Forex Automoney Review - Why is Forex Automoney Rated as #1 Forex Signal Generator

Forex trading signals had already played an important role in forex trading. Traders shed a lot of money just to have a perfect signal generator that will give and show them the real way to forex trading success. It is not unusual to invest in some forex trading signals creator that promise a huge profits. Internet had been playing a big slice of this information, giving the trader not just information about forex ins and out but most of all they had been the #1 source of new products and tools that you can use to start trading. By means of forex trading signal, trader had a grasp of what should be done on their trade. It plays a very important role in determining if a trader will generates huge profits. Because of this reason, many trader look for autopilot trading signals generator. There are lots of them on the net, but the question is how can you find the one that really works? Is there really a perfect signals generator? In order to minimize the trading risk it is very important to have a little knowledge about what forex trading signals generator should be acquire.

What are some of my criteria to pass the Forex Automoney as the #1 Forex Signal Generator?

1. The system works anywhere in the world. You can place your trade anywhere you want. The market is always open. You can also trade any time you want to. Making your trading easy and effort less.

2. The system is so easy and simple. all you have to do is wait for the information that they will going to give you and follow everything they tell you.

3. The system doesn't involve any of those complicated graphics, tables, charts and indicators that are all too hard to understand.

4. The system will provide you the so-called ready to use signals: "buy now" or "sell now". That's what's best and that's what forex automoney will give you. You don't have to think anymore - just buy or sell when they tell you.

5. It doesn't need a huge amount for initial investment. I know that you will agree with me that it is a fact that trading involves risk and having a small start up capital is just a perfect choice. 

6. The system doesn't ask you to have a prior trading knowledge or be a mathematician to generates huge profits.

There are thousands of manuals about Forex Trading Signals, technical analysis, thousands of guys who tells you how you should to trade. But they all make trading very complicated and - let's be honest - those systems and manuals gives you NOTHING and they just do not work. Be smart enough to try something new. Something that actually works based on experience of people who already tried and tested the system.

Forex Automoney - Is This System a Scam?

Statement 1:

MAKE MONEY JUST BY CLICKING - True

Let me explain how professionals trade FOREX everyday. When I arrive to my office every morning, the first thing I need to do is to log in my Forex broker account, read their news and analyses, combining their analyses with my own analyses , then input all the datum to my trading signals generator and start trading.

All I need to earn money is just to click my mouse and hit my keyboard. The statement MAKE MONEY JUST BY CLICKING is true. I can earn money just by clicking, and you can too.

Statement 2:

Use the system which made 4,000,000 Pips Trading Profit last year - True

Is it possible to made 4 millions Pips in a year? Yes, it is possible. Experienced Forex trader can make 600~800 Pips per day in just one currency pair by using several strategies (in-day trade or long-term trade). If they trade all 18 pairs at the same time, it is possible for them to made 4 millions in a year. But the fact is, they usually trade 3~4 pairs at the same time only.

Why You Should Never Try Forex On Your Own

It's simple really, most people have a desire to earn quietly, and when it comes to money, the last thing they want to do is try a 'group effort', because most of the time a few people in the group either have a screw loose, or are too risky, or too conservative, or or or... 

Unless you already have 20+ years of trading behind you, you still have A BIG learning curve to go through before you can call yourself a guru. Each step of growth and knowledge gained, will either cost you a heck of a lot of money/time through trial and error, OR you'll fluke out, and get lucky, and not have a CLUE what you just did in order to generate your profit.. ... . 

While many think the risk is low, many others feel that the forex markets are like a casino, you're gambling! Unless you have a strategy, you're going off of shear luck. 

So I'm hoping that you have a BIG horeshoe or two kicking around your house because luck will only get you so far in this game before... .. ... well .. ... before BAD luck happens.

Here at the Forex Automoney you will NEVER have to rely on luck, in fact we rather hate that term, there is nothing lucky about this business. I'm sure if you've traded before be it in live or demo mode, you've probably seen some rather unwarranted and unannounced changes that either spiked or plummeted your portfolio and earnings... 

Well now you can finally see and understand WHY such things happen, what events greatly impact the markets, when the best times to pull/stay are, and how to bank your winnings every single day like a pro!

What is an Index

To understand the use and functioning of the index derivatives markets, it is necessary to understand the underlying index. A stock index represents the change in value of a set of stocks, which constitute the index. A market index is very important for the market players as it acts as a barometer for market behavior and as an underlying in derivative instruments such as index futures.

The Sensex and Nifty

In India the most popular indices have been the BSE Sensex and S&P CNX Nifty. The BSE Sensex has 30 stocks comprising the index which are selected based on market capitalization, industry representation, trading frequency etc. It represents 30 large well-established and financially sound companies. The Sensex represents a broad spectrum of companies in a variety of industries. It represents 14 major industry groups. Then there is a BSE national index and BSE 200. However, trading in index futures has only commenced on the BSE Sensex.

While the BSE Sensex was the first stock market index in the country, Nifty was launched by the National Stock Exchange in April 1996 taking the base of November 3, 1995. The Nifty index consists of shares of 50 companies with each having a market capitalization of more than Rs 500 crore.

Futures and stock indices

For understanding of stock index futures a thorough knowledge of the composition of indexes is essential. Choosing the right index is important in choosing the right contract for speculation or hedging. Since for speculation, the volatility of the index is important whereas for hedging the choice of index depends upon the relationship between the stocks being hedged and the characteristics of the index.

Choosing and understanding the right index is important as the movement of stock index futures is quite similar to that of the underlying stock index. Volatility of the futures indexes is generally greater than spot stock indexes.

Everytime an investor takes a long or short position on a stock, he also has an hidden exposure to the Nifty or Sensex. As most often stock values fall in tune with the entire market sentiment and rise when the market as a whole is rising.

Retail investors will find the index derivatives useful due to the high correlation of the index with their portfolio/stock and low cost associated with using index futures for hedging.

 

Indian Stock Market

This Week market is having all Good Global Cues and Hopefully Crude will not make new height.So At the end of june market will start rising .First target is 4700 for nifty.July August market try to touch 5500.This is best time to buy shares for investors.You will never get this cheery again.Also market this year try to touch 6500 Nifty.

Some Sector which is top of the sector are steel and telecom.So Buy BOth sector aggresively.Give you good return in future.Two cherry this time is ISPAT and maharastra Telecom.Buy these shares for good return this year.

Indian Govt and RBI is taking some aggresive steps against inflation.Hopefully inflation will not go to double digit this year.

Crude condition will improve to the end of july because as production will increase price will go down dramitically.

So Second half of this year will be good for equity.One more reason is that FII in last six month sell out huge equity .Now the times to buy start soon.

What are price bands?

The exchanges have fixed price bands for all t securities within which they can move within a day i.e +-20%. In case of scrips on which derivatives products are available there is a price freeze of +/-20%.Orders outside the minimum and the maximum of the range are not allowed to be entered into the system. However in case of few specific scrips, from time to time the exchange has fixed price band of less than +/-20%.The previous day's closing price is taken as the base price for calculating the price bands.In case a member wants to execute a trade beyond +/-20% freeze (derivative scrips) then he will have to request the exchange to relax the price freeze for his particular order.

Can I trade on margin? You can trade on margin on select stocks.

What are GTC, GTD and IOC orders ? A Good Till Cancelled (GTC) order remains in the system until the trading member cancels it. However, the system cancels this order if it is not traded within a number of days parameterised by the Exchange. A Good Till Days/Date (GTD) order allows the user to specify the number of days/date till which the order should stay in the system if not executed. The maximum number of days for which the GTC/GTD order can remain in the system is notified by the Exchange from time to time after which the order is automatically cancelled by the system. The days counted are inclusive of the day/date on which the order is placed and inclusive of holidays. An Immediate or Cancel (IOC) order allows the user to buy or sell a security as soon as the order is released into the system, failing which the order is cancelled from the system. Partial match is possible for the order and the unmatched portion of the order is cancelled immediately.At ICICIdirect.com, all orders accepted are valid for GTD. Any unexecuted order pending at the end of the trading session for the day gets expired.

How will I be informed of my trade execution?

The trade executions are confirmed online and the trading history is updated immediately. In the Order Book, the status of each order is updated on a real-time basis. On execution, the status changes to 'Executed' or 'Part Executed'. You can view details of the trade executed by clicking on the link. In the Trade Book you will be able to see all the trades that have taken place. On clicking the link of Order Ref. No. you will be able to see details of the trade execution. In addition, you will receive e-mail confirmations. You can choose to receive the e-mail confirmation either for each trade when it is executed or a single one for all trades at the end of the day. The contract note will be send to you by mail at the end of the day.

Do I get online confirmation of orders and trades?

Yes, you get online confirmation of orders and trades - the status of any order is updated on real-time basis in the Order Book. As soon as you place your order they are validated by the system and sent to the exchange for execution. The entire process is fully automatic and there are no manual interventions.

Which shares will I be able to buy and sell?

You will be able to buy and sell all shares in the Cash Segment that are traded in the compulsory dematerialised form on the exchanges. As of date, there are more than 850 such shares. These shares are the most heavily traded shares on the exchanges and account for over 90% of the market capitalisation. More and more shares are being added to this category every month by the regulatory authorities. Of these shares, you may place orders for select shares in the Margin Segment.

What kind of orders can I place? You can place both market and limit orders.

Limit Order is an order to buy or sell securities in which you specify the maximum price per unit in case of a Buy order and the minimum price per unit in case of a Sell order. The actual transaction can be at a price more favourable than the price specified.

Market Orders have different interpretations for both NSE and BSE.Market Orders in NSE : This is an order to buy or sell securities at the best price obtainable in the market at the time it is matched by the exchange. Therefore, chances of its getting executed are better. In case of market orders for NSE, all market orders placed which are not executed become limit orders at the last traded price. Where a market order is not executed fully, it becomes a limit order for the balance quantity at the last traded price. Market Orders in BSE : Explanation Market orders can be placed only during market hours (i.e. when the Exchange is open for trading)

Online Investing

On which exchanges will I be able to buy and sell shares?Broker offers its customers execution capability on the National Stock Exchange of India Ltd. (NSE) and Stock Exchange of Mumbai (BSE).

Commodities: Trading Expert Reveal Secrets That Helps Beginners Master Commodity Markets

Nothing we do in society prepares us to function effectively in the commodity markets and an environment with no real boundaries. But, most of us are brought up to function well in society, so we`ve acquired strategies for fulfilling our needs and desires that are geared toward social interaction and acceptance. We don`t just take what we want we take other people into consideration, too. Not only have we learned to depend on each other to fulfill our needs and desires, but in the process we`ve acquired many socially-based techniques for assuring that other people behave in a manner that is consistent with what we want.

The commodity markets may seem like a social endeavour because there are so many people involved, but they`re not. While we may have learned to depend on each other to fulfill basic needs, the market environment is different: it`s every person for themselves.

Not only can you not depend on the market to do anything for you, but it`s extremely difficult to manipulate or control anything that the market does. If you`ve become effective in your personal lives at fulfilling your needs and desires by learning how to control your environment, but are existing as a trader in an environment that does not know, care, or respond to anything that is important to you, what do you do? You take control.

One of the principal reasons so many successful people have failed at trading, is that part of their success, outside the market, is due to their ability to control their social environment. To some degree, everyone has developed techniques to make their external environment meet their needs and desires. The problem is that none of those techniques work with the commodity markets. The commodity markets don`t respond to control and manipulation, unless you`re a very large trader.

However, you can control the way you deal with market information and your own behaviour. Instead of controlling your surroundings so that they fit your idea of the way things should be, you can learn to control yourself. Then you can view information objectively, and choose to behave in a manner that is in your own best interests. You do this by creating rules to trade by, and following them.

Nearly everyone agrees that you need to have rules to be successful in trading, but most traders have no intention of following any. Most people who are interested in trading resist the idea of creating a set of rules. The resistance may be subtle, but it`s still there. 

Often this is a response to how we acquired our first set of societal rules. Our parents, relatives, teachers, or friends gave most of the guidelines we live by to us when we were children. These guidelines were taught to us, we did not create them, an important distinction. During this time, many of our natural impulses to move, express, and learn about the nature of our existence through our own direct experiences, were stifled. Some of these impulses were never reconciled, and can still exist inside of us as frustration, or disappointment. The accumulation of these types of feelings can cause a person to resist anything that keeps them from doing whatever they want, whenever they want to.

The very reason most people are attracted to trading, (the unlimited freedom of choice and decision-making inherent in trading), is the same reason they feel a natural resistance to rules and boundaries. The need for rules may make perfect sense, but it`s difficult to generate any enthusiasm for these rules when you`ve been trying to break free of them most of your life. It usually takes a great deal of effort to break down a traders resistance to establishing and abiding by a trading regime that is organized, consistent, and reflects prudent money-management guidelines. But, once they do, the possibilities for attaining consistent trading success are limitless.

Option Trading Tip - Buy Deep In-The-Money Options

 

In times of high volatility, Buying deep in-the-money (ITM) options is a good way of implementing directional option trading strategies. 

This is because high implied volatilities, will eventually begin to come back down to more 'normal volatility' levels and when this happens, the at-the-money (ATM) and out-of-the-money (OTM) options are going to suffer.

Deep in-the-money (ITM) options, however will remain largely unaffected. Why you might ask? Well this is because deep ITM options have very little time value and it is the time value or 'extrinsic' value of an option that is effected by rising or falling implied volatility. 

In volatile markets, using deep in-the-money options can be more forgiving if you are right about direction, but your timing is slightly off. For example if you have a stock with a strong underlying uptrend that has experienced a healthy correction and you enter a little too early by buying Calls before the stock starts trending up again. 

Because deep ITM options have very little time premium, they offer somewhat of a 'buffer' should the stock move against you slightly or move sideways for a period before it starts trending again.

At-the-money and out-of-the-money options are ALL time value and therefore your timing in regards to the direction of the underlying needs to be spot on. In times of high implied volatility, any period of sideways movement, or a 'slowing' to how much a stock is rising or falling, can result in considerable erosion in the time value premium for both at-the-money (ATM) and out-of-the-money (OTM) option holders.

This is due to both a fall in implied volatility and also time decay. 

When it comes to 'neutralizing' the effects of volatility, buying a deep in-the-money (ITM) option can be very effective in this regard. 

Many traders argue however, that there are definite disadvantages to buying deep-in-the-money (ITM) options saying that they are 'expensive' and are prone to greater slippage due to a wider spread.

To that I rebut by saying that the word 'expensive' does not apply to deep in-the-money (ITM) options. The fact that they demand a higher premium is due to their 'real' intrinsic value. In regards to the wider spread, this is in most cases due to market makers not advertising their 'true' buy/sell price.

In my experience, placing an order that splits the bid/ask in half, usually results in a quick fill and a successful entry or exit.

Ultimately, I like to think of deep in-the-money options as a surrogate for the underlying stock itself.

In fact, if you go deep enough in the money, where the delta is 1 for calls and -1 puts, these options will move point for point with the underlying stock.

For 'short-term' directional traders (and LEAP traders - though LEAPS have greater volatility risk due to their higher vega), this provides an opportunity to effectively trade the options 'as if' you were trading the underlying stock itself, but for a fraction of the capital outlay.

That in my book is a smart way to use the leverage that options provide and 'trading smart, not hard' is fundamental to achieving consistent trading profits.

More Light is Shed on Mutual Funds

 

A prospectus for a mutual fund describing that fund's objectives, financial statements, and history probably doesn't sound like a fun read to most people. But a prospectus is an important document that adds detail and helps potential investors become more informed when making investment decisions. 

The added information has made a wealth of knowledge available on many mutual funds. This knowledge can potentially add to the confidence of an investor, should one take the time to get to know their mutual fund. 

Even Congress has jumped into the mix. In 2005, Sen. Daniel Akaka from Hawaii proposed the Mutual Fund Transparency Act, which would call for increased disclosure of mutual fund fees, as well as taking a more critical look at mutual fund advertising. While the bill was referred to committee, it signaled an increasingly watchful eye being focused on mutual funds by Washington.

So what are some of the latest areas of mutual fund disclosure to be affected? 

1) Holdings: In 2004, the Securities and Exchange Commission (SEC) ruled that mutual fund companies must post their portfolio holdings every quarter through the SEC's Electronic Data Gathering, Analysis, and Retrieval System, known as EDGAR. This allows mutual fund investors to find out if, and how, the fund is following its stated investment objectives. 

2) Fund Manager Compensation and Holdings: Fund managers are required to disclose how they are paid, and by fully knowing how the fund managers' pay is structured, you can consider if their objectives and plans are similar to your own. Fund managers now must also disclose how much they have invested in the fund, within a certain dollar range. 

3) Fees: Also in 2004, the SEC decided that mutual fund companies must disclose the amount of fees they charge per $1000 invested, as well as per $1000 invested assuming a hypothetical 5% gain. The increased transparency allows investors to compare fees to other mutual funds and decide if higher fees translate to performance. 

4) Breakpoints: The SEC wants mutual fund companies to do more to inform investors of potential breakpoint discounts on large purchases. 

These are just a few of the many disclosures and transparencies that are being encouraged or required by the SEC. The increased regulations are expected to continue in an effort to provide more information to investors. 

To know every small detail of a specific mutual fund is a tedious task, but it is one that many financial professionals perform in order to give their clients informed recommendations. While you, as an investor aren't expected to know everything, it does help to know that the extra information is available and more readily accessible than ever before. In the end, the more knowledge you have of your investment, the more confident you'll be of your choice.

An Analysis of Lenox (LNX)

Below is a letter from Mr. John L. Morgan, beneficial owner of approximately 7% of Lenox (LNX), to Ms. Susan E. Engel, Chairwoman and CEO of Lenox.

Dear Susan,

When your board offered me a directorship on September 18, 2006, we discussed the reasons that made it unacceptable. At that time, I reiterated that I could best serve the shareholders of Lenox Group by assuming a leadership role on the Board of Directors and playing an active role in formulating and guiding the strategic direction of the Company. Furthermore, I expressed my intention to not make changes in the management or Board of Directors. My views were based on information I had at that time. 

The Board's rejection of my offer to help the Company create a successful strategy has given me a different perspective. I now feel that the Board has decided to pursue a course of action that is not in the best interests of the shareholders and is a continuation of the strategies that have failed to create value over the past ten years. 

The management team and Board of Directors continue to behave like the Company is a large, successful Company that has margin for making more mistakes. I do not agree. My offer to assist the Company in changing its strategy to benefit shareholders has been rejected although I proposed to work with the existing management and Board of Directors. You have made your position clear and I hope this letter will do the same for me and other likeminded shareholders.

Very truly yours, 

John L. Morgan

The Ownership Situation

First, let me explain the ownership situation. The reporting persons are John L. Morgan, Kirk A. MacKenzie, Jack A. Norqual, and Rush River Group. Rush River Group is a limited liability corporation (LLC) of which Morgan, MacKenzie, and Norqual are members. 

Rush River was formed in December 1998 in Minnesota and "its principal business activities involve investing in equity securities of privately owned and publicly traded companies, as well as other types of securities." As far as I can tell, the only members of Rush River are the three aforementioned men: Morgan, MacKenzie, and Norqual. 

According to a recent SEC filing, Morgan beneficially owned 6.1% of the outstanding shares of common stock in Lenox, Rush River owned 0.79%, MacKenzie owned 0.07%, and Norqual owned 0.07%. 

Please keep in mind that this 7% stake in Lenox is controlled by Mr. Morgan; but, not Winmark Corporation (WINA), a publicly-held franchisor of retail stores. This is an important distinction to keep in mind (especially since Winmark is a public company).

Morgan is the Chairman and CEO of Winmark; MacKenzie is the Vice Chairman. However, their stake in Lenox has nothing to do with Winmark. In fact, last time I checked, Winmark did not have any material investments in marketable securities. 

The reported position amounts to 989,300 shares of Lenox. Shares of Lenox last closed at $6.23 a share. So, the position would be worth a little over $6.16 million. Since Winmark only has a market cap of $126 million, I want to make it clear Winmark does not have a position in Lenox - Morgan does. He just happens to be the Chairman and CEO of Winmark. I hope this clears up any possible confusion about Winmark. 

Lenox

Now, I can move on to discussing the truly interesting aspect of this news, Lenox itself.

Lenox is the result of a September 2005 merger between Department 56 and Lenox Incorporated. Prior to the merger, Department 56 was known for its "Village Series of collectible, handcrafted, lighted ceramic and porcelain houses, buildings and related accessories that depict nostalgic scenes". That last sentence was taken directly from the company's 10-K, simply because I couldn't write a better description myself. I assume most of you have seen the series. Even if you haven't, I'm sure you can imagine the concept of a little porcelain Christmas scene.

Obviously, the Lenox name is much better known than the Department 56 name. Therefore, when Department 56 acquired Lenox, it changed its name to Lenox. 

In its 10-K, the company calls the Lenox acquisition a "transformational event". This term is too often applied to mergers that are far from transformational. In this case, however, it's a perfectly accurate description. 

Whether the transformation is for better or worse is debatable; however, the fact that the merger has transformed the company is not debatable. To put the size of this transaction in perspective, consider this: Today, Lenox (the combined company) has a market cap of $88 million. In September 2005, Department 56 paid $204 million to acquire Lenox Group. Immediately, this should tell you two things. One, the acquisition was probably quite large relative to the existing business. Two, the combined company's stock price has tanked.

Both of these statements are true. Even when shares of Department 56 were a lot more expensive, the Lenox acquisition was very large relative to the existing business when considered from the perspective of market cap, enterprise value, sales, and just about any other meaningful measure of the size of a business. 

Obviously, the combined company's stock price has been falling hard since the merger. After all, the enterprise value of the entire company is not much greater than the amount Department 56 paid for the Lenox business. 

The market is assigning a value of close to zero to the newly acquired Lenox business. This is remarkable considering the fact that Department 56 rarely traded at a lofty multiple when it was a stand alone business. In fact, the company's shares often traded at a P/E multiple in the high single digits or low double digits throughout the past decade.

The New Business

You probably already know what Lenox does. If you don't, a quote from the company's 10-K does a good job of explaining what the newly acquired business does:

"The company sells dinnerware, crystal stemware and giftware, stainless steel flatware, and silver-plated and metal giftware under the Lenox and Gorham brands. Dansk is the company's contemporary tabletop, houseware and giftware brand. The company sells premium causal dinnerware and fine china dinnerware, giftware and collectibles under the Lenox trademark, and sterling silver flatware and sterling silver giftware under the Gorham and Kirk Stieff trademarks. The company believes that it is the largest domestic marketer of fine tabletop products."

I'm sure you noticed a bad omen in the above paragraph. One of the company's brands (Dansk) is described as the company's "contemporary" brand to differentiate it from the other two brands. Obviously, having fine products that are not considered contemporary is a bit of a problem. 

In fact, it may be a very large problem in the years ahead. Overall, it seems the market is moving away from formal dinning and towards more upscale casual dinning. This is not a new phenomenon; nor, is it likely to be a short-lived one.

On the other side of the scales, you do have the simple, undeniable fact that the company has one of the best brand names in its industry. It is also a big player in a very small industry. Those are both advantages that are difficult (if not impossible) to duplicate. For a $200 million business, Lenox has a lot of history - and perhaps, a lot of potential.

The Old Business

A big part of the problem with the performance of the company's shares (both over the short-term and the long-term) has been the performance of Department 56. In 2005, sales from Department 56's Village Series declined 21%, "which was consistent with the longer term trend" according to the company's 10-K. In fact, sales had clearly been declining each and every year from 1999-2005. Furthermore, sales in 2004 were substantially less than sales in 1996. So, even though there wasn't a continuous, straight-line decline in sales over the past ten years, the general trend for sales of the Village series has been decidedly negative for a full decade now.

To combat the "substantial attrition of the Gift and Specialty channel" the company has settled on two strategies intended to both "offset the decline of the Village business" and "to grow revenues long term". Those strategies are "expanding the company's channels of distribution outside its traditional Gift and Specialty channel" and "expanding the company's product offering to include year-round gift products." The former strategy sounds promising; the latter strategy sounds implausible. 

Lenox is already moving to implement both strategies. In fact, the company made a small acquisition that should help expand Lenox's year-round product offerings. But, I remain highly skeptical of attempts to transform the gift products business into anything other than a highly seasonal business. 

The Acquisition

At the time it was announced, I thought the Lenox acquisition sounded like an interesting move for the company. Department 56's operations looked lean; the operations at Lenox did not. Furthermore, the price paid for Lenox didn't look unreasonable, especially when compared to the kinds of prices many public companies have often paid to make such large ("transformational") acquisitions. 

In September 2005, Department 56 acquired Lenox in a $204 million deal (including $7.6 million in transaction costs). Department 56 funded the acquisition "through a $275 million senior secured credit facility consisting of a $175 million revolving credit facility and a $100 million term loan". 

As mentioned earlier, the combined company adopted the more recognizable Lenox name. 

Restructuring

As a result of the merger, the company closed approximately half of the stores belonging to its new Lenox subsidiary. In total, the company closed 31 Lenox retail stores. As of February 1st, 2006, this left the company with only 36 retail stores. Six stores were operated under the Department 56 name; the remaining 30 stores were operated under the Lenox name. 

After the merger, the company consolidated some of its operations. For instance, Lenox sold its Langhorne, Pennsylvannia facility when it moved certain operations to Bristol, Pennsylvannia. The company has used the cash proceeds of such sales to pay down debt incurred in the Lenox acquisition.

New Concept Stores

Lenox plans to launch a new mall-based chain of stores that will sell all of the company's brands (Department 56, Lenox, Gorham, and Dansk). The company plans to open three "All The Hoopla" stores during 2006. A fourth store will be opened in 2007.

Opportunities

The combination of Department 56 and Lenox presents several interesting opportunities. Perhaps most importantly, there's the hope that Lenox will become a leaner operation. Aside from any cost-savings made possible by the merger, there is also the simple fact that Department 56 was always a leaner operation than Lenox, and that the management at the new company might be more adept (or more determined) to keep costs down. 

There is also some promise to the idea of selling all of the company's brands together. To a large extent, the distribution channels are similar. The "All The Hoopla" concept proves the company is committed to this bundling of its products. However, it's hard to see how the company's products are going to be much of a draw on their own. Is there really enough demand for these Lenox operated retail stores? The company's current plans call for a very limited launch. So, the price of failure would not be very great. Obviously, a success here would greatly benefit the company in the long run.

Conclusion

Lenox is an interesting opportunity. The business looks very cheap based on averages of past sales, EBIT, pre-tax earnings, etc. However, Lenox is now an entirely different company. The old Department 56 business faces rapidly declining sales. Neither Lenox nor Department 56 looked like a very promising business at the time of the merger. Today, they don't look a whole lot more promising together.

On the other hand, it's important to look past the company's recent results (which include a large write-off). It will take time to see the full effects of the merger. At present, it's difficult to judge either company independently, because of the acquisition.

Still, this is clearly a cheap business by most measures. There are problems at Lenox (as there were problems at Department 56). But, if the business can be run right, it should reward shareholders who buy at today's extraordinarily low levels. 

Morgan's letter presents both the hope that there will be change and the realization that such change will not be easy. Clearly, the company's past performance has been unacceptable. The stock has never been as cheap as it is today; but, the problems have been just as bad. 

Lenox offers an interesting opportunity for patient investors. Nonetheless, being a Lenox shareholder is certain to frustrate you even if it does eventually reward you.

How To Take Your Online Stock Trading To The Next Level and Explode Your Income!

 

It's no secret. You can make money with by stock trading. But, you have to know what you are doing. You cannot just throw money at it and expect to get a ton of money out.

What you need is someone to teach you the ropes if you want to survive in today's financial markets. But where do you look for such training. Welcome the internet. The internet as we all well know is a great information tool. But did you know that it is also a great training tool? That's right. With all of this information comes training of all sorts.

But you have to know who to get that training from. Just picking any old course will not do. What you want is only the best training that you can get. Somewhere you can achieve all of your financial goals and take them to the next level. One such person is a man by the name of Steven Pierce. Steven's humble beginnings started as a trader who took things to the next level and now he has a series of books and videos where you can learn all of his secrets and how he makes over $30.000 a month, all from his home.

Another person you can learn from is a man by the name of Ken Calhoun. Ken is another trader who got his start on the internet with his day trading university website. Ken's website provides exceptional content and he also offers a free trial to his online trading room.

No matter what goals you have for your stock trading, you can defiantly learn form either one of these gurus. Both of them provide information that almost any level stock trader can benefit from. Another thing you can do is head on over to Google and to a search for stock market training or stock trading training. If there is a specific aspect of trading that you want to learn about, then just type in that keyword also.

You should see a whole list of websites that come up. Just be sure to go past the first search results page so you give yourself the chance to really find what it is you are looking for. Another thing you may want to try is the other search engines like yahoo and msn, as each will give you different results.

As you can see the internet is one of the best places to start your search for learning about trading stocks. Just imagine for a second if we did not have the information super highway that we have today. You see the internet is a place that is producing millionaires in record time in many fields. The reason is, knowledge is power. The more you know the more you can gain.

But the one last caveat to that is action. Once you learn something you must take action and massive action. You cannot just read something and do nothing and expect to gain from it.

Just make sure once you learn something to have am action plan. A sort of system if you will. Doing this will make the information make more sense and you will be far more likely to make things happen when you start stock trading.

Retirement - Investing for Retirement

Retirement may be a long way off for you , or it might be right around the corner. No matter how near or far it is, you've absolutely got to start saving for it now. 

However, saving for retirement isn't what it used to be with the increase in cost of living and the instability of social security. You have to invest for your retirement, as opposed to saving for it!

Let's start by taking a look at the retirement plan offered by your company. Once upon a time, these plans were quite sound. 

However, after the Enron upset and all that followed, people aren't as secure in their company retirement plans anymore. If you choose not to invest in your company's retirement plan, you do have other options.

First, you can invest in stocks, bonds, mutual funds, certificates of deposit, and money market accounts. You do not have to state to anybody that the returns on these investments are to be used for retirement. Just simply let your money grow overtime, and when certain investments reach their maturity, reinvest them and continue to let your money grow. 

You can also open an Individual Retirement Account (IRA). IRA's are quite popular because the money is not taxed until you withdraw the funds. You may also be able to deduct your IRA contributions from the taxes that you owe. An IRA can be opened at most banks. 

A ROTH IRA is a newer type of retirement account. With a Roth, you pay taxes on the money that you are investing in your account, but when you cash out, no federal taxes are owed. Roth IRA's can also be opened at a financial institution.

Another popular type of retirement account is the 401(k). 401(k's) are typically offered through employers, but you may be able to open a 401(k) on your own. You should speak with a financial planner or accountant to help you with this. 

The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan.

Whichever retirement investment you choose, just make sure you choose one! Again, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! Take care of your financial future by investing in it today.

Stock Trading - How to Know When to Sell Your Stocks

While quite a bit of time and research goes into selecting stocks, it is often hard to know when to pull out, especially for first time investors. 

The good news is that if you have chosen your stocks carefully, you won't need to pull out for a very long time, such as when you are ready to retire. But there are specific instances when you will need to sell your stocks before you have reached your financial goals.

You may think that the time to sell is when the stock value is about to drop, and you may even be advised by your broker to do this. But this isn't necessarily the right course of action.

Stocks go up and down all the time, depending on the economy; and of course the economy depends on the stock market as well. 

This is why it is so hard to determine whether you should sell your stock or not. Stocks go down, but they also tend to go back up.

You have to do more research, and you have to keep up with the stability of the companies that you invest in. Changes in corporations have a profound impact on the value of the stock. For instance, a new CEO can affect the value of stock. 

A plummet in the industry can affect a stock. Many things, all combined, affect the value of stock. But there are really only three good reasons to sell a stock.

The first reason is having reached your financial goals. Once you've reached retirement, you may wish to sell your stocks and put your money in safer financial vehicles, such as a savings account.

This is a common practice for those who have invested for the purpose of financing their retirement. The second reason to sell a stock is if there are major changes in the business you are investing in that cause, or will cause, the value of the stock to drop, with little or no possibility of the value rising again. Ideally, you would sell your stock in this situation before the value starts to drop. 

If the value of the stock spikes, this is the third reason you may want to sell. If your stock is valued at $100 per share today, but drastically rises to $200 per share next week, it is a great time to sell, especially if the outlook is that the value will drop back down to $100 per share soon. You would sell when the stock was worth $200 per share.

As a beginner, you definitely want to consult with a broker or a financial advisor before buying or selling stocks. 

They will work with you to help you make the right decisions to reach your financial goals in reference to your specific needs. This i very important to do before conducting any buying or selling, or any decisions for that matter regarding investing or money.

Unraveling The Stock Market Puzzle

 

I have been hunting around for the best places to invest my money for some years now. You see, I'm not an impulsive person. If anything, I am a little bit obsessive compulsive. I'm moreover a PhD. level student of mathematics. As such, I am interested in the mathematical reasons that underlie investment decisions. I'm also as interested in the mathematical basis behind stock market trends as I am with actually making money from them. Don't get me wrong, once I figure out what the best investments actually are, even if that means high risk stocks and shares, I will go out and make a killing. So it's not that I'm not that interested in making money, it is just that I have this innate desire to discover the underpinnings of the financial products that I am looking at, before I choose to invest in them. It's just the way my mind functions.

For sure, there is no one best spot to invest forever, however there are several reasonable ones. The finest place to invest your money depends on what you're aiming to do. You may perhaps invest in stocks for a variety of assorted reasons. And, if you do happen to get a hot tip, it might even be very sensible to invest in stocks. Though, I ought to point out that if you received some of those email hot tips that appear in a spam-like way in your inbox, just ignore them. The people who've sent them have only bought that stock themselves and are trying to get others to buy it too, after them, so that the share price rises and they can make a quick buck.

Anyway, what few people understand regarding the stock market is that the win-it-all or lose-it-all phenomenon is much rarer than the media makes it seem. Most people who invest in the stock market actually are fairly careful. They've usually placed a lot of cash into a stock, and are in it for the long term. They don't want to be reckless with their futures, so they make conservative investments.

My investigation of where are best places to invest demands me to come up with a definition of what "best" actually means. Since I'm a mathematician, I undertake to define it mathematically. The top spots to invest must possess a mishmash of characteristics. They must provide an investment opportunity that is money-making but, at the same time, as safe as possible. Usually, these attributes work in opposition.

For example, day trading on the stock market is extremely profitable if done right, but also really dangerous. Investing in land, on the other hand, may perhaps take a great deal longer to turn a profit however it tends to be much less risky. Hence, the overall best places to invest are a bit difficult to find. It is hard to find something that combines all of the favorable ingredients equally.

The most important thing to figure out is that the best spots to invest actually change from day to day. One week, the securities market may be in top condition. The next week, it might be the real-estate market. The finest places to invest money in the short-term change weekly, sometimes daily. And even the value of long term investments is subject to frequent change. It has to be said that if you want to invest your money wisely, you really need to do your homework.

Which Stock to Buy?

Before we need to know which stock to buy, we need to know the fundamental of an individual companies and how they perform in terms of revenue, profits, assets, and borrowing.

It is important to know about all these as the company's share price is ultimately the market's reflection of how valuable that company is. If a company is making profits and these profits are growing year on year, with borrowings contained to low levels and revenues also growing, then is an ideal company to invest in, provided we expect the company to continue growing at such levels. 

Well, by looking at the fundamental of an individual company, a lot people fails to adopt either investing in a fundamentally strong company but doing so in a bad overall market or investing in a great company in a bad market sector. 

By researching of all the information, you can use the method that I find which can give you a good stock selection on any stock and industry you like, but if you want a top-performing stock and the best chance of the stock going up you can screen for it.

Personally, I like to use MSN Money's screener. Only change the boxes that I refer and leave the rest the way they are.

1. First of all, we need to pick an industry that is currently hot. If you do not know any or do not want to do the research, just select "all industries".

To pick a 'hot' industry. Log in to www.prophet.net. At the top bar, click on 'EXPLORE' and select the sub category 'industry ranking'. Pick only the top 1-20 industries I recommend a 1 year time frame.,

2. The market capitalization can be 'small', 'medium', or 'large' which depends on what the market is favoring at the moment. I prefer to use 'small' to 'medium' but this also increases volatility.

3. 'Net Profit Margin' selected 'as high as possible'

4. '12 month relative strength' should be 'as high as possible'

5. 'Debt to Equity Ratio' should be 'as low as possible'

6. 'Revenue Growth Year vs. Year' should be 'as high as possible'

7. Optional: 'Average Daily Volume' over last 2 weeks should be 'as high as possible'

Any of the other features that I did not mention should NOT be used. You will now have a list of potential candidates to watch more closely and possibly trade. 

Pick a stock that have 25% or more in the growth column and over 80 in the relative strength column.

This is the best step-by-step way so far I discover of choosing which stock to buy by using the available FREE tool in the Internet easily.

Forex Trading: Getting Started

 

It is not so easy to get started with the forex trading business for a beginner especially when one is a retailer. But, there are several avenues that one can explore which introduce the beginner systematically to get started with forex trading. I will deal with this article with the beginner in the mind.

Look Around For Information First

Internet is replete with information on forex trading. There are dedicated websites for just information and educating the investors. One such website of repute is http://www.investopedia.com/. Apart from offering a flood of information and tutorial these websites let you work on their simulated mock trading sessions where you get a feel of real like situations. For this you will be required to open a free demo trading account with them. Another similar website is http://www.forex.com/. 

But one can not discount the offline source of information. Books journals and workshops conducted by the industry associations all are more than useful to begin with. Workshops/seminars will be for both beginners and advanced investors. Look around for announcements before you enroll with them.

Studying the Pulse of Forex Market

Really the essence of learning in the seminars and workshops is to know the process of market prediction through fundamental and technical analysis. Fundamental analysis basically deals with the macro economic background of a currency and its liquidity so has more to do with the economic health and trading turnovers of that currency with a long term perspective. Technical analysis is although a reflection of fundamentals, deals more with the market behavior at large. The market behavior of currencies, just like equities, reacts to fundamentals but not as quickly as to the investor sentiments. Thus there are different sets of indicators for each of these. While technical analysis relies more on computerized statistical charts fundamentals depend on the economic milestones and policies of that economy.

Demo or mock trading experiences expose you to the heat of fast paced decision making process. This, you will appreciate before you actually put in your stake to risk. When you actually open an account with a forex broker, you will get access to their softwares, either standalone or internet based, through which you can analyze and trade in real time.

A Word of Advice

If you are a fresher, it would be prudent of you to have slower and smaller exposure till such times when you are comfortable with market predictions even for intraday calls. Another point is not to go for shorts unless you are truly confident of your decision. How long it takes to become a seasoned forex trader? It depends on the background and exposure of the individual and as such there is no standard.

Brokers and Online Trading: What Does A Broker Do?

Forex broking is invariably an online business in the same manner as trading is much unlike the very early years. Different countries have norms that require forex brokers to register with some governmental agency to begin their broking business upon meeting certain educational and business qualification.

In the United States of America a forex trader must be registered with the Commodity Trading Commission as a Futures Commission Merchant. Futures Commission Merchant, FCM, can be an organization or an individual that accepts and handles futures orders on behalf of clients.

There are over 5000 forex broking institutions which include banks, financial institutions and certain other broking houses which all provide internet based trading facility. The forex brokers do not operate on the commission basis but on what is known as the spread in the community parlance. Spread means the difference amount between the buying and selling price of any currency. 

A forex broker, like a stock broker advises the clients on different strategies of trading in foreign currencies along side giving out tips on the hot currencies based on technical analyses and fundamental researches aimed at maximizing the clients' trading performances. The more seasoned and reputable forex broking houses offer to manage small investors' trades to reduce exposure to risks with their extensive knowledge and years of experience, of course for an additional fee.

Usually forex brokers facilitate a practice account for no upfront fee payment so that a new trader can gain insights of the market and the features of such trading softwares. Retail investors may, in order that they evaluate different supports and software features, try out practice accounts with a few brokers before they open a final trading account.

Most of the forex broking houses, including the individual brokers, provide what is known as leveraged account facility. The leveraged account means if you paid a deposit amount of, say, US$100 you will get to trade upto an exposure of US$100,000. You may also try out a mini-account which lets you to open and operate forex trading for as low as US$100.

Forex brokers are classified as

1. Market Operators -Large banks, minimum lot size is $1,000,000

2. Small Brokers - Cater mainly to individual traders and settle deals with market makers.

3. Market Makers - Let small brokers and individuals trade with thereabouts of $50,000

4. Kitchens - Scrupulous operators who thrive on the belief that most of the clients lose money and that the revenue of kitchen is the clients' losses.

Keep in mind, choosing forex brokers is to pay highest importance to your needs than theirs.

Common Questions Asked In Forex Trading

It is not entirely surprising to know that the biggest financial market of this planet is at large an unfamiliar terrain to a relatively large mass of investors and traders given the fact that the access was some what difficult till the advent of internet lately. The other real fact is that the forex market was the domain of large banks and hedge funds that operated secretively enough which kept the masses at a distance. To this end, there are several fundamental questions that remained unanswered, from the point of view of both novices and the not so new traders and the investors alike.

Is The Forex Market Different From Other Markets?

Yes it is. The fundamental difference is that the forex market is not regulated by any centralized body as it is a world wide exchange market. Neither there are any clearing houses nor there are panels set up for arbitration dispute settlement. So how does the business go on? One has to go by trust and the metaphorical handshakes only.

The Advantage of Liquidity on Your Side

The biggest market in the world trades 24 hours a day and 5 days a week. The sheer size of it and the scope which extends from Asia to Europe to Americas is enough to make it the most accessible one in this world. The size of daily trade is over US$3 billion.

There Is No Commission Part in Forex Trading

A small surprise this. But this is not without a reason. Much unlike the stock or futures markets, where the brokers charge a commission for acting on your behalf as agents to buy and sell, the facilitators here are dealers who trade in principles and bear risk against investors' trades while making money through the currency market spread.

Prices are quoted in 'percentage of point'. This means all prices are quoted till the 4th decimal point which equals 1/100th portion of 1%. For example 1 Euro in INR = 59.1463 unlike in the normal everyday markets where prices are quoted upto 2 decimal points only. But this is not true of Japanese Yen.

What Do You Mean By Carry System?

Carry is pretty popular kind of trade with all and sundry which helps to pocket the inter currency interest differences apart from the capital appreciation in case of long position. This works fine when you finance your long position acquisition through low interest currency.

Warning Signals in Forex Trading

Use of softwares, charting tools might have made trading in forex simpler than ever before. But there is always an element of risk that one increasingly tends to ignore the warning signals the charting tools give out some times crying for attention. If you are alert you can pick-up a signal from literally any chart or an indicator regardless of whether your software is online or desktop application.

In the following paragraphs let us discuss some critical warning signals and ways to pick them up as and when they show.

Overbought Condition

This is a very important warning signal in a trading condition, if not in delivery buyouts. There are a number of ways and indicators that you may look for this signal from. The most common of them is the RSI or the relative Strength Index, William %R or when MACD falls below the signal line. When RSI and W%R are at 20% on the lower side and 80% on the other or beyond these values exit short and long positions.

52 Week High and 52 Week Low

In most of the cases currency prices often fail to breach its own 52 week crest or trough. Not exiting from long positions near the 52 week high peak or from short position near 52 week low could be a fatal mistake unless you have seen other strong fundamental parameter working in the currencies' favor. The 52 week range theory holds well because as a currency nears its peak or bottom the currency will be either over bought or over sold and at the same time market sentiment weakens thus reversing the trend.

Rate of Change- ROC

The ROC oscillator plots the difference in prices between the current and x days ago. This x number is usually taken as 10 days which gives good signals. As the price rises ROC too rises and when it falls ROC falls too. ROC is plotted across a mean (zero) line and higher or lower the values greater are the chances for the prices to have been over bought or sold and a steep reversal in its trend.

Stochastic

Stochastic oscillator gives signals of warning in many ways: Close short positions when the oscillators are near or below 20% and long positions near or above 80%. But this is pretty simplistic approach, so a forex trader needs to look for price-oscillator divergence also which when occur indicate a strong trend reversal.

Fundamental Changes

Natural calamities, war, governmental policy changes etc render economies weakened and currencies take a jolt as a result.

There are many more warning signals for the taking and a seasoned forex trader will always look for them before she or he enters into a position.

Online Forex Trading Platforms and Practice Accounts

Online forex trading platforms are nothing but small software clients which could be either downloaded to the desktop or online client which doesn't require you to download. These forex trading platforms are secure if you purchased it from reputed sources and are seamless in their connectivity speed and operation.

Let's take a look at some of the popular platforms that are available, although each broker has his own custom software which is given to the traders use.

1. Meta trader for desk top computer and Meta trader for mobile. There are several versions of this client.

2. The next popular platform for online forex trading is Forex trader.

Both the above platforms and several others, whose names didn't figure here, claim that their platforms are stable and secure and feed in real time data apart from providing countless number of analytical tools and with an up time connectivity promise of 99.99%. Well, they almost mean what they say. (This article is not a product review.)

Key Features of Online Forex Trading Platforms

The online trading clients offer a host of features which are truly essential for a trader. Some of them are listed out here.

1. Real time price display for quite a few currency pairs

2. Bundled in charting kit (some advanced versions allow customization) integrated into the main platform for making technical analysis and decision making.

3. Place and execute market orders by filling a simple form

4. Choice of a number of order types. This is useful to execute the strategical orders and minimization of risk.

5. Some platforms provided by reputable and long standing companies give access to their proprietary research reports for your reference.

6. You can maintain an order book and monitor profit & loss, set open position alerts etc.

7. Seamless connectivity to multiple brokerages without clashing complications.

Currencies tend to trend more and fluctuate less violently unlike stocks which behave pretty much the different way. The reason for this is not hard to understand. Currencies trend depending on the countries. foreign and economic policies which are macro economic in nature and the currency pairs take fairly long enough time to react to any change in policies. Where as stock movements are more or less determined by microeconomic factors and market sentiments.

Practice Accounts

Why do you need a practice account in the first place? The straight answer is till you are confident you are insulated from market risks as you play with fake money. Brokers offer free practice account in the hope of winning your trust and eventually a trading account. Many brokers don't extend your practice account once they expired. If you feel you need more practice, you can look around for another broker for a new practice account sign up.

The online forex trading platform the brokers provide with practice accounts usually expire with the account.

Forex Major Players and Forex Brokers

Where the big money is, there is the abode for all major players. And forex is a very special place to be if that adage is true. It is no surprise that you will find all the big names of financial market of this world in the forex trading nodal positions. They are the key market players or the market participants, as the jargon goes.

Levels in Market Participants

We have bank to bank trading at the top of the strata and the participating banks are the large investment banks. The access to this level is hardly available to those not in the same circle. These bank to bank transactions are within the slender margin- called the spread- which is the difference between buy and sell price. The spread widens as we go down the level but here it is truly as sharp as the razor's edge.

Several funds, including pension funds, insurance funds etc take part in the forex market in a big way with huge volumes for small spreads.

Banks generally trade for their own account out of their own reserves. And this amounts to several billions of dollars everyday. They also let their trading account holders to trade along on speculative basis but this accounts for small a percentage in their scale of operations.

An important part in the foreign exchange market is played by corporations that want foreign currencies to make payments for their overseas service or goods transactions. In a way this is the essence and reason for the whole forex market to exist. Fundamentally, since, this is not speculative trading of currencies the companies' forex trading hardly has any effect on the short term prices and so can be treated as a trend as to which direction the market is moving for a given currency.

When forex markets fluctuate violently, even for a short term, the national central banks enter the market in a regulatory position. With the might of substantial forex reserves to either infuse or diffuse inflation or artificial demands, they try to control the money supply. More often than not, the rumors that central banks are entering the markets act positively to stabilize the fluctuations, let alone enter in actual place.

There are large number of middle level players such as investment management funds, hedge funds etc which act on behalf of their clients. This is largely for their or their clients' payment necessities overseas for the equities or similar investments. Like the payment based trading in the case of corporations, this doesn't count up as speculative trading and will not impact the short term speculative market.

We see retail forex broker and day traders in the last who really account for considerable volume sheer by their numbers.

Unique Characteristics of Forex Market

Give a thought to this: what makes the forex market so unique that none other like equities, commodities or even the bond market can match either individually or all put together? I think everyone who wishes to have a share worth his or her salt of action in the forex market needs to know this.

The Unique Characteristics of Forex Market

Forex market allows trading in all major world currencies seamlessly. US Dollar, Euro, Japanese Yen and Great Britain Pounds are the few currencies that account for over 80% of the daily forex trade. Now let's see what other features attribute to make this so unique.

1. There is no single exchange market for trading foreign currencies yet all of them are so closely connected to each other ('over the counter' trading) that the differences in values can hardly be considerable, at least, for a retail trader.

2. There is no commission involved in the foreign exchange trading although there is low transaction costs involved. One reason for this feature is you are trading currencies and not negotiable instruments which are always virtual in nature at the point of trade time.

3. Forex market has a continuous nature. Global time zones and universal nature of currencies have facilitated the continuous nature of this. When markets in Asia close European markets open and when they close there is American market to take over. The next cycle begins with the Asian markets taking over from American markets.

4. Largest daily turnover- over US Dollar 3 billion which is ten times bigger than turnovers for all equity exchange markets put together.

Ponder the point number one again; London, New York and Tokyo are the top trading markets with many smaller markets and countless banks and operators functioning across the globe in relativity and interconnection to these big three. Thanks to the continuous nature and 'over the counter' trading facilitates quick decision making for traders without waiting for the markets to open the next day.

'Over the counter' trading also brings in the benefit of arbitrage (overnight differential interest) since there is no single dollar rate over the world depending on significantly great number of factors that affect the local Dollar demand and the local economy. Beginners need to understand the mechanics of economy that play roles here. These factors include the GDP, budget, trade deficits, rate of interests and inflation amongst other macro economic issues.

An interesting piece of information: regardless of trends, US Dollar is involved in about 90% of transactions.

Making Sense Of Currency Differences

Most of us who have not heard of clich situation that any corporation involved in foreign trade in a big way incurring huge losses on account of currency differences can hardly make sense of such a situation. In this article, I will go about explaining the basics of differences in various currencies in no nonsense and no jargonized simple language.

Different currencies command different prices depending on their purchasing powers decided by market forces, to put it rather simplistically. In actual practice this is a significantly complicated situation and process like a country's economic progress and foreign trade will have major bearing on the instant price.

Now, for a demonstration, let us see how much a US Dollar can buy/value in Europe and particularly in UK. We know beforehand that 1 US Dollar trades around 0.5136 GBP. This means that for what costs 0.51 Pounds one has to pay a full US Dollar. In other words, you will get roughly 2 US Dollars for every GBP. But this difference continuously fluctuates by nature, sometimes trending upwards and sometimes the other way. This difference arises fundamentally out of economic disparities between the two countries in trading lock but not essentially so.

Let us see how such a situation can arise which leads to difference in the currencies. When European Union brought to force the Euro, initially its value was set on par with the US Dollar, essentially based on the assumption that the economic mights of both European Union and United States were on par so that the trading values match between themselves and individually with their trading partners the world over.

As time progressed, US went through several unexpected turn of events which lead to federal funding of their budgetary and trading deficits. Domestic inflation meant that Americans spend more for the same service and goods which was not the case with their European counterparts.

But the same id not good for Japanese Yen which was trading at around 200 per US Dollar some twenty years ago is currently valued at 120 yens. This can straightly be attributed to the rise of Japanese economy vis a vis the American Economy.

The early attempts in the mid 1940s through Bretton Woods Agreement to standardize forex values were using gold for exchange. This was by fixing the exchange value of gold at US$ 35 per ounce. But again as the market forces would have it, this could not sustain for long before it was repealed.

What this means to a forex trader is longer the holding greater is the exposure to risk.

Rollover in Forex Trading

The rollover is the arrangement of artificially postponing the actual delivery settlement of a currency in position by normally a day. In actual practice, ideally all traders are required to take or give delivery of the currency they bought or sold (settlement) on the second business day after the deal was closed. But the actual practice differs by way of artificially extending the settlement day. But this rollover differs in the forex trading parlance fom that of stock trading.

It can be fairly well assumed that most of the forex trading accounts are leveraged with the broker having extended the trader a loan for the day which is the exposure limit. At the closing every day theoretical closing; though- at 21:59 London time, traders need to close their position unless they actually want to take or give delivery of their positional currency. But due to the loan leverage the traders account will not be having that kind of capital that enables him to take delivery of the currency. 

Brokers have a stated policy of closing all accounts at that precise time and almost instantaneously open a new account for the quantity of that currency pair at the corresponding rate. This means although the account has been closed theoretically, the positions are still open from the traders' perspective. This effectively means hat he traders do not have to take or give delivery nor do they have to payback the loan extended to them. 

Broker, on the other hand charges an overnight interest for the amount rolled over. How is the differential interest calculated by the broker? Assume that you have a 1 lot position of euro/dollar with euro being your long position. If during the trading day the dollar appreciates by 25 pips and the broker rolled over your position to the next trading day at the close with dollar having further appreciated by another pip overnight, this 1 pip is the difference in interest between the two currencies. So you pay this 1 pip premium to the broker.

On the other hand if you were short on euro and long on dollars you would gain that differential interest amount. To put things in perspective, if you bought a currency and it gained overnight you are to benefit by that incremental differential and if the reverse were to happen, you have to pay this to the broker.

In actual practice, all rollovers and overnight interests are automatically calculated and credited or debited to your account by the broker. For tax purposes, IRS treats the interest gained or paid separately.

Forex Market Size And Liquidity

Think of a market which does a daily turnover of around US$ 3billion on an average on a sustained basis having a liquidity crunch. This statement can be sort of a click for the novice but weaker volumes doing high values render the forex market to reverse trend sooner than later but for the moment will be suspect to absorb all ask deals. A trader will get stuck up here and will incur losses.

The above scenario is a strange one despite having a great price run but normal cases do differ and both the entities, market size and liquidity, do work complementing each other. In a way the enormous size of the market can be attributed to the high volume turnouts. It is this high volume that sees all deals execute completely without slippage. If not for the 24 hour trade the market would have suffered huge losses considering the enormous size.

Some Forex Market Statistics

Let us see some statistics that pertain to the market size. Forex market did a daily average turn over of US$1,770 billions as of 2004 which crossed $2,000 the very next year. This figure does not count the global trades which accounts for another $829 billions. The global forex market does another $1.26 trillion turnover in forex derivatives and close to a trillion dollars in swaps. This is ten folds greater the size of the total turnover on all the equity markets of this world put together.

The trading value and size is also increasing at a breakneck speed. It jumped 38% between April 2005 and April 2006 and has swelled 100% since 2001. The top 10 forex centers do a total of 73% of the trading volume and of which, the most prominent one, London accounts for 31.3% overall.

If this is one side of the story, you have large market players on the other. Deutsche Bank garners a mind boggling turnover of about 17%, while UBS and Citi Group account for another 20% of the daily turnover. These figures include all types of orders and clients including different national central banks which are not there for business purposes.

What Does This Mean To The Retail Trader?

Larger market participants work on spread (difference amount between ask and bid price). Although the volumes are quite huge they are mostly in electronic figures which can be carried forward to next settlement cycles absorbing losses.

A retailer can take comfort that s/he will not get stuck-up so easily unless one is not prepared to book a marginal loss.

How Does Forex Market Differ From Other Markets

To novices the difference may appear to be great between the forex market and other markets, say equity market. But this is not to suggest that they are similar. Not many of the experienced traders have dared to crossover the boundaries of their trusted market domains unless they made sufficient preparations and studied the new market.

Forex Market Has Unique Characteristics despite Similarities, Before we discussed the similarities let's see how the forex market differs from stock markets. So here are the differences.

1. The forex market is a 24 hours trading market unlike stock market and is not country specific. Major markets open at Tokyo and when it closes, London takes over and then the New York market goes live till the next day when Tokyo market opens again. This seamless continuity isn't available in case of stock trading.

2. The above point also characterizes that the concept of single exchange trading as nullified and what takes its position is over-the-counter trading.

3. The equity market is the market of countless number of equities that are governed by a number of technical and micro economic parameters and indices which are all absent in forex market.

4. Forex market is the biggest exchange market in the world and not even the transactions of the entire world's equity markets' put together can match this even by half. So liquidity is never a question mark.

5. There are no commissions to be paid to the brokers for the simple reason that you are directly dealing in currency and not the securities or bonds which are negotiable instruments and thus have a weakness to fluctuate sharply.

6. Currencies can depreciate over long periods but can never be zero; this is a highly unthinkable scenario in forex market and traders can hold their short positions for as long as they possibly can without the fear of getting their capital wiped out.

Similarities in the Markets

Despite all these differences, both markets have some semblance and similarities too. But the similarities are not sufficiently significant, as I said in the beginning, so as to facilitate a walkover across the markets. Let us take a look at the similarities now.

1. The long term trading strategies are same as both require strong fundamental analyses of the stock or the currency pair in question.

2. The concepts of settlements and rollovers are similar.

3. Technical trading parameters are same.

It makes sense for anyone wishing to crossover the markets to gain deeper insights.

Stock Trading Strategies - Learn These Simple Yet Highly Profitable Strategies For Trading Stocks

Stock trading is carried out by stock traders who for the most part need an intermediate such as a brokerage firm or bank to carry out the trades. Stock traders work for themselves by investing money in shares which they believe will increase in value over time and then sell the shares at a later date for profit. 

There are a number of strategies used by stock traders in order to accumulate profit. The most popular stock trading strategies are day trading, swing trading, value investing and growth trading. A brief description of each of these strategies will now be given

* Day trading is a form of trading in which stocks are sold and bought during a single day so that at the end of the day there is no change in the number of shares held. This is done by selling a share each time another share of equivalent value is bought. The profit or loss comes from the difference between the sale price and the purchasing price of the share. The motivation behind day trading is to avoid any overnight shocks that might occur on stock markets. All stocks are held for a very short time period

* Swing traders hold stocks over a medium time period, say a couple of days or 1 or 2 weeks. Swing traders usually trade with stocks that are actively traded. These stocks swing between a very general high and low extreme. Swing traders must therefore purchase stocks at the low end of their value and then sell the shares when they swing back up.

* Value investing is a method of stock trading in which traders purchase shares in a company which they consider to have under-priced shares. The hope is that by investing in the company the shares will eventually increase in value. 

* Growth investing is a method of investing in companies that are showing signs of above average growth. The share price may be more expensive than what it would be expected to be however the view of the trader is that the share value will grow into what it has been purchased for.

Stock trading does come at a cost however. The high levels of risk and uncertainty as well as the complex nature of stock trading is enough to deter most people from becoming stock traders. There is also the brokerage fee charged by the bank or the brokerage firm every time a transaction is carried out. However all this aside there is still a considerable chance of getting lucky as a stock trader which is enough to supply the stock trading industry for the foreseeable future. 

Stock Trading Strategies - Do You Know These Simple Yet Highly Profitable Strategies For Trading Stocks?

Stock trading is carried out by stock traders who for the most part need an intermediate such as a brokerage firm or bank to carry out the trades. Stock traders work for themselves by investing money in shares which they believe will increase in value over time and then sell the shares at a later date for profit. 

There are a number of strategies used by stock traders in order to accumulate profit. The most popular stock trading strategies are day trading, swing trading, value investing and growth trading. A brief description of each of these strategies will now be given

* Day trading is a form of trading in which stocks are sold and bought during a single day so that at the end of the day there is no change in the number of shares held. This is done by selling a share each time another share of equivalent value is bought. The profit or loss comes from the difference between the sale price and the purchasing price of the share. The motivation behind day trading is to avoid any overnight shocks that might occur on stock markets. All stocks are held for a very short time period

* Swing traders hold stocks over a medium time period, say a couple of days or 1 or 2 weeks. Swing traders usually trade with stocks that are actively traded. These stocks swing between a very general high and low extreme. Swing traders must therefore purchase stocks at the low end of their value and then sell the shares when they swing back up.

* Value investing is a method of stock trading in which traders purchase shares in a company which they consider to have under-priced shares. The hope is that by investing in the company the shares will eventually increase in value. 

* Growth investing is a method of investing in companies that are showing signs of above average growth. The share price may be more expensive than what it would be expected to be however the view of the trader is that the share value will grow into what it has been purchased for.

Stock trading does come at a cost however. The high levels of risk and uncertainty as well as the complex nature of stock trading is enough to deter most people from becoming stock traders. There is also the brokerage fee charged by the bank or the brokerage firm every time a transaction is carried out. 

However all this aside there is still a considerable chance of getting lucky as a stock trader which is enough to supply the stock trading industry for the foreseeable future.

Day Trading Basics - Day Trading For Beginner Investors

Day trading is an extremely risky way of investing in the stock market. Day trading is carried out by day traders who rapidly purchase and sell stocks over a single day period in the hope that for the very short period over which they hold the stocks (ranging from just a few seconds to a couple of hours) the value will continue to climb or fall thus allowing day traders to secure quick profits.

The method of buying and selling stocks over a very short time period can create huge profits or losses for the day trader in just a couple of minutes or hours. Statistics show that 80-90% of all day traders make a loss at the end of each trading day. However day trading has become an increasing popular form of trading in recent years as a result of the internet and increased access to information. So while day trading used to be a marginal form of stock trading reserved for the most part to financial firms professional traders and an elite group of private investors it is now also very common method of trading among casual traders. 

Day traders are defined as traders who place four or more round-trip orders over a five day time period and the total trading activity over a day is 6% or more of the total value of all shares held. 

Brokerage fees for day traders can be substantially lower than fees for other types of traders. While margins for most traders are usually around 50% of the value in traders account, day traders can face levels as low as 25%. This means that a trader can by lets say, $1000 worth of stock from an account of only $250.

Tips for success

The five most common strategies adopted by day traders who seek to make are profit are

* Trend following - used by all trading firms this strategy assumes that stocks that having been rising steadily will continue to rise.

* Playing news - this strategy is to buy stock in a company which has just announced good news 

* Range Trading - this is where stock that has been rising and falling is bought near the low price and sold as it hits the high price range.

* Scalping - it is commonly defined as a very quick trade.

* Covering spreads - To play the spread or the make the spread simply means to buy stock at the Bid price and sell the stock at the Ask price. The difference between the bid price and the ask price is known as the spread. Because there is an historical tendency for the stock market to rise profit can be expected for this form of trading.

Understanding Stock Options- How Do Stock Options Work?

 

Stock options are an increasingly common phrase heard around the office floor but what are they? Basically, stock options give the employee the option of purchasing shares in the company they work for at a price set by the company employer. The stock options exists in both private and public companies and they are popular for a number of reasons.

* They are a good way of retaining current employees while also attracting new employees.

* They create a feeling of ownership of the company among workers 

* It is a good way for new companies to hold on to as much liquidity as possible while still paying its employees.

The price of the stock is usually set by the current market price of the stock when the worker is given the option of purchasing stocks. Stocks are usually held over a medium to long time period so the hope is that during this time period the value of the stock will increase thus enabling the stock holder to sell the stock at a later time period for a profit. This is a good supplement to the employee's salary as well as motivating the employee to work harder in order to improve company production and increased stock value.

The best way of understanding how this works is to use an example. Assume that a fictional company, say, the ALBA corporation gives its workers the option of purchasing 50 shares of stock in the company for $7 a share, and then sell the shares at a later date specified in the contract. This option can be exercised by the worker starting from the 15th June 2002. Suppose that on the 15th of June the value of the shares is actually at $10 a share. 

This leaves the employee with a number of options.

* The first option for the employee is to purchase the stock at $5 a share and then sell the shares on as soon as the specified time period in the contract is up at $10 a share. This leave the employee with a profit of $3 per share or $150 total profit on the 50 shares.

* Another option is to sell some of the shares after the specified time period and keep some to sell at a later date for potentially higher profits.

* The third and final option is to purchase the stock at the discounted price and hold on the it all in the hope of high future profit.

How To View Stock Market Formulas Professionally

A famous Wall Street story concerns a young man who was in the early stages of learning to be a professional speculator. He had a problem, so he went for advice to an elderly sage noted for his shrewd investment judgment. The fact was, the young man said, that he had taken on quite an extensive line of stocks, but the market looked high - maybe too high - he thought possibly his position carried with it too many risks, and wondered if he shouldn't perhaps sell. He was so worried about this, he said, that he couldn't sleep nights.

The old man's counsel was simple and direct: "Sell," he said. "Sell back to the sleeping point."

Although there is no doubt that this advice smacks of imprecision, there is a good bit of wisdom in it. We may fairly assume that neither the young man nor his adviser knew for sure which way the market was going, but both were aware that the market was sufficiently shaky to cause legitimate worry. Translated into somewhat more orthodox investment terms, the advice meant: "Sell enough of your stocks so that a market collapse won't destroy you, but keep enough so that if your fears turn out to be groundless, and the market rises, you'll still profit to some extent; in the meantime, get some sleep."

At first glance, it may seem cynical on the old man's part not to outline for his protege an exact and detailed course of action. But he could not honestly guarantee that he knew exactly what action might turn out to be best. Furthermore, the young man didn't want someone to tell him precisely what to do. All he wanted was some help in easing the pressure at a critical point, and the help he got seems eminently sensible.

In a real sense, the investment formulas are designed to help you in the same way that the old man's advice helped his young friend - they inject an element of caution in your investing when caution seems advisable, they reduce the provision for caution when risks seem relatively low, and permit you to benefit from rising prices for common stocks. Moreover, once you incorporate a formula into your investment program, it works more or less automatically, thus allowing you to sleep nights in the knowledge that you are continuously hedging against various possibilities.

But just as the investment sage left it up to the young man to decide exactly what the "sleeping point" might be in his particular case, you can select a formula appropriate to your own temperament, financial circumstances and proclivity to insomnia. As will be made clear in later pages of this book, any of the formulas can be adjusted to suit the needs and preferences of any investor.

Although formulas are designed to give unhedged and unambiguous indications for action, the investor should not feel that he is therefore giving up all personal control over his investments when he adopts a formula, since he selects it himself to fit his own requirements. A formula does not try to tell you what to do - it merely helps you do what you are already doing more profitably. 

For example, formulas cannot tell you which stocks to buy. This book assumes that anyone interested in formulas is already a relatively sophisticated investor and knows what kind of stocks he wants to buy, how to select them and where to go for advice in his particular areas of interest. But - by supplementing his knowledge of which securities with considerations of the equally important questions of when to own them and in what quantity - formulas can supply a valuable added dimension to his investment results and help put the management of his portfolio on a more professional level.

Learn How To Start Trading In The Stock Market

Trading in stocks has existed since the 12th century. It has come a long way from men sitting in barn yards trading in a small community, these days, however trading on the stock market has changed to an almost unrecognisable degree. 

Global stock markets not account for an estimated $23 trillion in money flows. Stock exchanges such as the NYSE, NASDAQ and the London Stock Exchange are all market places for trading stocks on. These markets facilitate the trading of stocks by bringing together buyers and sellers. 

Traders of stocks have many varied approaches to how they invest in the market. Some traders are risk loving and like to take large gambles when they invest in stocks. These types of traders who include day traders like to ride the wave of the minute to minute fluctuations in the value of stocks. 

This allows them to make a quick buck by constantly buying and selling stocks at a mind boggling pace. Although there is the chance of making a very quick buck this way this type of trading also runs the risk of making a massive loss. It is estimated that about 80-90% of all day traders make a loss on the stock market each day. 

However if like most people you feel you don't have the stomach or the time for minute to minute trading, there are other methods to investing in the market. For example value traders are a much more rationale, risk adverse type of trader. They try to avoid the minute to minute fluctuations of the stock market by ignoring all the announcements made by companies and just look at the average book price of the stocks over a longer term. 

Value traders search out companies they believe to be undervalued possibly because it just announced profit warnings and now which led to a dumping of shares from the company. This leaves the stock price below its average price. Value investors buy the shares at the depreciated price and then wait for them to go up in value again.

Trading on the stock market can take place in the traditional manner in which buyers and sellers come together on the stock market floor and stocks are auctioned off. Buyers and sellers act on behalf of clients who place order for stocks to be sold or bought. In recent years the traditional method has been combined with an electronic method in which orders can be placed over a network, or through the internet.