Forex Trading Strategies Every FX Trade Investor Should Know

Online currency trading takes place all over the world, throughout the day for five days a week. When online currency trading began, only institutional investors such as investment banks and hedge funds were able to trade. But as online trading expanded, individual investors and small currencies were allowed to participate in the forex markets. Investopedia defines forex market as “The largest and most liquid market in the world with an average trade value of $ 1.9 trillion a day and includes all of the currencies in the world”. Similar to other forms of investment, currency trading is about supply and demand, the spot market lets the investors to buy and sell foreign currencies at the current trading price, spot market is the largest currency market. Futures markets are another option which lets the investors to trade different currencies including the Swiss franc, British pound and Japanese Yen. 

The strength and weakness of global currency fluctuates continuously and the objective of currency trading is to anticipate a rise in a currency’s value in relation to other currencies, foreign exchange can also be used to minimize a loss in the value of funds that may occur due to inflation or other negative forces in the market. Currency fluctuates for many reasons, but supply and demand is the major force that drives global currency prices. If a currency becomes scarcer within a country or demand for a currency increases worldwide, the value of the currency will increase. Conversely, in a country where too much money is available and or there is little demand for the currency, the currency devalues.

Factors that contribute to the demand for a particular currency include the level of balance of payments and economic growth. Why trade Forex? The extreme volatility of forex markets makes it possible to make more money compared to other traditional equity investments; however, it is important to note that the same volatility could lead to huge losses. Other benefits of trading in foreign exchange are the relative low costs of trading compared to trading in stocks. How to Start Trading? Before starting to trade in the forex market, it is necessary to study foreign market and currencies using financial newsletters and researching on the internet, it is also advisable to seek professional guidance from a forex trading specialist. Watching the trading patterns of large banks that use advanced forex trading strategies would be of great help, these banks have a lot of money at risk hence they employ the best strategies. You can start trading with an undervalued foreign currency and taking into consideration your financial capabilities make a purchase, you have to wait till the rate of foreign currency you purchased equals to that of your own currency. Once the currencies are level or appreciate to a certain extent you can convert the currency back to your own currency for a profit. 

The forex market is unregulated and the lack of a central market makes currency trading an over the counter (OTC) transaction. Individuals, corporations, governments and other institutions have access to the foreign exchange market. Technical Indicators- Moving Average Converging Divergence Technical indicators help in the process of price prediction in foreign exchange trading, the Moving Average Converging Divergence (MACD) is one of the most reliable indicators, professional traders rely on this indicator. MACD is the difference of a 12 and a 26 exponential moving average, it subtracts the 26 period from the 12 period and the result will be displayed in a single line called the MACD main line. It also indicates if market is overbought or oversold, when it is overbought, it is riskier to go long and when it is oversold it is riskier to go short. A rising MACD indicates a rising price, when the two lines meet it is considered a neutral situation. Finally a decline below neutral indicates a short term declining trend.

10 Things Millionares Avoid Like Plague

Everyone admires millionaires and wants to get where they are, be like them or even do better. It is okay to do this but many a times people do not work towards acquiring wealth, but just procrastinates. Yes, there is that time you had a very brilliant idea that you thought it is actually a crazy one, but never did anything towards it. Only to see someone else implementing the same idea and succeeding in it.

The millionaire’s next door does a lot to get ahead. They make sacrifices, work smart and put in a lot of effort to get to where they are. I have interacted with several millionaires and actually worked for one, a self made millionaire who started from nothing. He reports to work every day at 6.00 am, yes when most of us are asleep or just waking up. I recall being told when he started the company he was the messenger, writer, receptionist, and manager e.t.c basically doing everything.

However many of us just admire their money not know what they have gone through to get there. Some have made mistakes and  failed but they do not remove their eyes from the goal.

Here are some of the things that millionaires do not do:

1. Think He Knows It All – People who think they know it all stop learning and thus become unaware of new opportunities. Once you lose awareness, you lose.

2. Use Time as a Measurement for Success – The millionaire next door measures success based on output quality, the results. The amount of time spent on something means nothing if the results do not meet the expectations.

3. Socialize with People Who Waste Money – The people you socialize with influence your habits. It is impossible to save money if you constantly hang around people who blow it all.

4. Desire Instant Gratification – You have to think long-term to attain long-term success. The millionaire next door desires long-term deferred compensation over instant gratification.

5. Waste Time on Senseless Activities – They say time is money. In actuality, time is far more important than money. Time is your life. If you waste it, you will fail.

6. Focus His Attention on Negative Obstacles – If you focus all your attention on negative obstacles, you will lose sight of the finish line. You can’t get there if you can’t see it.

7. Pay Retail for Name Brand Clothing – You can easily save hundreds of shillings a year on clothing purchases by waiting for sales or shopping at discount retailers. Better yet, avoid name brand clothing all together.

8. Replace What is Not Broken – The millionaire next door fixes things. Fixing something is usually significantly cheaper than buying a brand new replacement, especially if you fix it yourself.

9. Impulse Buy – Impulse buying wastes money and leads to a cluttered house full of “stuff” you don’t need or use. If you see something you like at the mall, walk away. Think on it for a day or two. If it still holds value in your mind, maybe it’s worth buying. Never buy something the first time you see it.

10. Rent – The millionaire next door has a long-term mindset. In the long-term, owning something is always more cost effective than renting it. The key is to purchase quality products for long-standing use.

Understanding Labour Laws in Your Job Dilemma: To Leave or Not

A reader wrote this to me recently and I thought it is wise to shed some professional light on it.

“I have just started my career in an upcoming organization – 6 months into it. My close working relationship with the management makes me feel like it is my second home. However, I’m a graduate Civil and Structural Engineer and working as a site supervisor (Foreman) doesn’t offer me much growth career wise.

I have just got an offer from one of my dream companies in the Structural Engineering / construction Industry. I’m to join the team as a trainee engineer with opportunity for growth.

My confusion is that I  need to give my current employer a one month notice and I still do not think he will let me go since I’m their key supervisor and have been assigned their mother project.

The pay in my new job offer is slightly higher (by 5,000) than what I’m getting now. But that is not what I’m looking for. If I terminate my job without the 1 month notice, I will be required to pay the company my one month salary, which I don’t have.

Kindly advice”

From your email, it’s clear you are not satisfied with your current job as it doesn’t give you much experience and it is not in your career line. Also your closeness to management which makes you feel like your work place is a second home seems to tie you to the job which you confess, doesn’t offer you much growth career wise.

It’s good you are in good terms with the management, but this should not prevent you from following your passion in a career where you will grow in your profession. Remember that in any job both the employer and the employee need to gain mutually and experience growth in terms of profits and skills.

If the opportunity does not afford you the ability to develop new, in-demand skills every year, it could be a dead-end job that will become increasingly difficult to leave as your skills become less and less marketable to other employers.

Additionally, you need to take charge of your career. Be informed that making accepting a new job offer is one of the most important career decisions that you can make in your life. Put your interest first and then your employer’s second. Don’t be blinded by your relationship with your employers, so let go the idea that s/he will not let you go.

The other company that gave you a job is your dream company according to what you say. So I want to believe this is a dream come true for you. Grab it!  You have nothing to lose, in any case only risk takers succeed in life; the higher the risk the greater the returns. You will be passionate in your work and not only gain professionally, but also get a better pay.

For Vacation Notice:  The labour laws provide an employer/employee shall give a month notice for any dismissal/ vacation failure to which you are  fined an equivalent of one month’s salary. However, the same laws provide that an employee can give two weeks’ notice in lieu. Meaning you can give a notice of two weeks to your employers who will then pay you half of your salary. You can take the second option.

Lastly, leave in good terms with your current employer. The world is very small and you never know where you might meet each other. Explain to the HR or whoever you report to about your notice until they understand you. Thank them for giving you the opportunity to work at the company and the skills you have gained while there. Remember your employer  may be asked for a recommendation letter and therefore he needs to put you in good light.

Also, let your new company know that you are working and need some time to clear with your current employer. Give them a time period when you can be done.

Remember you are the person to make final decision even if you are persuaded not to leave. Take charge of your Career! You are responsible for your own destiny!

Good luck.

The Five Simple Steps to Significant Savings

We all know that we should be putting aside an amount of money each month and saving towards our futures - right?

Well, if you’re anything like I used to be you get to the end of the month and the cupboard – or the bank account in this case - is bare…if you’re lucky you just have enough to meet your monthly bills but you certainly don’t have anything left to play with.

Well – what if I told you that there were five very simple steps that you – yes you – could take to cut your monthly outgoings, increase your monthly income and thus free up money and create an amount each month that could be squirrelled away for a rainy day?

Step One - Trim Everyday Expenses

We all have a mountain of essential payments that we must make every month; these include all our utility bills, our car, telephone, internet and even cable TV bills.

Although we’re all aware of these amounts draining our bank account every month, few of us give a second thought to whether we’re paying too much when often we actually are!

So, here are just a few things you could easily do to wipe off significant amounts from those bills – amounts which will, over time, compound to create a nice tidy little sum thank you!

Oh, and if you think about every bill you have I’m sure you’ll come up with many creative ways to reduce all of them.

Your Utility bills – have you considered switching your suppliers? Some suppliers in your area will be cheaper than others and all should give you a free quotation of how much you could be saving based on your previous month’s usage. You may get a further discount if you pay each month by direct debit.

Be aware of the amount of energy you use - switch to energy saver light bulbs, don’t put half a load of washing in the machine, wash-up small amounts instead of using your dishwasher every time and slowly but surely you’ll notice a significant reduction in your overall bills.

Your Car – shop around for cheaper car insurance, combine chores into one journey so that you drop the kids off on your way to work and do your shopping on the way home. The more ‘extra’ journeys you can cut back on the lower your fuel bill, the less often you’ll have to have your car serviced and the lower the mileage on the car when you come to sell it.

Step Two - Cut Interest Payments

According to industry statistics, the average home owner in the UK could reduce their annual mortgage payments by up to £1,600 by just re-mortgaging to a better deal. You need to examine the options available to you!

Next look at your credit cards, store cards, loans and overdrafts and check out the rates of interest you’re paying – obviously the sooner you can pay off all debt and stop accruing new debt the better, but in the meantime you should consider switching to credit cards offering 0% on balance transfers, consider switching to lenders offering lower interest rates on loans and consider switching to a bank with lower account charges for things like your overdraft.

Cut your interest payments right down and free up more cash!

Step Three - Rein in Extravagance

Trust me, I know that this is the least popular of all the steps – but, do you really need that daily cappuccino from Starbucks, could you live without that health club membership that you hardly ever use, what about stopping smoking, cutting back on alcohol consumption and spending a few more quiet nights in than party nights out? If you can’t get rid of your satellite or cable TV could you reduce the packages you subscribe to? If you like to eat out could you reduce the number of times you do it per week?

Don’t worry, I’m not suggesting that you should give up living your life the way you like it, I’m just suggesting that you could maybe trim a little off the load and live life today whilst at the same time saving for your life tomorrow.

Step Four - Stop Making Bad Investments

There are so many poor performing, rubbish returning, invisible interest paying savings policies out there that banks and financial advisers push upon us that it’s just not funny!

Yet at the same time there are some fantastic inflation proofing safer alternatives that could just net you a nice rate of interest too. You need to look around a little, use the internet as a good starting point and find out what the banks and financial institutions are offering. And if you’re saving money make sure you’re saving tax too – IRA and pension payments can be made tax free!

Oh, and when it comes to insurances – from car, health, home contents and even life insurance – shop around, shop around, shop around! Big name brokers often cost far more and if you buy your home contents and life insurance all in when you get your mortgage be prepared to pay way over the odds!

Step Five - Add Income Strings to Your Bow

Are you entitled to any tax credits, child payments or other benefits? If you’re entitled you should be claiming what’s rightfully yours! Could you, your partner or your teenage children be contributing a little more to the monthly pot by taking on a part time job, doing extra shifts or working the odd weekend?

Think as creatively as possible and make good use of any extra time and energy you have to boost your family’s income…you might even be able to earn extra income from doing the things you love – maybe you could teach an evening class in something you specialize in, maybe you could sell arts and crafts you make as a hobby or perhaps you could just baby-sit your friends children?

Just remember that there are many options available to you and that every single step you take towards reducing your outgoings or maximizing your income will be a step towards a more secure financial future for you and your family.

Good luck!

Related articles: Money Saving Tips For Low income earners

5 Steps to Becoming a Millionaire

In the year 2002, there were 17.1 million Millionaires in the U.S alone. By 2013, the number of millionaires will triple due to inheritance. For the rest of you, becoming a millionaire is within reach if you apply a 5 step plan involving the following areas:

1. Health
2. Spending
3. Savings
4. Investing
5. Career

Health

Take care of yourself. If your health is no good, you are not going to enjoy the rewards of a solid financial plan. Eat right, exercise daily, and discipline yourself. The most successful investors are those people who have the best discipline to stay with the program.

Spending

It's true, a person will always live up to the amount of income they earn. If you make the money, you are apt to find a place to spend it. The key to successfully saving is to spend less than you make and to also spend more money in areas that will actually preserve wealth.

Savings

A disciplined approach to saving reaps rewards in the future. While saving early in your career, allocate a larger percentage of your savings to stocks. A 35 year old with 10,000 and saving 500 a month will become a millionaire by age 56 if the money invested returns 15% per annum. If the investment rate of return falls to 10% per annum, the millionaire age is moved to 63 years old.

Investing

Focus on an investment portfolio that minimizes your fees and maximizes your returns. If you are not sure about the types of investments, consider low cost index funds.

Career

No matter how much you position yourself, your career will dictate how quickly you reach the millionaire plateau. You have to move above and beyond your job description; Excel in your performance; Make yourself invaluable to the organization. Align your goals and focus on efforts that make you a valuable employee. You want those merit raises. They will add up.

Check out the Groco Millionaire Calculator to determine how much you need to put away to enter the millionaire class.

Financing Your Emergencies Through Personal Loans

There are times in one’s life when unforeseen circumstances necessitate borrowing money. You might pride yourself on being fiscally responsible and go to great lengths to manage whatever debt you may have as best you can, but life is unpredictable. Sometimes it is simply impossible to be prepared for anything life might bring your way.

Perhaps you need a medical procedure and, whether you have medical insurance or not, you simply cannot afford to pay in cash. Or perhaps your car has broken down – a car you need for work purposes, for example – and the damage turns out to be far more extensive than you can afford to pay from your savings. These are just two examples of circumstances where personal loans can save you from financial ruin or other unacceptable consequences.

As with all financial matters, it is always best to do business with a reputable institution. And even then, you should never leave your financial security completely in someone else’s hands. It is vital that you educate yourself and do your research so that you know what you want, what’s available, and which risks to avoid.

It is mostly when unforeseeable event occur or a crisis has arisen that one could easily fall prey to unscrupulous lenders who prey on desperation. Whether you are dealing with a big financial institution or small enterprise which deals only in personal loans, there are some serious risks to be aware of and some pertinent questions to ask.

The most common – and “fastest” – type of loan available at the moment is an unsecured loan, which means you are allowed to borrow money without offering any collateral, without having a co-signer and even if you have a bad credit record. The most worrisome aspect of unsecured loans is that they usually carry interest rates which are much higher than average and thus end up costing you far more than they reasonably should, or than you can afford. The reason these types of loans have such high interest rates is that the lender is taking a bigger risk. Make sure you know what the interest rate will be, do your calculations and decide whether you will be able to pay back the loan.

Another risky aspect of personal loans is the fact that they could involve exit or prepayment penalties. If you happen to find yourself in a situation where you are able to pay off the loan in one lump sum, or sooner than first agreed upon, you might incur a prepayment penalty or have to pay an exit fee for the loan account to be closed. Ask whether any such penalties would apply when you first approach a lender. Naturally, having any kind of debt is not ideal for your fiscal security. Yet for the largest part of the population, taking out a loan of some sort at some stage of your life – be it a study loan, home loan or vehicle financing – is unavoidable.

To ensure your financial situation remains as healthy as possible, it is critical to manage your debt proactively and responsibly. Make sure you’ve done your research and have shopped around for the best interest rate.Deal only with reputable financial institutions if at all possible and, most importantly of all, make sure you pay off your personal loan in strict accordance with the timeframe and increments initially agreed upon. And if at all possible – and if you won’t incur penalties which will nullify the benefit – pay off your loan as soon as you can. Debt is expensive.