Archive for Getting Rich

The Geek | June 10, 2008
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Learning to Trade Forex – A Simple Guide!

Learning to Trade Forex – A Simple Guide!
By Peter Burke

Don’t jump in the deep end by putting $1,000 down and then thinking you are going to double it within the year without doing much work! That doesn’t happen. The most likely outcome of such enthusiasm is usually burn out with the person losing the initial trading deposit.

As a start you should familiarize yourself with the terminology that traders use – for example what are ‘pips’? What is a margin trading account? What is technical analysis? What is a Trading Platform? These are basic elements that you should know plus many more things!!

Visit Forums

If you feel that forex is for you visit forex forums, ask questions, try and get a feel for the market and the temperament of traders. Try and sort out who the ‘real traders’ are from the ‘ego trippers’.

Open a Practice Account!

When you feel that you are starting to get at least a basic knowledge then look for a company (usually a brokerage company) that supplies a trading platform and a ‘practice account’.

If you haven’t traded before and you are a complete ‘newbie’ to this business (yes -treat it like a business) learn as much as you can by ‘doing’.

Once you have got to the practice trading scenario, try and ‘replicate’ what it feels like to both gain and lose money – put some money aside and add and take away appropriately according to your results on that day.

One of the first lessons you should be learning is never never over-stretch your finances.

Don’t over-margin your account!

When learning to trade forex you will need at some stage to start trading ‘for real’ on a margin account but don’t leverage $1,000 up to $100,000 your broker may cut your position to limit any exposure their company may have if your position goes against you – so only utilize 15-20 times at first – gain confidence and with confidence knowledge and skill expand your leverage.

To find out more about what it takes to be a profitable forex trader join my Free Weekly Newsletter which is filled with tips advice, guides and product reviews. Join Forex4Traders.com here.

Peter Burke MBA has been writing Journals and Articles for academic publications for over 7 years and is Managing Director of a Consulting Company in the United Kingdom.

Article Source: Peter Burke
Learning to Trade Forex—A-Simple-Guide

Category: Forex, Getting Rich | Tags: ,
The Geek | June 7, 2008
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An Introduction to Options and Futures Trading

An Introduction to Options and Futures Trading
By Larry Haywood

In the world of finances, futures and options are classed as “derivatives”. They are financial instruments whose prices are calculated by the price of another underlying asset or security. Generally, futures and options are used to guard against risk and for speculative roles. Whenever an investor from Europe purchases shares of an American company on the NYSE, for instance, he is exposed to some stock price fluctuations and currency exchange rate risks. To minimize his overall degree of risk, the investor can purchase currency options to make certain the exchange rate is fixed when he sells off the stock and converts the American dollars back into euros. We will now take a better look at how futures and options work.

Futures

A future is merely an agreement to purchase or sell an asset for a preset price at a specified date in the future. A future’s fundamental asset can be, amongst a lot of other things, an agricultural commodity, individual shares, stock market indices, bonds, and interest rates. A future contract will have fixed delivery dates, traded units, and other clearly defined terms and conditions.

For illustrative purposes, let’s imagine that you’ll “open” a futures position by either purchasing or trading an equity futures contract where the underlying asset are shares. Whenever you’re anticipating the price of the stock to go upwards in the near future, you will purchase a futures contract that will oblige you to receive a specified number of shares at a preset price on a certain date in the future. This is known as a long futures position. If, on the other hand, you’re anticipating the price of the stock to go downwards in the near future, you’ll sell a futures contract that will oblige you to deliver a specified number of shares at a preset price on a certain date in the future. This is known as a short futures position.

Like any other kind of investment, futures contracts carry a risk – that market prices may not go in the direction you thought they would. Nevertheless, they enable you to profit both in a rising and a descending market. When you invest in shares, you typically profit from purchasing low and selling high. But with a short futures position, you can still make money even if the stock price drops.

Options

An option gives its holder the right to purchase (call option) or sell (put option) an underlying asset at a planned price before or on a particular date in the future. But unlike a futures contract, the holder of an option is not obligated to take any action. If the holder decides not to exercise the option, all he stands to lose is the premium he gave for it.

Imagine you currently have a number of shares of a specified company’s stock and you plan on selling them in a month. If you anticipate the share price to drop in this one-month time period, you could purchase a put option that will give you the right to sell your shares at a preset price at any time within the next thirty days. Whenever your expectations turn out to be right, you’ll be able to sell your shares at a price that is more than the market value.

Options could be utilized as an insurance mechanism against future dips in the price of an underlying asset. The purchasing of options arrives with limited risk as the holder of the option only stands to lose the option premium if his anticipations of market movements do not happen. Additionally, they allow you to take part in market price movements without actually having to take on the underlying asset.

Hopefully, this brief article has served to shed some light on what futures and options are and how they function. The examples preceding were very simplified and were only meant to show the basic concepts of derivative trading. In reality, trading with derivatives is a good deal more complex and warrants additional reading. You need to be extremely acquainted with the different types of products to be successful and fruitful in your positions.

Larry Haywood is a stock market enthusiast, focusing on innovative and unique techniques for building up wealth via the stock market. For a limited time, you can claim the “Insider’s Guide To Forex Trading” e-book absolutely free at: http://www.mystockmarkettips.com/ebook-offer.htm

Article Source: Larry Haywood
An Introduction to Options and Futures Trading

Category: Getting Rich | Tags: , ,
The Geek | April 5, 2008
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Getting Rich Isn't Complicated

5 million dollarsI was looking around the internet today, trying to find ideas for blog posts, and I was struck my the number of sites telling me how to make money and get rich. It all seemed so complicated. I could invest money in the stock market or the currency markets, I could flip houses or websites, I could even click my way to riches. Some sites would only reveal their secrets if I bought an ebook or a membership to their site. Then there were those that claimed I could get rich by writing an e book, or starting a membership site.

The answer to how to get rich isn’t complicated at all. In fact, it is pretty boring. There are just a few simple steps, and I’ll share them with you right now, for free!

1. Spend less than you earn. Or earn more than you spend. It is common knowledge that people’s spending increases as their income increases. Making more money isn’t going to help you. Unless you have a plan to spend less than you earn you will spend everything you earn, and probably more.

2. Stay away from debt. If you are in debt, get out! I never said it was easy to get rich, I just said it was simple. The simplest way to get out of debt? Quit getting more debt. Pay at least the minimum payment on all your debts. Eventually you will be out of debt. (I didn’t say it was fast, just simple.)

3. Save and Invest Money. Now that you are spending less than you earn you will have money to save. Start with a high interest savings account. When you have a few thousand there, start looking at investing in index funds.

4. Max out your 401(k)plan at work. Don’t tell me you can’t afford it. Find a way to make it work. If your employer has matching you are a fool if you are not putting the max in your account.

There you go. 4 simple steps to getting rich. And once again, I didn’t say it was easy, I said it was simple.

Category: Getting Rich |
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