An Introduction To Breakout Trading

Breakouts are one of the easiest technical patterns to spot. They occur in all instruments and in all time frames, so it doesn't matter if you're swing trading a currency, or day trading a futures contract, breakouts are a pattern you can trade.

What Is A Breakout?

Before we look at trading breakouts in more detail, we should first answer the question, what is a breakout? To understand breakouts, first it's necessary to understand support and resistance - the basis of all technical analysis.

Put simply, support is the point at which enough buyers come into a market to arrest a drop in price. Conversely, resistance is the point at which enough sellers enter a market that the price stops rising.

If buyers enter a market at a certain price, stopping the fall, and the price rises then subsequently falls, the price will once again reach the point of previous support. At this moment, the support is said to be being 'tested'. If the buyers re-enter the market at (or close to) the same price as before, thus pushing the price back up again, we can say that support has held. The support price point now has more strength than before, because it has been tested twice.

If the price bounces from the support point repeatedly, that support becomes stronger and stronger. In a sort of 'self fulfilling prophecy', new buyers will often come into the market near previous support in the hope that the price will once again bounce and rise, thus making the support hold again.

Eventually however, the support will fail and the price will drop through. This is a breakout - so-called because the price has broken out of the range in which it was trapped, between support and resistance.

When a breakout occurs, it will often do so with such force that the price will carry on dropping (or rising, it the breakout was to the upside - that is a break of resistance). To understand why, consider all those buyers who were buying at the support line. Eventually there are not enough of them left to prop up the price, and so it falls below support (in other words, it breaks out). Some buyers who had bought at that price point will immediately cut their losses and sell. This pushes the price down further. As the price drops, more and more buyers who had purchased at support will hit their stops, triggering yet more selling.

This vicious circle of selling causes 'momentum' and the price spirals downwards.

After all, if we sold when the price broke-out to the downside, or bought when it broke-out to the upside, we could just sit back and enjoy the ride, right? Well, not quite...

False Breakouts (Fakeouts)

Not all breakouts follow through. Sometimes the price will dip below support (or pop through resistance) only to turn around and go back within the previous trading range. This is more prone to happening with certain instruments where market makers or big players can control price to a certain degree.

For example, let's imagine a market maker wanting to buy a large quantity of stock. Naturally, he wants to get it at the best price he can. The stock is currently trading within a range. The market maker already has a chunk of stock, and he sells this off, his relatively large selling forcing the price through the support level. As the price of the stock drops, a number of short-sellers enter the market, selling on the breakout expecting momentum to carry the price further down. The market maker starts buying up all this stock that the shorts are selling, getting it for a bargain price. As the sellers run dry, the price is forced back up, and as it does so, the short sellers stops start getting hit and they are forced to cover their positions by buying back stock. All this buying activity pushes the price even higher!

When a breakout is manipulated in this way, it is usually referred to as a 'fakeout'.

Safe Breakout Trading

So if a trader can't be sure if a breakout is going to follow through or not, should they even attempt to trade them? How can we take advantage of this seemingly simple, but deceptively devious, trading pattern?

One way is to carefully choose the instrument we trade. Forex for example, is less prone to fakeouts because the market is so huge that it is almost impossible for any individual or institution to manipulate false breakouts.

Another way is to use advanced trading tools like Level 2, which gives complete market transparency and therefore lets the trader see what's really driving price.

But perhaps the most effective way is simply to become a student of 'momentum', or tape reading. If you can learn to read the tape (the Time & Sales screen, which reports trades in real time), you can quickly learn to spot true momentum and real breakouts.

Conclusion

Breakout trading is a relatively high probability low risk way to trade. As with any trading pattern, breakouts will work some of the time, and will fail other times. With practice, and by learning to read momentum, a skilled trader can quickly learn to spot the best breakout opportunities.

Harvey Walsh is a full time day trader and part time trading coach. He has helped students from around the world to break free from the day job and start a successful and profitable career, day trading from their own homes. You can find out more about Harvey, and learn some of his most profitable trading strategies, at his website http://www.daytradingfreedom.com

Aintree Day Two Preview

A little short on time today, so I'll keep this brief (I can hear your collective sigh of relief from here!)...

Yesterday - Mighty Man won the first as expected, but I didn't back it. I lost money on State Of Play, as Exotic Dancer proved himself a very very good horse in the Betfair Bowl.

Katchit won as he pleased, and I did back him but only for small money. By the way, did I mention I love this horse?

Just one point of order here: what the Dickens are the BBC doing employing the abject buffoon who is Jim McGrath to do the commentary?! Not only did he call the foot perfect Katchit as making a bad blunder (then followed it up by saying he jumped the next much better) when it was blatantly apparent to anyone with even one partially functioning eyeball that it was Punjabi who made the 'horlicks'; he also couldn't track a faller down for over a fence and, when he did, it was clearly a guess as he said Locksmith fell, then called him as the leader in the final quarter mile.

Finally, and this must surely have not been lost on the powers that be, in their first rehearsal for the Grand National, they were using four commentators (as they will be on Saturday). McGrath came a distant fourth - tailed off - to this listener's ear anyway, when pitched alongside the estimable race reading talents of Tony O'Hehir, my mate Ian 'Barty' Bartlett and another chap whose name escapes me, but who is a fine up and comer who often calls at Wolverhampton.

McGrath is an ignoramus. I never want to hear of a horse 'careering away' again in my life! (but I suspect I will have heard it twice more before the second race is over...)

Onwards, dear reader... I got the Hunter Chase wrong, and am still waiting to see where mine finish. Scots Grey looked beaten and rallied very well: a real treat if you backed it because you must have thought you'd lost your money, only to see him come back with admirable resolve.

The money for Bambi De L'Orme in the antipenultimate (that's third last to you and me) was well placed, and he won nicely. None of my cash was on him.

Had a decent bet on Wins Now in the sixth race and reckon he would have won but for a terrible mistake at the last hurdle. McCoy is not really a man for the Festival meetings it seems. At least not when I back him... TTS had the winner in Tidal Bay, and of course my bet on the Bay was left second at Cheltenham. Bugger.

In the last TTS had three non-qualifiers, due to the prices. Pity, because Two Miles West won at 25/1 and Gods Token was second at 33/1. The exacta paid a piffling 3170.20! (Place lay of the day Laouen beaten into 5th, so lay landed - just!)

To today, and hopefully none of you are triskaidekaphobic (afraid of the number 13 of course!)... No time for (further) verbiage, so my placepot / win selections are as follows:

Race 1: Ungaro and Dom D'Orgeval
Race 2: Massini's Maguire (a very tough horse to pass!)
Race 3: Well Chief (different class, barring jumping errors... no money down this time though!)
Race 4: Ground Ball, Umbrella Man, Risk Accessor, Hakim, and Le Volfoni
Race 5: Osana (tipped here as an Aintree horse before Cheltenham)
Race 6: Limerick Boy, Green Belt Flyer and Fundamentalist (place lay of the day: Copsale Lad.)
Race 7: One Gulp

Good luck if you're playing today...

Matt

Matt Bisogno is a lifelong horseracing and betting enthusiast, and has published a number of statistical analysis of trainer patterns for horse racing betting purposes.

Should You Trade The Forex Market Or The Futures Exchange?

Back in the nineteenth century farmers started selling contracts to deliver their produce at a fixed price at some specified future date in an effort to stabilize the supply and demand of agricultural products out of season. At this point the futures market was effectively born.

Today the futures market extends far beyond agricultural products and includes many different items from manufactured goods to currencies and treasury bonds, but the principal remains the same. One essential difference however lies in the fact that for many futures traders there is no intention to actually purchase the goods in question or to take delivery and it is the futures contract itself that is the trading instrument.

As an example of how futures trading works let's assume that a baker enters into a contract with a farmer to supply 100 tons of wheat at $50 a ton on a specified date. This contract need not necessarily require the baker to purchase the wheat specified in the contract but gives him the option to do so if he so chooses. Now, Futures accounts are settled at the end of each trading day and so, if after entering into the contract, the market price of wheat on a particular day is $40 a ton the farmer's trading account will be credited with $1000 ($50 - $40 X 100) and the baker's account will be credited with the same amount.

Final settlement of the account and delivery of the wheat will then take place on the agreed date and, for the sake of argument, we'll assume that the price of wheat is still $40 a ton at this point. The farmer will now have $1000 in his trading account and the baker will need to pay his account the $1000 that it is down. So how did both parties do?

The baker has lost $1000 on his futures contract but is able to buy wheat on the open market now at just $40 a ton rather than the $50 he anticipated and so his loss on the contracted is balanced by his ability to buy cheaply on the open market. In effect he has protected himself against having to pay more than $50 a ton but has in essence lost because the market price has fallen.

The farmer on the other hand has made $1000 on his futures contract but, because the market has fallen, he can now only sell his wheat for $40 a ton. Once again the difference between the two is balanced and, by entering into the contract he has effectively gained the $1000 he would otherwise have lost on the open market.

In many cases speculators will enter the market and will buy and sell futures contracts. For example, if they expect prices to rise they will purchase the contract from the buyer (known as buying long) and, if they expect the price to fall, they will purchase the contract from the seller (known as buying short).

The Forex, or foreign exchange, market is similar in many ways to the futures market but has several important advantages.

The Forex is the largest financial market in the world and is a giant when set alongside the futures market. This makes the Forex market very much more "liquid" and provided many more trading opportunities for both buyers and seller.

The Forex market is also open 24 hours a day, 5 days a week, while most futures exchanges are open for only 7 hours a day on Monday to Friday.

Forex transactions are commission-free, while brokers will charge both commission and brokerage fees on futures contracts.

Forex transactions are executed almost immediately because of the high volume of trading and there is usually little difference between a quoted price and that actually paid on the transaction. In futures trading quoted prices will often reflect the last price paid on a similar trade and there can be a marked difference between the quoted price and the actual price paid.

Finally, the Forex market has a number of in-built safeguards which mean that trading on the Forex carries less risk than trading on the futures exchange.

If you wish to learn forex trading online and discover more about this exciting world which can bring real time forex news to your computer screen, then please visit ForexOnlineTradingSystem.info

Learn FOREX Trading in 6 Simple Steps

This article is for anyone who wants to learn FOREX trading with the view to making big profits.

Its a well-known fact that anyone can learn FOREX trading - but very few traders make big profits.

Here we are going to show you how to learn the basics and apply them with the right mindset to succeed.

The Six Steps:

1. Attitude

Firstly, its a well-known fact that the traders who make the money, approach FOREX trading with the attitude they will do what it takes to succeed. This means they dont listen to gurus or read tip sheets - they do it for themselves.

Too many novice traders think they can follow someone else and be successful - but the only person who can give you success is you!

2. Method

If you are going to trade FOREX, you need a method - and this does not involve day trading - it involves long term trend following. The big currency trends last for months or years - and your aim is to lock into these currency trends, and make big profits.

The best way to catch these long-term trends is to use a breakout method - this is a PROVEN way to make money, and breakout methods form the basis of many top-trading systems.

Good software is available form such vendors as Omni trader, Trade station, and Supercharts any of these programs will allow you to test a method, and then when youre confident, trade it.

3. Discipline

By developing a method you are confident in, means that you will be apply to apply it to the markets - and stick with it, even through loosing periods.

Most traders who follow gurus and tip sheets cant do this and as they havent developed a method themselves, they soon throw in the towel and discipline goes out the window.

4. Knowledge

You can learn a breakout method very quickly - but you still need to overcome the psychological pitfalls of trading. Read some books that focus on this area - some of the best include:

Jack Schwagers Market Wizards and New Market Wizards

Edwin Le Feurves Remisenences of a Stock Operator

Also, any books by: Jake Bernstein and Larry Williams.

These books are motivational, and will keep you focused on the your task.

Trading is all about applying a trading system with discipline - and these books will help you achieve this.

5. Taking a Risk

When learning FOREX trading, most traders try and restrict risk above all else. However, they do it to such a degree, that they end up taking losses as they get stopped out the market. In many instances, the direction they chose was right but they just didnt give the trade enough room on the downside.

If you want to make big money by FOREX trading, keep in mind that with risk goes reward.

Taking calculated risks is quite different from being rash - you simply need to wait for the right opportunity, and have the courage of your conviction.

6. Trade in Isolation

Trade in isolation to stay focused - keep in mind that if you are subject to the opinions and views of others, which may differ from your own - it will put you off.

The fact that you may be doing trades no one else may agree with, is good - Why? Simply, because 90% of traders lose - so the mass opinion is not the one to follow.

Learn FOREX Trading

If you want to learn FOREX trading, and make big money - you can do it. The proof is an experiment over two weeks, with a group of novice traders. These traders were nicknamed the turtles and they went on to become some of the most famous traders of all time.

If you want to learn FOREX trading, dont fall into the trap of believing that you can follow someone else. Get the knowledge - and then take responsibility for your own financial success. You will then be doing what 90% of traders dont do - and you can then enter the elite 10% of traders who pile up huge profits consistently.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com.

How To Start Investing For Financial Independence, Part 1

Today, I am going to start a multi-part series about how to go from being a beginning investor to being financially independent in a steady and predictable way. At our website, we get tons of e-mails about how do I start, how do I start with little $s, etc., etc., etc. If you are asking this question, congratulations because you are ahead of most. All of us have been there at some point.

I must warn you. What I am about to share here for free is what gurus across the nation charge thousands of dollars for in weekend seminars. The secrets revealed are going to seem pretty simple because quite frankly, there are no secrets. The methods used here have been done for centuries and there is no real reason to complicate them. Lets apply these principles to see how fast someone might become financially independent without betting the farm.

Realize that everybody has wildly different starting points and different financial goals. For this series of articles, we assume that an individual has access to at least $15,000 liquid capital (or home equity) to start, is at least breaking even with their current income versus expenses, and has decent credit to obtain financing. Note there yet?.... See the footnote below.

To start, what you need is to make your money grow while keeping your current income stream, and current expense level in place. I cant say this more plainly..To change your current financial path, you have to us your money and your time to grow additional income streams that increase wealth. There is many ways to do this but we are going to use investing in real estate as an example.

Now for beginners, here is the really bad news As an investor, you reap rewards by putting your money in HARMS WAY. You do everything in your power to minimize your risk but bottom line is that real investors make money by taking CONTROLLED risks. As investors get better, they learn how to make fantastic investment returns doing things that all their friends and relatives thing is crazy.. However, they know exactly what risks they are taking are why those risks are small in comparison to the potential rewards.

One reason people really like real estate investing is leverage; i.e, you can purchase an expensive property using 0-20% of your own money while financing the rest. So if you put 10% down for example, and then the property goes up by 20%, you have made a 200% return (ignoring expenses, taxes, etc. for simplicity). Of course this works in reverse If the property drops by 20%, you have lost not only your original investment but have to come up with another 10% as well.. Ouch!

For someone beginning, here is what I would suggest: 1) Look for an opportunity that will return at least 150% in 2 yrs or less;

2) Be mentally and financially prepared if the investment does not work out;

3) Have VERY good reasons why you dont think you will lose money You may not make as much as expected but you would rather not lose money at this stage.

4) Be patient. This single result should not either make or break you but it is crucial to a longer term plan.

In our Mastermind Group, we are bringing out a land project (see related article Land Investing that appears to meet these criterion (each investor has to decide for themselves). So lets say the purchase price is $150,000, with 10% down and another $3,500 in closing costs. With good credit, then the financing obtained would make the land payments for 2 years while waiting for growth.

Now lets say after you did your analysis, looked at what had happened in the past, looked at why you thought more and more people would want this property, etc., you decide that you think this property will average 20%/Yr escalation over the next 2 years. MORE IMPORTANTLY, you decide that barring a major meltdown in the market, you think there is little chance that you cant at least break even after 2 years.

So if you end up being right about the growth, then you might net a tidy $43,000 (before taxes) or so after everything is considered. After long term capital gains at 15% lets say, then you just picked up about $36,000 of the markets money. That is money that if you take a loss on the next investment will not be nearly as painful as if you lost your original money. When you combine this with your original investment amount, you now have around $55,000 of operating capital for step 2.

Realistically, you cannot predict how much you will make from the investment. When I invest, I try to establish in my mind what is reasonable. Frequently, I have been surprised to the positive and made much more than expected. Sometimes I have made less. The key being to put yourself in a low risk situation where you have a strong reason to believe the market will go in your favor.

To accomplish this first step, lets look at what you really had to do:

1) Had to be willing to put $$ in harms way;

2) Had to educate yourself enough to evaluate the risk and the opportunity;

3) Had to find the opportunity or be in a position to have the opportunity presented to them;

4) Had to act.

I would like to comment on the education side. As a former professor, I have seen very smart people spend 1,000s of hours and 10,000s of thousands of dollars educating themselves to earn a living; this is a great move in many cases. On the other side, I have seen very smart people who want investing to be a major source of income but will not spend any time or any money educating themselves.

To me, this is a recipe for disaster. By the time we finish this series, you will see that with a few simple steps, implemented over time, many people can easily produce more money than from their regular job. Furthermore, many people will put 100s of thousands of dollars at risk but know almost nothing about what they are doing. If you chose the path of making your investment dollars grow steadily with time, I hope this does not end up describing you.

** Footnote: If you are not yet at that level, here is what I suggest. First, read Michael Mastersons book called Automatic Wealth. This is an excellent book on how to rapidly change your financial position while staying employed. Next, I would read Van Tharps new book called Safe Paths To Financial Freedom. Van uses a very different thought process from many and so adds a great deal of rounding. Like anything else, you will not agree with everything written in these books but they provide some great thought processes. When you have some capital and are cash flow positive, them come back and revisit this article.

Chris Anderson is a leading authority on preconstruction real estate investing and has been referenced in many venues including the New York Times and USA Today. Free sign up at GetPreconstructionDeals.com to get continuing education and articles or visit his Investing Mastermind Group to get access to world class investing projects.

How a First Time House Flip Went Bad

Lets call him John. A bright and hard worker just trading time for dollars at his regular job. His first house flipping experience could have been a lot better.

John was watching Property Ladder on the A&E network one day and got the bright idea to flip a house himself. After all, those people were making money. A complimentary show Flip This House confirmed that money could be made, lots of money.

If you havent seen Property Ladder, its a television show that features first time home flippers. Usually in that show the inexperienced flipper, egged on by Kirsten Kemp, make almost a years salary or more by fixing up an old house and selling it. Kirsten Kemp is a veteran of flipping houses and is a bit too pretty to be mistaken for Bob Vila.

John figures that the people featured in these shows are not all that bright and certainly he could do as well. With a bit of nervousness John put a 10% down payment on a home that needed repairs and begin the repair process. Or did he?

The first thing John did was to ponder what really needed to be fixed and if he needed a contractor to do it. Two weeks went by.

After getting several bids, John chose a contractor to come in and totally renovate the property for $11,000. That included paint, carpet, appliances, and a new wall to turn an open area into another bedroom. Once it was agreed, the contactor was to start working. As luck would have it, the contractor had some unfinished jobs and couldnt start for another two weeks. John was patient, after all it was going to be a great flip and he was going to make money. It was just another $800 for an extra month, no big deal.

Once the contractor started he stared with a bang. Just like on the show Flip this House a big yellow dumpster was deposited on the lawn and a crew started ripping out wall paper and junk from the house. That demolition lasted about two days.

The next thing this go getter contractor did was to disappear for another two weeks. The excuse: Men had quit and another job was pushing them behind.

To make a long story short, the contract took 8 months to get nearly complete, and then John pulled the plug and fired the contractor.

John paid others to come in a finish what was started. He had now 9 months of house payments into the project, 10% down, and construction costs.

After the house was ready, John listed it with an agent, and it sat another month. John lowered the price a bit with the prompting of the agent, but got cold feet after two weeks and wanted to raise it again. Too late! The house had a full price offer. Good news, sort of.

All said and done John made a little money and got a whole lot of experience. It was a flop, but at least he didnt lose money.

Lets review what John, now wiser, could have done differently on his first flip.

Firstly, putting 10% is ok, but not ideal. John should have used private money or have financed the property at 100%. That money could have been used for fix up rather than being tied up in the property.

Second. John waited too long to decide what he was going to do. He should have known before he bought the property what his plan was. This would have saved two weeks at least.

Third. While John got a referral for the contractor, he should have gotten more bids. A deadline for the completion of the job, with penalties, should have been written in the contract.

Fourth. John waited too long to fire the contractor once he knew there was a problem. He was afraid that he would still owe the full amount if he terminated the contractor before the work was done. A proper contract would have prevented that fear.

Sixth. John listed with a realtor too early. The property should have been for sale by owner from day one and John should have tried to market the property himself.

Seventh. The price was set, and then changed too quickly. Better marketing would have netted John with a nicer profit. John should have known the selling price even before buying the property.

A lot of mistakes were made, but John still made a slim profit. All is well that ends well, but you dont need to make these same mistakes. Learn from John.

Scott Ames is publisher of BirdDogCity.com a website dedicated to those interested in flipping houses for profit, either retail or wholesale. You may visit the site at http://www.birddogcity.com

Investing - Enjoy the Precious Metals Commodities Ride

Our rather pessimistic articles of late on the housing bubble, the ominous warnings from a long list of financial experts and their suggestions on how to best weather the impending financial hurricane have been refuted by none other than the well read author of our "Crazy Man" articles (see "A Crazy Man's Rant or Right On? You be the Judge" and "Crazy Man's Rant - He's Crazy Like a Fox!") who sees things completely differently. Who is right - the eternal optimist with a different take on the economic environment or the big bad bears? Below are his comments.

"I have been beset, of late, by a number of anomalies in what I read and know about the economy and how they translate into an imminent housing collapse and how those linkages to other major segments of the economy would cause general economic bedlam.

Be that as it may, I am convinced that we are in the early stages of a multi-year secular commodities bull market.

I am equally convinced of "peak oil" and the merits of energy investments whether they be for reasons of supply, geopolitical or for environmental reasons.

I am also convinced of the large and continuing incremental demand for base metals and other commodities by the growing economies of Asia centered around China and India.

And, finally, I am totally convinced that this demand for base metals and other commodities will continue to escalate even if recession becomes the order of the day in the United States and other developed western economies because of the explosion of savings and demand by the growing middle class of Asia.

I am puzzled, however, as to why you are so convinced that housing demand and prices are on the brink of tanking.

As I see it the recent increase in short term interest rates are not that unsettling (John Mauldin, in his most recent article entitled 'When Will the Fed Stop?' supports my contention making the point that from an historical basis the Fed funds rate is not that high given the fact that from 1946 through 2000 the median fed fund rate was over 6% and yet the U.S. economy grew rapidly during that period) and the almost permanently static longer term interest rates continue to make housing a tremendously affordable proposition. In addition, institutional lenders continue to bend over backwards to accommodate buyers.

Your "Our Worst Nightmare" articles on the housing market (see "Our Worst Nightmare - The Puncture of the Current US Housing Bubble" and "Our Worst Nightmare - The Bubble Has Burst") are sensationalist and misleading. Housing is a hard commodity. It is real, concrete, can be seen and used. Compared to paper representing bonds and equity shares, it is tangible just as all other commodities are. So if we are really in a commodity secular bull cycle, why should we despair over the suggested imminent collapse of the housing market? Where is the nightmare? Moreover, if the FED continues to be accommodative in terms of money supply, interest rates and credit generally, why should the buoyant housing market fall apart prompting all the other elements of the economy dependent upon it to do the same? Again I ask: where is the nightmare?

As I see it, official employment figures indicate a strong economy and the CPI index is not in the least inflationary. Also, surveys of consumer and producer confidence stand almost at multi-year highs. Knowing that Robert Prechter preaches that public attitudes and social mood lead to behavior and activity - not the other way around as we almost all believe - this public optimism bodes well for a continuation of the current economic reality. With an always accommodating FED policy of M3 annual growth in the money supply of almost ten percent, all should be sweetness and light for continuing consumer led demand and economic growth. As I see it, all your 'ominous warnings and dire predictions' are also way off base and are alarmist at best.

You go on and on in your "Ominous Warnings and Dire Predictions" articles (see "Ominous Warnings and Dire Predictions of the World's Financial Experts Part 1 and 2 of a 6 part series) about all kinds of things but:

a) fail to address why so many people are so optimistic given the obvious inflationary consequences of growth in the money supply, bubble-like housing prices and a loss of affordability because of rising house prices.

b) fail to express concern that official numbers relating to the Consumer Price Index, unemployment, GDP and other measures of economic reality are largely bogus and

c) fail, most importantly, to mention the unfunded liabilities of Social Security IOU's, Medicaid, Medicare and its new drug plan, Freddie and Fannie Mae and the Pension Guaranty Corporation which purportedly backstops underfunded private and public sector defined benefit pension plans.

Now I may be talking out of both sides of my mouth here but I also feel strongly that this lengthening list of economic fundamentals are, indeed, alarming and can not continue indefinitely without a blow up. Politicians and central bankers along with their cheerleaders in the brokerage, banking and mutual fund industries, assisted by a largely ignorant and culpable popular news media, will, however, do their best to leave the toiling masses largely ignorant of economic realities for as long as possible.

Inevitably though, when the 'dam breaks' or the 'deck of cards' collapses, it will be quick and calamitous in its magnitude and impact. That is why I am well positioned in precious metals (gold and silver bullion, mining company shares and some well placed long term precious metals warrants to reap the major benefits of leverage these assets continue to give my portfolio) but somewhat less so in base metals and energy. That is my comfort zone which allows me to sleep soundly because it is the best way to protect my hard earned equity and prosper from the fallout of the coming financial collapse. The only thing I do not know is the extent of this future financial dislocation or its timing. What the heck, life wouldn't be very interesting if we could predict the future with absolute certainty, now would it?

For what it is worth, and I have been laughing all the way to the bank of late, I believe we are in a genuine commodities bull market and, as such, see no need to spend much time paying attention to the daily ebbs and flows of the market for these investments. I have done my research and analysis and taken a position. I periodically review the performance of my investments, fine tune them on occasion and then get on with my life confident that the markets will develop as we know they are destined to with our assets safe and growing. If there is a fiscal hurricane approaching as you suggest I am confident my portfolio is secure. (See "Warning! Fiscal Hurricane Approaching! Is Your Portfolio Secure?").

Call this the standard 'buy and hold' approach if you will, but it isn't. Traditional buy and hold investing makes a fetish out of percentage asset allocation between market sectors, stocks and bonds, picking individual stock winners and pruning losers all in the name of 'balance and diversification.' Lighten up and enjoy the commodities ride."

The bottom line conclusion appears to be for investors to strategically position themselves in a wide variety of assets including precious metals, mining shares and long-term warrants.

Dudley Baker is the owner/editor of Precious Metals Warrants http://www.preciousmetalswarrants.com a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders.

Online Currency Trading Strategy The Insider Secret

If you have an online currency trading strategy, then you should incorporate the advice given in this article to make bigger profits - and maybe even change a losing system into a winning one.

The advice were giving here is contrary to almost everyone else on this subject - keep in mind however that 90% of traders lose! So, lets stay away from the losers and make some profits.

Get Set for Bigger Profits

So, whats this insider secret anyway? - Its about looking at money management in a different light.

Money Management and your Odds of Success

Most traders are virtually guaranteed to lose - because they have money management strategies that ensure they are constantly going to get stopped out by normal market volatility.

For example, many traders risk say 2% of their equity on a trade. On small accounts, this amounts to just a few hundred dollars. They enter the trade, and market volatility ensures their stop is hit. The market then goes back in the direction they had anticipated - and piles up thousands of dollars! Our trader though, thinks he was just unlucky - and tries again, but he wasnt unlucky, and volatility will take him out every time.

Money Management Guaranteed to Lose

A string of small losses soon adds up, and the trader runs out of money - and his online currency strategy is at an end.

The trader may have been right, on where markets were going - but got stopped out of the trade - and ended up losing instead of winning.

Does this sound familiar? - It happens all the time.

How to Protect Equity and make Bigger Profits

Here are seven tips to incorporate into your currency trading strategy, to protect equity and build huge profits.

1. Dont listen to advisors or brokers. Advisors dont care if you win or lose - and brokers certainly dont mind, as they work on the assumption you will lose anyway. The more commission a broker makes the better - and tight stops ensure this.

2. You need to risk more per trade - so you need to be very selective in trades. Forget day trading, and concentrate on the big, longer-term trends.

3. Keep in mind this truism with risk goes reward. Without risk, there cannot be big rewards. Currency trading offers big rewards - but you have to be prepared to take the risk.

4. Taking a risk with no thought, and taking a calculated risk, is entirely different. If you are taking a bigger risk, you are not necessarily going to lose - it depends on the logic behind the trade - and the profit potential. Thats why you should trade sparingly - and concentrate on the big trends.

5. Use up to 10%, or maybe even more, on the trades you are confident in - these are the big moves - and you dont want to be stopped out!

6. Dont move stops up too quickly to protect equity big currency trends last months or years - so give the trade room to move. You dont want to get into a big trade, and get stopped out on the first correction - if you think the trade is going to be big, then have the courage of your conviction.

7. Use options as a vehicle theyre great if used correctly - to give you staying power. Use at the money, or in the money options - with plenty of time value, for greater staying power. Options are a great tool, but NEVER buy out of the money options - or options that are close to expiry.

An online currency strategy consists of a number of components - and the one that lets down the bulk of traders, is money management. They try so hard to avoid risk, but end up creating it - and lose. Dont make this mistake in your currency trading strategy - you need to take risks, pure and simple - and as the famous, US general George Patton said:

Take calculated risks - that is quite different from being rash

The fact is, most traders dont believe this they end up creating risk by trying to avoid it - and thats why their currency trading strategies fail every time dont make the same mistake!

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and money management info. Visit our web site now and grab your CD http://www.tradercurrencies.com

Forex Trading - The 3 Keys to a Winning Trader's Mindset

Forex trading is simple to learn, and anyone can acquire the skills - so, why is it that 95% of traders lose money? Many traders lose money because they have poor methods, though some have sound methods but still lose - because they lack the right mindset to succeed.

Here well look at the three keys for getting the mindset of the millionaire traders.

1. Desire and Passion

If you want success in anything - including forex trading, then you must desire success. If you have the desire, then youll do whats required to succeed. If you look at any of the legendary traders, they all had desire - and they loved what they did with a passion.

You must also have desire and passion for what you do. However, thats not enough - you must also avoid worrying about risk and setbacks. Currency trading success doesnt come easily so, if you cant build up the strong desire and passion required for successful trading, then you should find something else to do - as youll lose your money trading in the currency markets.

If however, you accept that its not any easy road - and youre prepared to put in the effort, then forex trading can earn you an income that most people can only dream of.

2. Confidence

You hear traders talk a lot about discipline when forex trading - but you dont hear them talk much about confidence. However, confidence is a vital component of your forex trading strategy - confidence in yourself not in some mentor, or guru youre following.

If you want to succeed in currency trading, then you have to have rock solid confidence that your currency trading system this will lead you to currency trading success. You must retain your confidence, even when youre losing money - and therell be periods when you lose money, for weeks, or months on end.

If you dont have unshakeable confidence that youll ultimately succeed, then currency trading will break you and youll throw in the towel before you become a winner.

To have confidence, you need to understand exactly how, and why your forex trading strategy works. This will give you a trading edge - and ultimately, success. If you dont know what your trading edge is, then youll be joining the majority of traders - the ones who lose money!

3. Discipline

Youve probably heard that discipline is vital to trading success - and if you think that following a system with discipline is easy then, think again.

Lets look at an example of just how hard currency trading with discipline really is: In the eighties, legendary trader Richard Dennis taught a group of traders with no previous experience, how to trade - and he gave them a method they could all use. In 14 days, these traders were given trading accounts - and collectively, they quickly made over $100 million.

They were all successful traders - yet there was a huge variation between the results of the individual traders. In Curtis M. Faiths great book The Way of the Turtle, he discusses this in depth and the lesson is: Learning a successful trading system is not enough! You need the correct mindset to execute the system correctly and nothing can prepare you for this. You simply have to experience it yourself - and its tough trying to stick with a currency trading system, when the pressure is on - and youre losing money. Money is on the line and emotions are involved.

Many forex traders try to prepare for trading, with demo accounts - and making big percentage wins. However, theres no pressure - its practice, and its easy try doing it for real, with real money thats when if becomes difficult!

Now you have them - the three keys to adopting the right mindset, in order to achieve currency-trading success. Its not easy to achieve the winning traders mindset - but when the rewards are as great as they are in FX trading, you wouldnt expect them to be.

If you can adopt the right mindset, the world of currency trading will give you immense rewards for your effort. Good Luck!

Grab 5 FREE Trader PDF's and get the support you need to trade like a pro with our user-friendly multi-lingual learn forex trading. Get up to date financial news, real-time market prices, tight pip spreads, built-in risk management system, and 24-hour professional support.

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Forex Beginners Guide - Learn How to Trade in Forex Market from the Basics

Todays Forex trading is well known as a lucrative way to make money online. It became an essential part for investors portfolio as you can simply gain thousands in minutes by trading currencies at home. For those who are new to the trade, Forex means Foreign Exchange Market where it involves buying and selling the different currencies of the world. Profits are made through the difference of selling and buying price you earn when you buy-low sell-high while lose when buy-high sell-low.

Forex is a true 24-hour market. The trade begins each day in Sydney, and moves around the globe to Tokyo, London, and then New York. Unlike any other financial market, investors can respond to money-value fluctuations caused by economic, social and political events at the time they occur - day or night. Major currencies traded nowadays are United States dollars, Australian Dollars, Japanese Yens, British Pounds, Swiss Francs, Canadian Dollars, and the Euro Dollars.

In the past, small speculators are not allowed to trade Forex freely as it is now. The minimum required business sizes are large and the financial requirements for trading foreign currencies are strict. Only huge multi national cooperation and banks are able to fit into the business. In fact, large international banks are still the remain as the main players in currency exchange market. Deutsche Bank is one of the top currency traders; along with other major banks like UBS, Citi Group, HSBC, Barclays, J. P. Morgan Chase, Coldman Sachs, ABN Amro, Morgan Stanley, and Merril Lynch; these banks are said to be responsible for more than 70% trades in currency market. Forex trade is not open to the publics until year 1998, where big sized inter-bank units are sliced into smaller pieces and offered to individual traders.

It is simple to get started in Forex trading, an funded Forex account and a computer connected to the Internet is more than enough to get you moving. However, to start trading and to earn in the trades are different. Trading Forex is a high risks game and traders should always follow certain principals, listed below are a few of must-dos when trading in Forex market.

1. Educate yourself before trading in Forex market

As in any trading markets, building up your trading skills and knowledge is the very first step that you must take. Forex website www.golearnforex.net might be a good spot to get started for Forex beginners. To further your learning in Forex trading, seminars, workshops, video tutorials, online learning, or even books are handful to help us learn from the professional. Learn to implement technical charting into your trades; learn using indicators to determine the right time to enter/exit the market; brush up your experience by trading with a demo account all these are effective to ensure your smooth starts and it will definitely reduce your chances of losing money.

2. Having a trading plans

A good trading plan is much needed no matter you are a beginner or an expert in Forex trading. The Forex market itself is just a vehicle, to go to your desired destination, which is to gain profit and achieve financial freedom in our case, you have to drive your vehicle with maps and navigations. How much do you want to earn from the trades? How much you can afford to lose if things go wrong? What is the amount of capital you are putting in? Answer the questions to yourself when you are setting your trading plan. If you fail to plan, you are indeed plan to fail.

3. Mature mindsets and discipline trading

Trading Forex with discipline is important. Success in Forex trading could not be achieved by only plotting out the best trading plan. It is also depends on implementing the trading plan. Be discipline, trade according to your plan and never trade with your emotion no matter you are losing money or winning. Greed will stop you from taking profit at predetermined level; while fear will stop you from making the nice kill in the market.

Without a doubt, Forex is getting more and more popular. There are less restrictions in FOREX market. No limited market access, no liquidity issues-after market hours, zero commission fees, low capital requirements, and no restrictions on short selling. However, the risks in Forex trading should not be taken for granted. As you can always trade in margin, you might lose a lot more than you can afford if you dont plan your investment wisely. Seminars, e-Books, Internet, papers, plus video courses are all you need first before getting involved in the market.

Teddy, writer and webmaster in financial investment. Learn Forex trading from scratch in his website at http://www.golearnforex.net

Corporate Lawyers In Washington State

Corporate lawyers are needed for the works a corporate have. Corporate lawyer will do many things that are related to the corporation workings. It will help your corporation in getting a legal, official charter or articles of incorporation from the state for your corporation. In case of any litigation it will help you to fight it or come to any solution. You will also need corporate lawyers for advice and suggestions they can provide you with in the process of running the business. Your corporation or businesses have so many dealings, so many business activities, for which you will need a corporate lawyer.

You will need him for assistance in the legal matters. As in business many complications and legal matters may arise, so you will need corporate lawyers, who will take care of such matters for you. A corporate lawyer can even help in drafting business plans. Corporate lawyers can help in acquisitions, plant establishment, share trading and such other business activities. Washington is one of the business hubs in United States of America. So many different manufacturing companies are there in Washington like aircraft and missiles, chemicals, shipbuilding and other transportation equipment, metals and metal products, lumber, machinery etc.

There are other manufacturing companies like boats builders, trucks, space exploration equipment manufacturer, food processors, fruits, and vegetables and the makers of beverages, instrument manufactures, electro medical equipment, lumber and plywood manufacturer, computers peripheral manufacturers, construction equipment manufacturer, pulp and paper manufactures, printers and publishers manufacturer etc. So with so many companies working in different sectors the need for corporate lawyer is high. Washington economy is dependent on these companies. They are flourishing there because of the easy availability of the needed resources. To control these businesses and to comply with the legal requirements of the government, they need the expertise of the corporate lawyers.

Corporate lawyers in Washington will help their clients prepare and file for licenses. They help in filing applications for approval from the regulatory authorities also. They represent the client in such administrative adjudications. You can search for corporate lawyers in some websites to find out the corporate lawyer in your place. Corporate Lawyer locator is available for easy search of such lawyers. Websites provide information on the lawyers, their profile, their experiences, their history and charges etc. Listings are provided to the interested lawyers who can list themselves and their services. They can include their profiles in these websites. Corporate lawyers specialize in different areas.

So you will find lawyers handling different corporate functions. Lawyers may specialize in areas like bankruptcy, international law, environmental law, intellectual property etc. Lawyers may be categorized according to the clients also. You will find corporate lawyers working specially for waste disposal agencies, timber companies, computer and technology companies, construction companies, insurance companies, real estate companies, food processing companies and so on. Some corporate lawyers specialize in a modern day issue of intellectual property right. They help the clients to protect their copyrights, logos, trademarks, product design, softwares etc. from illegal use and such activities which may hamper in the profit. Another very busy field is insurance, where corporate lawyers help the companies to avoid unwarranted claims. They represent the insurance companies against claims in the court. These Washington corporate lawyers help in creating policies in accordance to the law prevailing in the Washington state.

Corporate Law can vary by state. There are different types of corporations in Washington like close corporations, S corporations, professional corporations, nonprofit corporations, and general corporations etc. You will find different corporate lawyers and corporate law firms for all these different corporations. In Washington you will find lawyer who does private practice. Some work for firms. Some others work for different companies. You can always hire a single lawyer or a law firm, when you need, for doing your chores in law related activities. You can also employ one full time for regularly doing such activities.

There are some corporate lawyers employed by the government at various levels. They help in developing programs, create laws, establish rules and regulations, procedures and so on. Some of the corporate lawyers work in the law schools, preparing future young corporate lawyers. In Washington, today many of the lawyers use Internet and computer for their work, along with conventional papers and libraries. Most of the lawyers work from offices. Some meet clients at their own offices, or some other places.

Bikash is an MBA who works as an freelance writer. He worked for one of the best private banks in India. He has been writing for the last 5 years. He has worked with many US,UK and Indian clients. Visit him at http://bikiassam.tripod.com

Using Lapel Pins To Promote Your Organization

Perhaps you want to include a lapel pin in your recognition program. You can use lapel pins for your fund raising efforts. In any of the above cases you face the decision of buying stock lapel pins or having your pins custom made with your logo and message.

In some cases it is less expensive to purchase stock lapel pins but if you want to enhance the image of your company or organization there is nothing better than a custom made lapel pin. With a custom made lapel pin you can have your logo displayed proudly.

How much could you save if you were to buy stock lapel pins?

It will vary but, how much can you win if you include your logo on it? I would say a lot. What would you like better if you were the one receiving it? You know the answer. Now lets say you decided to get your company's lapel pins custom made, and lets assume you have no idea where to start.

First you need to get all the specifics you can think of from your company or organization, and then submit them to your sales rep.

What are the lapel pins going to be used for?

This is a very important piece of information that will help your sales rep recommend the style, size and finish that will suit your needs.

How many pins you are thinking of purchase?

As the price breaks depend on the quantities, maybe you will only need to buy a few more and save the big bucks.

When is the latest day you need to have your lapel pins in hands?

Maybe your are planning ahead (good for you) or maybe this is a last minute thing. As in any other manufacturing process, there is a certain time frame in between placing the order and shipping it to your location so it is important to communicate it in advance.

Do you have artwork ready?
Maybe all you have is a drawing, or an idea, or just the logo and will need some help creating the art, or perhaps your company has its media kit with all the specifications for its logo.

In any of these situations, it is important you communicate them to the sales rep so he/she can have the artist work on your project in the most efficient manner.

How are you going to pay for them?

Credit card, check, purchase orders, it is advisable that you check on the type of payment accepted,

These are questions that are often asked and will help guide you and make the best of your buying experience in your quest for the "perfect lapel pin".

Rosana Levesque is a graphic designer specializing in custom design of promotional items. She works at http://www.montereycompany.com The Monterey Lapel Pins Company, manufacturer of custom lapel pins, award and recognition lapel pins of the highest quality.

Online Forex Trading - A Simple Powerful Method Making Big Profits

We recently put together a very simple system from free info we got from the Internet and traded 4 trades to show its potential and we won 4 out of 4.

There is now another potential opportunity which we will look at with these indicators.

This system is simple and effective and any trader can use it novice or pro, also all the info you need is free.

Lets take a look at another trade.

The system

Only a few things to remember 1. When swing trading you are looking for support and resistance to be tested then for it to hold and price momentum to drop from the level of resistance or rise from support.

2. Breakouts When a price breaks a significant high or low you go with the breakout if price action accelerates.

3. We are using chart support and resistance and the stochastic indicator to time momentum ( if you do not know how the stochastic indicator works you should check our other articles and look at set ups on a free chart service such as future source.com) its the ultimate timing indicator.

4. We are also using RSI to show overbought oversold and Bollinger bands as back up indicators

Thats all we are using! Nice and simple but very effective.

Lets look at a live set up

The Euro

Prices have moved up to within striking distance of the recent high 1.3400 and are trading down from this level. Expect this resistance to hold and watch for the following:

RSI to move lower and the stochastic lines to cross and stay crossed to the downside with bearish divergence.

This indicates waning momentum to the upside and lower prices should unfold.

Target is the middle of the Bollinger band

If prices move back up and take out 1.3400 on a close basis, the odds favor the bulls and all bets are off.

Thats it a simple trade with low risk and good reward, swing trading within the existing range. A Simple System That Works. This way of trading may look simple, but as we have shown live in 4 trades it can make good profits.

Ok we were lucky and we won on 4 out of 4 trades but even if we were wrong on any of these trades risk was low and rewards were high. This system needs you to pull the trigger on trades but if you practice it you will soon be piling up some big profits either swing trading, or trading breakouts.

Good luck and good trading.

FREE ESSENTIAL TRADER PDF'S AND MUCH MORE

On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

High Barrier with Low Profit

Conventional wisdom says that when you create a high barrier of entry for your business, it will be harder for new competitors to enter. As a result, your profitability will be high, right? Ehm, you are wrong on this one. Several excellent examples show that despite the validity of high barrier, it does not guarantee profitability. In fact, some lower barrier business can thrive in this business.

The truth is, many people equate high barrier business with high capital requirement. Capital creates barrier but that creates setback too. When you spend so much capitals on your business, it is harder for your business to turn a profit. Look no further than Amazon.com (AMZN). In the early part of the decade, Amazon was busy erecting barriers for its business, expanding its selection from books to lawnmowers. That strategy seemed to work well for Amazon but it takes them a whole lot of time to be profitable. Congrats to early Amazon.com shareholders. You would do well as the company has turned profitable for the last few years. However, cumulatively, Amazon still lost a combined $ 2.02 Billion since its existence.

That alone should deter you from investing in companies depending on capital to erect barriers. For one, the future is uncertain. The longer it takes to be profitable, the higher risk it won't achieve that. Heck, I can even give you more examples of high barrier low profit proposition. How about the airline industry? Sure, nowadays, the barrier to entry is a lot lower. But, you still need to spend all those capitals to hire fleet, pilots and so forth. So far, the only established airlines that consistently make a profit is Soutwest Airlines (LUV).

You might say that low capital business cannot compete with high capital business. That thought again is wrong. How about restaurant operators such as Mc. Donalds? Opening a restaurant does not take that much capitals. How about creating an information based website such as CNET.com or MySpace? While these business has lower capital barrier, if you can make your product & service unique, you will be on your way.

While high capital is a barrier for new competitors to emerge, it does not guarantee profitability. Meanwhile, low capital business may have thousands of competitors springing up each day. But, with your business unique proposition, your business can thrive and profitability will be on the horizon. Therefore, creating barriers with high capital expenditure is not a prerequisite for business success.

Get your free investing idea and submit your investing articles at Novice Investing

Forex Charts - Using The ADX Indicator For Bigger Profits

If you're using charts, then you want to trade the strong trends - and the Average Directional Movement Index Indicator, or ADX, enables you to do this.

Wells Wilder developed the ADX, and outlined it in his classic book New Concepts in Technical Trading Systems.

Lets look at this essential indicator in more detail - and see how to apply it on your forex charts, to give you greater accuracy when generating your trading signals.

Determining the Strength of the Trend

The ADX is a momentum indicator, which aims to measure the strength of the trend - and attempts to determine if the market is trending, or is trading sideways.

The Advantages of the ADX

A core belief of technical analysis is that a strong trend in motion is more likely to continue, than reverse. Therefore, you always want to be trading strong trends - as your odds of success are higher. The Average Directional Movement is a good indictor and you should consider using it as part of your currency trading system.

The Technical Bit

For the boffins out there, heres the technical bit dont worry if you dont understand the calculation, its easy to use when visually plotted. The ADX is based on the comparison of two other directional indicators, both of which were also developed by Wilder, and they are:

Positive Directional Indicator (+DI) and the Negative Directional Indicator (-DI) to produce ADX as showed in the following formula:

ADX = SUM[(+DI-(-DI))/(+DI+(-DI)), N]/N

Where:

N: Refers to the period of calculation. The formula above produces the ADX line, which oscillates between 0 to 100 values. The +DI and -DI are both present and can be seen to make up the indicator.

You dont need to understand the above calculation to use the indicator you only need to accept that the indicator works.

The indicator is easy to use when its visually plotted - and youll find it included, with most of the good forex chart services.

How to Trade using the ADX Indicator

The ADX its not a bullish, bearish trading signal generator - and should never be used as such.

The ADX indicator simply indicates the strength of the trend - and other indicators should be used to enter, and exit trades.

Although the ADX fluctuates from 0 to 100, it rarely moves above 60.

Use the ADX in the following way:

Readings above 40 indicate the strength of the trend.

Readings below 20 indicate range trading and flat periods of consolidation.

You can use the crossing of +DI and -DI to determine the trend direction; when +DI crosses -DI upward, its a bullish signal, on the other hand, when +DI crosses -DI downward its a bearish signal.

The ADX line is a great momentum indicator and like the RSI (also developed by Wells Wilder), the ADX it will help you trade the strongest trends - and give you advance warning of changes in momentum.

The Bottom Line

If you want currency trading success, you cant just trade support and resistance levels, and hope they hold or break. You need confirmation of momentum to get the odds on your side - and the ADX indicator will assist you.

Final Words

New Concepts in Technical Trading Systems was published in 1978, and was one of the first trading books I ever bought. Every trader should make this book a part of his or her forex education. If you want to learn forex trading the right way, get the book, and use the ADX indicator to increase your chances of making big FX Profits.

Grab 5 FREE Trader PDF's and get the support you need to trade like a pro with our user-friendly multi-lingual learn forex trading. Get up to date financial news, real-time market prices, tight pip spreads, built-in risk management system, and 24-hour professional support. Grab your FREE PDF's NOW:
http://www.freeforexguidesonline.com

Little Known Tips To Stop Day Trading Losses

Studies have shown that you should never risk more than 2% of your float on any trade. Why 2%? Well, in fact, many day trading professionals will tell you that 2% is too much. Theyll risk 1% or even as little as a quarter of a percent on any trade. Whatever percentage you pick, the idea is to ensure that no one trade is really going to affect your day trading float, positively or negatively.

Many traders dont appreciate how powerful this rule is. By simply changing the amount of capital you risk in your day trading, you can turn a system from returning 10% to returning a 100% per annum. Now, by increasing risk, and investing more in a trade, you do increase your chance for reward. However, you also end up increasing your draw down as well. You may want to do a bit of testing to understand the importance and the power of changing this one variable. I always recommend that you never exceed a 2% risk. Sometimes it is difficult to understand this simple fact; keeping your losses small will help you be successful in day trading.

Lets look at an example of the 2% rule in action. If we had a day trading float that was $20,000, using the 2% rule we set our maximum loss to be $400 on any one trade. With this maximum loss, we could have a string of 50 losses in a row before we had no more capital left to trade with. In most day trading systems the chances of getting 50 losses in a row is very, very slim. However, the chances of going broke are even smaller, because when you implement the 2% rule correctly, the calculation is based on the current float size.

So, initially 2% of $20,000 is $400. However, if we experienced a loss first off, our day trading float would now be worth 19,600 dollars. We then calculate 2% of this new value, and set our maximum loss for our next position. 2% of $19,600 dollars would be $392. You can see that each time we experience a loss, our next maximum loss would shrink. As our portfolio increases in size, were happy to take on more risk as well.

I thought Id play around with a few of the figures just to see what would happen if we had a string of six losses in a row. After receiving six losses in a row, our day trading float would have decreased to only $17,717. After six successive losses, weve only lost $2,283. Now, thats managing your risk.

The fact that the loss is such a small component of our day trading float makes it much easier to gain back those losses. In this example, weve lost a little bit more than 10%. To gain back that loss and break even, well need to make 11.1%. Now, imagine if we didnt have good money management in place and we had a draw down of over 50%. If we have a draw down of 50% and we loose it, we need to make 100% return on our remaining capital to break even. You can begin to see the how a larger draw down makes it more difficult to recover from losses.

Novices often risk more than 2%. Even if youre starting out with a small day trading float, you should practice good money management. You need to position yourself so that you can endure long strings of losses, and maintain your day trading system. When the market does turn around, youll be in the market positioned to capitalize on its moves. Thats what setting the maximum loss is all about, it keeps you in the market, allowing to you to keep your day trading system going. If you can survive some losses in your day trading, the profits will come.

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Forex Trading - Instantly Increase Your Profits With The 80 - 20 Rule

The 80 20 rule was not devised for Forex trading - however if you apply it in your trading, you'll instantly increase your profit potential. The rule is simple to understand and apply - and all Forex traders should use it.

So, what is the 80 20 rule, and why is it so powerful in terms of making Forex profits?

The Logic of the 80 20 Rule

In the nineteenth century, Vilfredo Pareto, an Italian philosopher, observed that a small section of the population held most of the money and power. He postulated that in most countries, 80% of the money and power was controlled by around 20% of the people. Therefore, 20% of the participants accounted for 80% of the results.

The 80 20 rule applies to many other areas of life - including Forex trading, and in simple terms, the key point to consider is this:

80% of your results will be generated by 20% of your efforts.

This also means that:

20% of your results will be generated by 80% of your efforts.

In Forex trading, its a fact that most traders make this critical error they trade too much - and try to force results by working too hard.

Heres what you need to do, to apply the 80 20 rule in Forex trading, and increase your results:

1. Cut out short term trading - like Forex day trading. In day trading, you trade frequently - but it simply doesnt work. This is because all short-term volatility is random - and you can never get the odds in your favor.

2. Only trade significant technical patterns - such as critical breaks of support and resistance, with your Forex trading system.

3. Risk more per trade on the good trades - up to 20% is OK. Remember, risk goes with reward - and you need to take meaningful calculated risks, when the odds are in your favor.

4. Dont diversify! Forex traders think this spreads risk, but all it does, is simply dilute profit.

In terms of your Forex trading strategy: Focusing on the above will make you more money but youll also reduce the effort you put in.

Shift your emphasis to long term trading - and only trade the best signals. By doing this, your workload - and the amount of time you need to spend on your Forex analysis will be reduced.

If you apply the 80 20 rule to your Forex trading in the above way, youll cut the effort you put in. Youll also increase the profits you make - and thats what all Forex traders want!

Cutting the Effort You Put In and Getting Bigger Rewards

Many people think that the more effort you put in, the better the results you obtain. This is true in many areas of life - but not Forex trading! Here you are paid for being right with your Forex trading signals - thats all.

Also, dont fall for the myth that the more you trade, the better your chance is of having Forex trading success. This is simply not true - because the big trades, with the best ratio of risk to reward dont come around that often.

Incorporate the 80 - 20 rule in your Forex trading strategy, and watch your profits soar.

Grab 5 FREE Trader PDF's and get the support you need to trade like a pro with our user-friendly multi-lingual learn forex trading Get up to date financial news, real-time market prices, tight pip spreads, built-in risk management system, and 24-hour professional support. Grab your FREE PDF's NOW:
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Learning to Trade Forex

Forex (foreign exchange) is a specialized form of day trading involving the simultaneous buying and selling of many of the worlds currencies. Forex is not traded at a central exchange, but via interbank, making it an over-the-counter (OTC) transaction. The forex market is traded via telephone or computer (internet), and with centers of trading in New York, London and Tokyo is not only a global market, but a 24-hour one, as well. Forex; however is speculative, and should not be taken lightly. Learning to trade forex is not difficult, but is a necessity before entering the market.

Learning to trade forex is almost as easy, from an accessibility point of view, as signing on the internet. Online courses abound, ranging from simple introductory classes to deeply involved multi-step courses. The prices range from simple to deeply involved as well, costing anywhere from zero to hundreds. On-location courses, classes at actual physical locations around the country are available as well.

Whether the trader chooses a brick and mortar school or a cyber space one, the course should include a detailed syllabus and offer a wide range of topics The classes should also be geared to the traders background: new to forex, new to trading, finance background, no finance background, etc.. Once a course is found that is a good match, learning to trade forex should be straightforward and easy to follow, and should consist of some basic lessons.

First, learning to trade forex should address how the forex market works, what the terms mean and how a trade is conducted. Next, trading platforms and their details, including the functions and advantages of the different features, should be explained and discussed. Reading currency charts, analyzing prices and understanding what spread means are essential. Risk management, handling and possibly preventing losses are also of importance.

Brokers can be a source of learning to trade forex. Though most of them offer classes only after the trader opens an account, the classes are usually free, and sometimes include free demos of simulated trades. For a newbie, this can be a dry run to see if forex trading is the right path, and if the broker fulfills the traders needs.

Professional traders are another source of learning to trade forex. Some traders, like Peter Bain, who has put together a multi-media forex trading course, have insights and knowledge they are willing to share. Other professional traders participate in webinars (seminars on the web) and in interactive online sessions that teach and mentor.

Investing in a quality forex trading course is a good step to being successful in the market. Forex is speculative, enticing traders with possibilities of huge profits. Unfortunately, forex can also produce incredible losses. Forex trading is a pendulum that needs to be understood and monitored. Learning to trade forex may require time and a bit of money, but the knowledge gained is well worth the extra effort. Bottom line: Find the course that works for you, then put it to work for you.

Thomas D. Houser
The key to successful Forex trading is knowledge.
http://www.bestforexcurrencyinfo.com/

Forex Trading - 2x Currencies with Huge Profit Potential Now

Most forex traders tend to stick with the majors against the dollar when trading forex, but some of the lesser traded currencies can have as much if not bigger profit potential. Here we will look at two of them, in which a simple buy and hold strategy could make 100% or more per annum.

Two great currencies to trade are the Australian and Canadian Dollar Why?

Because their commodity producing nations and there currencies reflect this.

There are huge rises across the board as the new emerging economic giants of India and China expand at a rapid rate and need commodities to fule this growth.

Just using a buy and hold strategy in these currencies could yield triple digit gains per annum, with low leverage.

This is not a clever strategy, its common sense and suits the patient trader.

Lets look at why this strategy works:

The Canadian dollar has risen as a result of the higher oil prices and should continue to do so, as long as oil prices remain firm and they dont look like dropping much in the near future. Canada has the second largest known reserves of oil and only Saudi Arabia has more. Furthermore, Canada has been the largest supplier of oil to the U.S for the last 7 years, supplying more than even Saudi Arabia. In conclusion, strong oil prices and volatility in the Middle East strengthens the Canadian dollar against its southern neighbor.

Now lets look at Australia. The country is the third-largest producer of gold in the world today.

The Australian Currency is clearly affected by the fortunes of gold prices, therefore gold price increases nearly always strengthen the Australian dollar while decreases will weaken it - relative to most other currencies.

Understand this simple fact:

A forex investor needs to understand which nation's currencies are vulnerable to commodity price increases - in broad terms:

The US economy is highly sensitive to world commodity price rises in general and rises normally put pressure on the US dollar while the Australian and Canadian dollar streghten.

Will the gains continue?

If you look at the huge rises in the Australain and Canadian dollars in recent years, you will see how lucrative a buy and hold strategy can be.

Will commodity prices continue to strengthen?

We dont know, nothing in life is certain but the likelihood is yes, and buying the dips at key support and holding these currencies long term, looks a good way to make some triple digit gains - of course the key is to enter with the best risk reward and we will look at the techncial view in the next part of the article and how to enter these two great trading opportunities.

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On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html

Little Known Tips To Stop Day Trading Losses

Studies have shown that you should never risk more than 2% of your float on any trade. Why 2%? Well, in fact, many day trading professionals will tell you that 2% is too much. Theyll risk 1% or even as little as a quarter of a percent on any trade. Whatever percentage you pick, the idea is to ensure that no one trade is really going to affect your day trading float, positively or negatively.

Many traders dont appreciate how powerful this rule is. By simply changing the amount of capital you risk in your day trading, you can turn a system from returning 10% to returning a 100% per annum. Now, by increasing risk, and investing more in a trade, you do increase your chance for reward. However, you also end up increasing your draw down as well. You may want to do a bit of testing to understand the importance and the power of changing this one variable. I always recommend that you never exceed a 2% risk. Sometimes it is difficult to understand this simple fact; keeping your losses small will help you be successful in day trading.

Lets look at an example of the 2% rule in action. If we had a day trading float that was $20,000, using the 2% rule we set our maximum loss to be $400 on any one trade. With this maximum loss, we could have a string of 50 losses in a row before we had no more capital left to trade with. In most day trading systems the chances of getting 50 losses in a row is very, very slim. However, the chances of going broke are even smaller, because when you implement the 2% rule correctly, the calculation is based on the current float size.

So, initially 2% of $20,000 is $400. However, if we experienced a loss first off, our day trading float would now be worth 19,600 dollars. We then calculate 2% of this new value, and set our maximum loss for our next position. 2% of $19,600 dollars would be $392. You can see that each time we experience a loss, our next maximum loss would shrink. As our portfolio increases in size, were happy to take on more risk as well.

I thought Id play around with a few of the figures just to see what would happen if we had a string of six losses in a row. After receiving six losses in a row, our day trading float would have decreased to only $17,717. After six successive losses, weve only lost $2,283. Now, thats managing your risk.

The fact that the loss is such a small component of our day trading float makes it much easier to gain back those losses. In this example, weve lost a little bit more than 10%. To gain back that loss and break even, well need to make 11.1%. Now, imagine if we didnt have good money management in place and we had a draw down of over 50%. If we have a draw down of 50% and we loose it, we need to make 100% return on our remaining capital to break even. You can begin to see the how a larger draw down makes it more difficult to recover from losses.

Novices often risk more than 2%. Even if youre starting out with a small day trading float, you should practice good money management. You need to position yourself so that you can endure long strings of losses, and maintain your day trading system. When the market does turn around, youll be in the market positioned to capitalize on its moves. Thats what setting the maximum loss is all about, it keeps you in the market, allowing to you to keep your day trading system going. If you can survive some losses in your day trading, the profits will come.

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Top Investments and Stock Picks for 2006

If you read the headlines today you will hear everything from recession, decline, slow start, etc... Everyone is commenting on losses or very marginal gains. Yet there are some investors like me that did really well in the last few years and are continuing to do well - and none of us fell for the late night TV investing scams (and they are ALL scams). Instead we were smart. This is how we did it and what we like (and you can verify the results or progress of these stocks by looking up their ticker symbols on the search engines Google and Yahoo):

1) Diversification is key - you need to have some percentage of your assets in mutual funds and exchange traded funds (ETF's). I recommend IJR (iShares S&P SmallCap 600 IJR Style/Mkt Cap ETF) as it follows the market, doesnt have wild fluctuations and always, consistently grows and pays dividends at the same time. IJR will be a great bet for a 20-30% gain in 2006.

2) Oil, natural gas and energy are king and anyone that says otherwise is an idiot. They will continue to grow and produce record profits throughout 2006. I highly recommend XTO - Cross Timbers Oil Co. Through the last 3 years their stock has grown over 800% and split numerous times. They are a definite ace in the hole and a runaway favorite. Great, solid management and a definite winner. I also like PNY, Piedmont Natural Gas. They are very consistent and produce very solid yields that they are always increasing. It won't produce the high returns of XTO, but a solid performer. XTO can be a highly volatile stock and is a rollercoaster of a ride at times but will produce solid results over time. PNY is a safe, solid investment and natural gas prices are only going to go up.

3) Hotels and travel - One name says it all CHH - Choice Hotels, they own most of your local Comfort inns and such. They average 50-60% gains per year and pay a slight dividend on top of that. A solid performer that tends to buck the economy.

4) Banks and financial institutions - BPOP, Popular Inc. The main latino bank of Puerto Rico and expanding into the U.S. You can buy it cheap right now and they are prime for a takeover - $$$. Solid dividends also and low price for a bank. Good investment value.

5) Mortgage companies - we will always need houses and a solid, customer service oriented company with a great record is a good buy. AHM (American Home Mortgage)- high yield, solid company, will produce great returns for 2006. Enough said.

6) Ebay, Yahoo, Google, Intel - You need to have a piece of the internet pie, but with whom? Ebay is your best bet. There is no competition - Yahoo tried and can't get their auctions off the ground. The others have simple technology that is easily copied and the risk is great and the returns limited. Google is questionable as it has risen well, but others with big pockets are stepping in hard - Yahoo and MSN.

Search engines like Google rise fast out of nowhere, but then they usually fall back into oblivion. Google is smart, though and is trying to diversify into other fields - maps, online libraries, gmail, etc... so they will stay, but I would go for Ebay. Ebay is trying to do what Walmart did - Expand into China, Japan, Korea, etc... With billions of new customers and no competition the skys the limit. Ebay will be rock solid for 2006.

There you have it. A safe, diversified group of true, proven performers that will guarantee you a great 2006. Also, they are all available through low cost trading companies - I recommend Sharebuilder.com - you can't beat $4 trades and their easy to use site. There is no need for a commissioned investment advisor (all they do is charge you extra money and fees, lie, and they can't possibly even come close to the workhorses I listed above). Do yourself a favor and print this out. If you care about your friends give it to them. Put it in your email lists. If you believe in helping others and making the world a better place then pass it on to everyone you can. These stocks will provide you and everyone else with solid gains for years. And a greater chance at financial freedom and the best thing is it didn't cost you a penny.

Just do me a favor and visit and promote my sites listed below (www.mdwholesale.com and www.bestskinpeel.com).

David Maillie is a chemist with over 12 years experience in biochemical research and clynical analysis. He is an alumni of Cornell University and specializes in biochemical synthesis for public, private, and governmental interests. He holds numerous patents including his recently awarded patent for headlight cleaner and restorer. He can be reached at M.D. Wholesale: http://www.mdwholesale.com and at http://www.bestskinpeel.com

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Review of Two Forex Analysis Software Packages

The most profitable stock traders often act on inside information, or information about the market that the average investor doesnt know or even have access to. This isnt true of the forex trading market. All the information needed to analyze the market and make well-researched trades is available to anyone. The problem is having the time to gather enough information, analyze that information and turn it into profitable trades.

Thats where forex trading software comes in. It is designed to follow trends in the market and recognize when a favorable position is likely to occur.

That doesnt sound so hard. And, in fact, it isnt. You can learn which trends to watch for and gather all the information yourself. The trouble with doing it manually is that the amount of data needed to track trends of every currency pair is voluminous! You can cut it down some, spend full time at it and still miss some important profitable trends. Having software do it for you is a huge assist.

Another good reason to use these forex trading analysis tools is to learn how the forex market works. Charts and analyses will lay out the trends the software is tracking. When it makes a recommendation, youll see what happened in the market to make the software foresee a significant jump coming. In this way, youll gradually increase your knowledge and learn how to make a greater percentage of wise trades.

Here are two good forex trading software packages at different price ranges. Choosing either one will be of great benefit. Of course, the more expensive one is superior by far, but your budget may dictate where you start.

TRADING SOLUTIONS

Trading Solutions is one of the most comprehensive forex trading tools on the market. It is very customizable and the incredible in-depth analysis given is second to none. Here are some of its features:

- Flexible charting tools - Easy-to-use interface - Customizable spreadsheets - Step-by-step wizards - Advanced technical analysis - Comprehensive signal analysis

Its pricey at $995, but its worth it, if you can afford it. Plus, you get a free trial. Give it a try and see if your trading success improves during the trial period. Perhaps youll find a way to dig up that purchase price!

LAZY TRADING

At $79, Lazy Trading is a much less robust tool for forex trading. But it could be the right tool if youre a beginner and just cant afford a more complete software analysis package.

Its a simplified version in most ways. It still does all the hard work by retrieving the forex data and analyzing and finding the trends. However, it wont present the detailed charts and in-depth analysis that Trading Solutions does. Instead it just displays a simple text recommendation saying if you should trade and if so, what you should trade. If you still find all the graphs and stats confusing, this will work for you as you learn. If youre experienced at forex trading, this one will surely be lacking the detail youll want.

No matter which forex trading software package you choose, you should see a substantial increase in favorable trades in your account by using it.

Michael Russell Your Independent guide to Forex Trading

Discipline Equals Profits For Market Timers

The winning market timer is the disciplined market timer. That very simply means he or she chooses a specific, dependable, market timing strategy and follows it.

How Easily Discipline Can Fail

An example of how easily discipline can fail is last month's sell off. A one day Dow decline of over 300 points and lower lows over the next two weeks. The urge to jump into bearish positions was almost overwhelming. Obviously, tens of thousands of traders did just that. Only weeks later the Dow is at new all time highs, the S&P 500 at new rally highs and the Nasdaq is close to breaking out to new highs.

Current volatility is extreme, but experienced market timers know that such times usually occur right before a new (and profitable) trend starts.

The point is... following your emotions will cost you money. Following a timing strategy will make you money, and importantly, will not allow you to take large losses in capital.

What Better Reason?

People differ greatly in terms of their ability to maintain self control and discipline. Those differences are why we write this weekly report; to drive home the fact that without following a timing strategy, most market timers will be doomed to failure.

Some market timers have no trouble whatsoever sticking to a plan. But others, when it is decision time, will usually find a reason "not" to take the trade. After some time passes, and they realize they have missed a profitable trade, they take the trade but enter at a price that is much higher or lower than was available had they followed the plan.

They may or may not make a profit, but the odds have certainly turned against them.

And what happens if the trading plan then calls for a reversal? A reversal that would have been profitable had they taken the initial trade?

You know the answer. What better reason could there be to... again... not take the trade. This is when hope enters the picture, and hope is usually the second to last emotion felt before fear, which is followed quickly by losses.

Develop Trust

Let's consider a few ways that self-control and discipline can be maintained when making trading decisions.

First, you must develop trust in your timing strategy. You should should know exactly what you are going to do when a signal tells you to enter a trade, and what you are going to do when a signal tells you to exit.

One way to develop trust is to study the "Trade History" pages for each strategy. A link to the trade history for each strategy is on every FibTimer report. You will see that there are losing trades, but these are kept very small. You will also see the large winning trades which make the strategies successful over time. By looking at the trading histories, you will develop trust for the strategy you plan on following.

Be prepared, and be willing, to make the trades when the signals are issued!

At Fibtimer, we provide the buy and sell signals. We will make sure you know what to do well before the trade needs to be executed. We will also explain why the trade needs to made, and often the previous several weekly reports will have discussed the probability of an imminent change.

Some traders make the mistake of assuming they can just "wing it" when the buy or sell signal comes. But this approach presents an excellent opportunity for the collapse of discipline. It often leads to "waiting" to see if the trade is successful before taking it. The problems with this logic are obvious, but they are not as obvious when it is time to make the trade and you are looking for a reason to delay making the decision.

Develop Confidence

Perhaps one of the best ways to maintain self-control, is to feel "confident" as you execute the buy and sell signals that we issue. You "know" that over time they will be successful. You "know" that during sideways markets the signals will exercise good money management techniques and keep any losing trades very small.

It's healthy to be skeptical, but if it interferes with your ability to follow the trading plan, skepticism will cost you money. You must execute the buys and sells with unwavering confidence. You can't second-guess. You must follow the trading plan with absolute assurance that over time you will succeed.

How do we post the excellent trading results that have been attained in our various timing strategies? Because the reports follow a disciplined plan. They follow the buy and sell signals without question. No if's, and's or but's. Accordingly, over time, they show the profitable results of sticking to the plan.

Over time, disciplined trading becomes easier. But be careful not to minimize the importance of self-control and discipline. The more disciplined you can be, the more profits you will realize.

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