought or sold a week with a few hundred pounds mark up on each to build a considerable income. You can be an auction entrepreneur in just part time hours. Of course, auctions are still shrouded in some mystery. That's what helps to keep the undetermined away from the profits. But, they are generally simpler to follow than they were. With a few visits you can be quite experienced at 'snapping up' bargains at auction and reselling for an immediate gain. Really, it matters not what you buy. Just consider an auction as a place where you can get things for a lot less than they are worth. That's nothing short of an instant money making opportunity! Valuable items can be bought for pence in 'job lots'.

Sometimes changes to pick up antiques.- Stock. Bankrupt trade stock, discounted lines, etc. are frequently sold off by auction. There are good opportunities here to buy up lines and then offer to traders or sell via market stalls etc. Tools/Plant. Items from the trade are frequently sold off by auction. This may include new and used items which can be bought up and then sold back to the trade. Do check items offered as, with many other auctionites, it may be up to the bidder to check whether they are working or not. - Farm Stock. Another popular auction line.But it is probably not suitable unless you have some experience in this area. - Property. A real potential winner with huge discounts available on property of all types. Do take legal advice, and advice from a survey or/ valuer though. - Art and Antiques. Offers profits to beat them all. Needs a little study of the business - but there are smaller markets you can try and succeed in. Not all auctions sell 'old masters' for millionaires only. Always remember of course that auctions do not always fall neatly into categories. Some may be a combination of several types - or completely new auction lines. Just keep your eye out for any auction - because it's almost always a chance to enjoy huge price cuts! There are directories available listing auctions and auctioneers. But, the cheapest way of finding them is to look in the Yellow Pages at your local library.

Check the index to see what different categories 'auctions' might fall into.It is wise to visit auctions before you even consider buying. Because, although they offer the same service they do work on different principles. Check, by observation, that the auction is fair. Auctions are, of course, working to get highest prices for sellers - but they should not be biased. Good auctions should display goods prior to the sale for inspection. And, they should issue a catalogue or list of what is on offer. The buyer accommodation should offer a clear view of the auctioneer during bidding. More importantly, the rules of the particular event should be displayed on site - and followed by staff at all times. Do ensure the auction you attend is fair to all buyers, and not favoring the 'regulars'. Also that the price is not artificially inflated by the auctioneer - it should be the demand that sets the price. Most auctions are honorable organizations, but there could be exceptions! Do stay behind after an auction has finished. This gives a chance to see if those who have bought are pleased with their purchases - or if any 'little disputes' arise.

A good guide to finding the best, most honest and most profitable auctions. Successful Buying at Auctions When you have gained a little experience at auction you can venture to make your first deal. And, there's no reason why it should not be very profitable. Do remember that most auctions demand cash on sale. So, take an appropriate amount with you. If this is risky ask for a bankers draft at your bank. This is really a cheque that cannot be stopped and most auctions will take them. At auction, goods are sold in lots. So, you will need to decide which interests you. It is a good idea to select 'substitutes' in case your choices are bought by someone else. To start bidding, the auctioneer will normally set a price. This could be far too high - or far too low. So, wait until a few bids have followed. You can then decide whether the price will allow you sufficient sale margin and start your own bidding. Each bid may rise in 1, 10, 100 or larger units. So you have to keep a check on the total carefully.

There is a good deal of showmanship involved in auctioneering and you'll certainly need all your wits about you. Perhaps the main aim is to ensure you only buy at good low prices. Fall out of bidding if the price is getting too high. Although experienced bidders may make strange signals to the auctioneer there is nothing wrong with making your bid quite clear. You can pick up the 'tricks' that others use in the future. When the bidding slows and the appropriate sum is reached the auctioneer will proclaim the classic 'going, going, gone'! When the hammer falls the item is sold at the final price. Most auctions will demand a cash deposit at the fall of the hammer. The only exception being if they require all bidders to register and lodge a deposit before the auction. The balance must be paid and your purchase removed within a certain time limit. Note that auctions operate on a 'sold as seen' basis and rarely give refunds. Only a few give a guarantee against faulty goods. So, bid enthusiastically, but with care taking professional guidance as appropriate. For best results you should arrange to process and resell your purchase immediately. Don't sell at auction though - the profits won't be enough. Best profits are perhaps to be found through newspaper advertisements. Then - when you've cashed your purchase in and made your profit why not reinvest the proceeds in an even bigger auction deal? Some possibilities Following you will find a list of the proven opportunities auctions offer: - Cars.

One of the biggest auction money makers; huge discounts. But, do buy carefully as you have little protection against faulty cars, although most auctions have warranties against stolen cars. Follow all vehicle regulations - a car dealing license may be needed in some areas. - Household effects. Ideal place to start in auctions, buying up household items. The great thing about auction trading is that you can actually prove the potential to yourself before actually spending anything. Just go along to a few local auctions.Auctions are mainly a quick way of selling goods for vendors. And, they are also a way of selling things where any other techniques e.g. press advertising would be difficult. Because of this the prices are invariably far less than market price. Auctions are rarely an attempt to get more for an item than it is really worth, despite appearances to the contrary. But, of course, you would always guard against being over charged. Discounts at auction vary according to the type of goods sold, type of auction, type and number of crowd - even things like the weather. In some cases auction discounts have been quantified at as much as 80%! Rarely would the saving fall below 10% - but a reasonable ready accessible saving would be 20-30%.

Quite simply, the auction potential means you might buy an item (say a car) at 1,000 one day. Then, the next day sell it for at least 1,200 to 1,300. That's a onsiderable, instant profit for hardly any work; a way of making very quick extra cash.

Auctions are held the length and breadth of the country almost every day of the week.So, there will always be a chance to make money. It's not always obvious which are the best to attend though, and this will need some market research on your part. Auction Success Auctions are a unique opportunity in a way. Because, unlike other ventures you can't guarantee a certain trade week in and week out. Remember though, this means your income is limited by virtually nothing! It does not matter how little you know about auctions - or what you buy. Simply consider them as a way of getting attractive merchandise at very low prices indeed. A source only open to the most enterprising of people. 'Buy cheap, sell dear' is a principle that means nothing less than complete success. Exploit that principle and let auctions make money for you.

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Trading Baskets Part I

Q. What is a basket?

A basket is a group of up to 50 stocks that you can trade, manage and track as one entity.

In another article, I wrote about a rather conservative method of being in the stock market. See: "A Triple Dipper: How to Make 3 Profits on 1 Stock" at

This time lets talk a little about trading "baskets". The definition above maybe needs to be expanded just a bit. You can trade baskets using longer term buy and hold strategies, a shorter-term swing trading approach or as a day trader. A basket of stocks is nothing more then any group of stocks that someone has grouped together for any of a number of reasons. They may be of the same sector, or they may be made up of a number of stocks in different sectors.

An example of a few baskets could look like what is sited below. To save time and space Ill use the stock symbols only. You can look them up later if you are interested. Lets say you see stem cell research as the thing of the future and wanted to be invested in it. If you dont know which stock is going to fair the best, you may want buy a basket of stocks that is made up of ASTM GERN and STEM. This would be a basket of stem cell stocks. Now lets say you think the Internet stocks look good and, again, you are not sure which ones will do the best. In your Internet basket you may want to pick up some shares of EBAY, YHOO and AMZN. Obviously your basket can contain any number of stocks you want. Many online brokers will actually allow you to set up baskets in your account, and you can put in a sell order all at once on the entire basket or pick and chose which ones you want to sell. Im not recommending these stocks in any way, shape or form, but merely using them as examples.

Okay, thats pretty basic, but Im sure you get the picture. The examples above would more or less be the type of baskets you would probably be thinking of holding for some time and not day trading.

Most day traders have an entirely different kind of basket of stocks. A day trader may have any number of stocks in his trading basket that he or she has been become very familiar with. They have studied them and even charted them for intraday movement (I hope) for some time and have learned the trading habits of the individual stocks. They have a fairly good idea of how the stock moves on a daily basis with or without news. They have knowledge of how it reacts to earnings, analyst upgrades, analyst downgrades and other events that may be reoccurring. They have also probably learned how they trade when hit by surprise events as well. They know which market makers to watch the closest. They also know who the main market maker in the stock is, often referred to as the axe.

A day traders basket may be any number of stocks. A good average could be somewhere between 25-50 stocks. But it may also be larger or smaller. I have known traders that traded one stock all day long and nothing else. I have known others that were able to watch 300 stocks. Personally, I think that is way too many.

When I was trading I had a basket of about 75 stocks. Some I knew were only going to be in play on news or when reporting earnings. Others were fairly reliable moves on a daily basis. And still others were extremely sensitive to any sort of news or event.

Today, if I was going to put together a basket of stocks, I would be looking at the following symbols: GOOG, TASR, TZOO, AIRT, QLGC, SYMC, PLMO, KMRT, EBAY, SINA, RIMM, RMBS, PCLN, and DCLK as well as other NASDAQ stocks. I would not over look New York Stock Exchange stocks, although many do. I would be looking at: MO, PFE, CAT, GE, GM, TYC, MRK, MOT, and others as well. Keep in mind, I am not recommending any of these stocks specifically for you to buy or trade. I am merely trying to give you an example of what a basket may look like. You have to decide yourself what stocks you would add to you your basket based on your own knowledge gained through experience and research on each stock.

I think every trader should have a basket of stocks he or she follows and trades. Day trading without your own basket raises the risk level and puts you in a position where you are always looking for something to trade. On slow days where the market is just not offering up much in the way of trading opportunities, you may have a tendency to jump on stocks, that under different circumstances, you would have passed on. Having your own basket of stocks will lower your exposure to risk. They may not move any better under slow market conditions, but at least you will have some knowledge of how they move. In Part II I will tell you about a special trading basket technique I used during the early boom days of day trading. It may still be a valid concept today.

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Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late1990's both as a trader and as the moderator of one of the Internet's largest real time trading rooms. He is the owner of , Strictly Business Magazine at and

Outlook and Strategy of Indian Stock Exchange Market 2006-2007

Indian Stock Market occupied a top slot in 2006, together with an unexpected fluctuation with sudden rise and fall, but maintained the sensex mark. In 2006, the Bombay Stock Exchange crossed the 10,000 level mark. There were speculations amongst the bulls at the Dalal Street (Mumbai) that sensex might cross 14,000 marks, but unfortunately the year 2006 ended with the average 12,500 level. Fundamentally strong, the economy was the main key but raising inflation rate and high crude oil prices applied brakes on its acceleration.

The Indian stock market raised to dizzy heights in a span of 194 days, from October 28, 2005 to May 10, 2006, with the BSE sensex rising from 7686 points to 12612 points, a gain of 4962 points. It then fell very fast to a level of 8929 points on June 14, 2006, registering a loss of 3683 points in 35 days. It has again reached a level of 12010 on September15, 2006, again of 3086 points in a span of 93 days and presently the market is trading in the region of 13250.Like April 2006, some felt that when the market rose high, that time has come for a correction and the market was totally overheated. Investors were of the view that when the market started falling and a negative sign was taking up, it could reach up to 9000 level, but the sensex has bounced back and reached 12321 points on last September 27,2006.

There are concerns over tight global liquidity and deteriorating trade balance. These may not check Indias strong economic growth. As India is getting younger and younger, its productivity is bound to rise. Investment in Indian market must be seen in a marginally different context. As much as 60 percent of the GDP is led by domestic consumption whereas other emerging countries are dependent on foreign market. For the next few months ending the financial year 2007,sectors like FMCG,pharma,retail,media and textiles looks attractive in terms of valuation.Basically,India ,a service driven growth story, has enough to offer since we are in the middle of a capital expenditure boom and rapidly expanding outsourcing.

Indias growth will be sustained and may reach greater levels if the government act on reforms front.Infrastructure, ports, roads, SEZ etc requires more attention and investment. Investment in 2007 will be the brighter period for any investor. Going by the fundamentals, most experts believe that for the next 6 to 8 months there is very limited downside risk at the current level. As per the Morgan Stanleys report, technically speaking, this quarterly period (June2007), the Sensex would reach the point 14700.Also in the near future, the Indian stock market will see foreign companies raising funds through Indian Depository Receipts (IDR).But at the same time we can see that the Indian capital Market is characterized by its high degree of volatility which has been instrumental in both creating and destroying the wealth of many investors.

Fundamental VS Technical Analysis

There are two main ways of picking stocks (or any kind of investment).

Fundamental analysis is concerned with looking at the economic fundamentals affecting the particuar stock (etc) and covers everything from the economy it operates in (interest rates, unemployment, exchange rates etc), through sector prospects (is the sector growing or declining, the competition etc) down to the particular stocks accounts, and management team.

On the surface it seems fundamental analysis provides a reasoned and rational basis for investment decisions. The problem is that the information youve based your analysis on (plus that you missed) is also available to everyone else - including the smartest pro traders and analysts, their super dooper computer models, and the inevitable snippets theyll discover that you wont. Result, by the time youve done your fundamental analysis your findings (plus the stuff you didnt take account of) is already reflected in the price.

Technical analysis is concerned with (dont laugh) trying to guess future price movements by looking at historic price charts. In theory this would seem about as useful as trying to guess price moves from studying tea leaves. Technical Analysis is dismissed as useless by academic, author, and succesful investor Burton Malkiel (A Random Walk Down Wall Street). And yet the fact that technical analysis is still widely used might just make it a proverbial self-fulfilling prophecy; ie a technical buy signal occurs, lots of people buy, the price goes up Though I suspect such a thing - if it exists - works only in the very short term.

Ultimately, the safest bet is simply to buy an index via a low-cost tracker fund, and thats where your core investments should be. Either in a managed fund, or (if you can afford it) in a broad spectrum of diversified stocks.

But if you want a bit of fun, with non-critical money, do your fundamental analysis, do your technical analysis, but leave the final choice to that little voice within - your intuition.

Johnny Finnis is editor of, a simple and unbiased introduction to finance and investment for ordinary people to make the most of their money. Have your say on our blog

Investors Taking the Path to Self Destruction, Happily Line up for the Great Financial Slaughter!

The International liquidity crisis will soon create a mess too big for anyone to easily recover from.

When our Strategic Oil Reserve System wants more oil we merely grind up some trees and rags to make paper to print lots of greenbacks, so we can trade a ton of them to the Arabs for a tanker full of oil! Surely someone gets burned in that deal - no wonder they hate us!

Both oil and gold are traded in the US dollar, so everyone needs to keep some on hand but gold and oil are essentially available "free" to us, so long as we have green ink to print with. The problem is that all Countries have now caught on to our "Ponsi like scheme" so everyone is burning their neighbor by printing fresh cash as more goods are needed!

Cash has become such a free commodity that investors are willing to accept stupidly low return rates for very risky paper assets, as if in a self destruct mode!

China is clearly in a bubble. Shanghai stocks are up 250% since 2005 - and 35% this year alone. Still, investors are so eager to get in at these prices that they take up Chinese bank IPOs at twice the PE ratios of banks in developed countries. And what do they actually get when they buy a share? No one knows what a bank chartered and regulated by communists is actually worth!

China is expected to accumulate more than half a trillion dollars in foreign exchange reserves - twice as much as last year. How does it get that money? It prints up currency of its own to buy the foreign currency from businessmen and investors - who are selling Chinese made goods (including stock certificates) to foreigners at a breakneck pace.

Investors not only take up but scramble to buy Hugo Chavez's paper Venezuelan bonds! They do so at less than 7% yieldbarely 200 basis points more than the sovereign debt of the United States of America.

Officially, the Venezuelan Bolivar is quoted at 2,150 to the dollar. On the black market it trades for 3,750 to one. And it's sinking fast - down 15% so far this year, so where is their justification?

Even long-dated dollar-denominated bonds issued by Iraq, trade at less than 10% yield.

From its recent high of 83.10 on April 9th, the US Dollar Index has fallen to 81.53, a 1.9% decline. That may not sound like much, but it works out to a 32.7% decline on an annualized basis. Given that one presently earns only about 5% per annum in interest income on their dollars, the loss in purchasing power is very obvious. You thus need to find assets that will rise at a 32% annual rate to keep up with the dollars rate of fall!

If our interest rates drop by 1/3 we would be OK but then who would finance our National Debt when Hugo pays so much more! The whole International financial mess must fall like dominos some time very soon, as all other Nations in the past financed with fiat money have failed, without exception!

Fred Peschel is a graduate Mechanical Engineer with 40 years experience in custom electronic design and manufacture in the high voltage test equipment area. Upon retirement he started studying self healing and in the last 10 years has become a world class expert on colloidal silver manufacture and applications. His is the only manufacturer of commercial ionic colloidal silver generators, with extensive installations world wide. He is an avid student of finance and medicine.

Dr. iPhonestein

It's alive! It's alive! You can almost hear CEO Steve Jobs screaming from the back of a dimly lit laboratory at Apple HQ. While his masterpiece has been created and is in its infantile stages, he, much like Dr. Frankenstein, may have created a monster.

Let me rephrase that, his PR and advertising people may have created a monster. By becoming the most highly anticipated gadget this side of the Milky Way, any minor flaw or hiccup experienced by first gen iPhone users is sure to cause more than a little indigestion with the folks whove shelled out part of their pension to purchase the handheld and switch service providers.

Most doubters of the iPhone are immediately recanted by some Apple fan who points to the iPod as an indicator of the iPhones assured success faster than you can say Newton, the common iPhone doubters comeback. However, both of these arguments take a backseat to another quick phrase: first generation. Although the iPod may be more popular than Luke Perry in the early 90s, we mustnt forget that it was, at best, a cast member on the Surreal Life before it was introduced to Windows and had its kinks worked out in subsequent generations.

Where the kinks in the first gen iPod and the potential kinks in the first gen iPhone differ is the fact that there were essentially no expectations for the original iPod. As far as we knew, it was another attempt to make a decent mp3 player by a computer company who had lost its luster over the years, and little more. The iPhone, on the other hand, has become somewhat of a cultural phenomenon. As you read this very article, there is no doubt a group of techies gathering food and supplies to stock their tent for the next three and a half days outside in the heat in front of an Apple store.

You can imagine the joy they will feel when they get their cellophane wrapped cardboard box filled with the relic they have been lusting over for the past six months. Unfortunately for Apple, you can also see the disappointment on their faces when any minor element of the device fails to meet expectations or has a glitch; and for someone who has been psyching themselves up for such a moment for several months, there is at least one element that is bound to disappoint.

It is quite possible, some might say probable, that Apple will come out with a very good phone. But very good, quite frankly, isnt good enough. Apple has put its baby up on a pedestal that cannot afford just good reviews. In the words of Wayne Campbell (of Waynes World and SNL fame) what the iPhone must do is Something extraordinary. Something big. Something mega. Something copious. Something capacious. Something cajunga! for it to meet the expectations of millions of Americans who have already expressed interest in adding it to their mobile repertoire.

With reviewers salivating at the chance to take their jeers and cheers at the second-coming of mobile devices, we will most likely find out by Friday evening whether the iPhone is a hit, or whether it will be replacing Screech as the bad boy in the next season of Celebrity Fit Club.

Jordan Corning is a mobile enterprise solutions enthusiast. An analyst with Minneapolis based consulting firm ITR Group, Jordan enjoys exploring new ways in which mobile technology can offer significant contributions to the business, educational, and consumer worlds. For more info, visit the ITR Group website @ or visit his blog @

Forex Trading - The Perfect Market

The forex market is considered to be one of the most highly profitable markets for one great reason you are able to create superior technical analysis, which will therefore always increase your chances of making successful trades.

The Currency Cycle

One of the reason, we are able to make superior analysis in the forex market is due to the fact we are trading in a circular market. One of the trends associated with the currency market is that it generally correlates with economic cycles. These cycles usually repeat themselves often, which allows the average investor to extrapolate data more accurately.

Once a trend is determined in a particular currency, we can then make predictions on whether or not the price is going to go up or down in the overall scheme of things. There is nothing more important in forex trading than discovering a trend that seems to repeat itself on a regular basis. This allows for any trader to make the investments with a high chance of obtaining successful trade after successful trade.

How Does Forex Compare To Other Trading Options

When considering the ability of the forex market to reveal certain repetitive trends, there is no question as to whether this market is the most profitable. When trading in the stock market for example, an investor is required to make predictions as when the price of a certain company will change. Predictions can be hard to make in such a random market, as it relies on the ability of a company to rise and fall. This usually makes it very difficult to acquire trends that repeat themselves time and again.

Top Technical Analysis

When it comes to fundamental analysis in the trading sector the accuracy of analysis is directly determined by a market level of normality. Basically all this means is the amount of skews that exist along the price line, the lesser the easier it is to make analysis.

The forex market is by far the most normal of all markets to trade in. Future markets are a good example of a skewed market, which can be seen by less than normal distribution and where accurate analysis is almost impossible to determine.

The one thing that is common amongst all methods of trading is that technical analysis is the MOST important thing to consider. The better you become at extracting relevant data, followed by determining future results, the more successful you are going to become as a trading investor.

If you want to learn more about forex trading or anything else about the forex market then is the place to go for all the best FREE information!