Tag: investing

All investing related articles are found here. Educative, informative and written clearly.

Should you trade Forex or stocks?

Choose the instrument to trader based on your strategies, goals, and risk tolerance.

By Guy Avtalyon

The dilemma should you trade Forex or stocks isn’t natural because one trader can trade both. And it could be a smart decision if we consider portfolio diversification. But when people ask this question know exactly what do they want to know.: What has more profits involved? Trading Forex or trading “simple” stocks? Or is it trading options?
Investors and traders have access to a growing number of trading instruments. From tried-and-true blue-chip stocks and industrial to the fast-paced futures and Forex (foreign exchange) markets.

In order to make the best choice, you have to recognize which of these markets are for you.

Forex versus stocks

The most important factor may be the trader’s or investor’s risk tolerance and trading style. As an example, buy-and-hold investors will prefer participating in the stock market. While short-term traders, including swing, day, and scalp trader may prefer markets where price volatility is more present.

For traditional buy-and-hold, “long-only” investors, stocks remain an obvious option for a lot of reasons. Stocks have a long-term history of positive returns. So investors receive income from dividends.

But when it comes to trading, forex trading has a number of advantages to offer. And you should think when deciding whether to trade forex or stocks.

Forex versus Blue Chips

The forex market is the global largest financial market. The forex market has very high liquidity, you can trade around-the-clock, the amount of leverage that is allowed to traders. All these characteristics attract traders to enter the Forex market and start trading.

On the other side are blue chips. Blue chips are stocks from well-established companies, famous brands. These stocks are able to provide profitability even during challenging economic conditions and have a history of paying dividends.

Blue chips are less volatile than many other investments. They are often used to provide steady growth potential to investors’ portfolios.

Differences and similarities of trading Forex and stocks

These similarities or differences could give the final idea to your decision of should you trade forex or stocks. Let’s examine them in detail.

Volatility – Some traders, especially short-term or day traders, favor volatility. It provides them to profit from quick price swings in the market.

The other traders are comfier with less volatile and less risky investments. That’s why short-term traders are attracted to the forex markets. While buy-and-hold investors prefer the security which blue chips provide.

Leverage – The forex market offers significantly higher leverage of up to 50:1, and in some parts of the world even higher. But it isn’t all good as it looks. While higher leverage provides the opportunity to build equity with a very small investment (you can open forex accounts with $100), leverage can just as easily destroy a trading account.

Trading Hours

Another consideration in choosing a should you trade forex or stocks is the time period that each of them is traded.

Trading sessions for stocks have a limitation. It is due to the exchange working hours. Generally 9:30 A.M. to 4 P.M. Eastern Standard Time (EST), Monday through Friday with the exception of market holidays.

The Forex market is active round-the-clock from 5 P.M. EST Sunday, through 5 P.M. EST Friday, opening in Sydney, then traveling around the world.

The flexibility to trade during U.S., Asian and European markets, with good liquidity virtually any time of day, is bonus plus to traders whose schedules would otherwise limit their trading activity.

Tax time

Various trading instruments are treated differently at tax time.

Short-term gains on futures contracts, for example, can be eligible for lower tax rates than short-term gains on stocks.

Furthermore, active traders may be qualified to choose the mark-to-market (MTM) status for IRS purposes. This allows deductions for trading-related expenses, such as platform fees or education.

It is strongly recommended that traders and investors ask the advice of a qualified accountant or some tax specialist. Especially since trading forex can make a complicated time to organize your taxes.

Should you trade forex

The internet and automated trading have opened doors to active traders and investors all over the globe. Anyone can participate since there is an expanding variety of markets.

To be able to make a very important decision about what should you trade stocks, forex, or futures you’ll have to understand your risk tolerance, to take into consideration account size, and convenience. If some active trader is not available during market hours to enter, exit, or properly manage trades, stocks are not the best option.

If some investor’s market strategy is to buy and hold for the long term, generating growth and earning dividends, stocks are a practical choice.

The instrument a trader or investor selects should be based on which is the best fit of strategies, goals, and risk tolerance.

25th September 2018
What is Growth Investing and How To Pick a Stock?
Here is how to recognize the best growth investment stocks and how to execute this investment strategy

By Guy Avtalyon

Growth investing is an investment strategy which investors use to find stocks with higher earnings growth prospects. It doesn’t matter how high their prices are. These stocks usually have low dividend yields. Also, they have higher volatility and limited downside protection. Moreover, they are highly sensitive to changes in interest rates. The companies with stocks that trade at high valuation levels usually have a high P/E ratio, high P/B, and P/S ratio.

Growth investing is focused on capital appreciation. Growth investors invest only in companies that have above-median growth. Even if the stock price looks expensive and metrics like price-to-earnings or price-to-book ratios, confirm that. The growth investing strategy is in contrast with value investing.

This investing strategy’s focus is on a company that has a track record of high or rising growth. For example, a company has a stock price that has rise year after year over 3 or 4 years. Such stock is a target of growth investors. But the timeline shouldn’t be so long. Even if a stock rise at price every week for 3 weeks in a row growth investors will be interested in that stock.

Growth investing doesn’t consider direct research or fundamentals only. Very often it may be a response to the market sentiment.

For example, if you drive BMW and your friends also drive a BMW car. And say, the stock has gone up every month for the last six months. Then you know that the overall market sentiment is good. And the sentiment of the consumers is also a good and valuable metric for growth investors.

So, you would buy BMW stock if you support the growth investing viewpoint.

Who are growth investors?

Some famous investors such as Warren Buffett have stated that there is no theoretical difference between the concepts of value and growth (“Growth and Value Investing are joined at the hip”).

That’s because the growth is always a component in the calculation of value. It is constituting a variable whose importance can range from a little too vast. And whose impact can be both negative as well as positive?

Buffet’s opinion in one sentence is: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”.

But the real father of growth investing is Thomas Rowe Price, Jr. who worked and promoted growth investing through his company T. Rowe Price. He founded this company in 1937 and today is a publicly-traded multinational investment firm.

How to execute a growth investment strategy?

The following businesses are suitable for growth investing:
- Emerging markets
- Recovery shares
- Blue chips
- Internet and technology stock
- Smaller companies
- Special Situations
What is the main issue with growth investing? It is the fear you are buying at the top of the growth curve. One way to avoid this is to look for long-term growth patterns.

Don’t look at growth surges that last one week, or one month or several months. If you really found a solid company, it should have a history of solid growth. And be able to demonstrate an upward trend in their share price over many years.

But, Most investors do not relly on growth investing alone. They look at other indicators that can support a pattern for future growth. Let’s take the BMW as an example again.

If they are bringing out new lines of the car, expanding to different countries then it is clear that BMW is targeting growth as a strategy for the company. So, you may own a good stock if you are using a growth investing strategy.
This strategy is most effective in the long run. It isn’t suitable for short-term investors for obvious reasons. Growth companies need time to grow.
Every investor should ask this question: Why is growth investing?
The possible answer could be because you want a long-term financial stability and wealth accumulation. And you’ll be right.

How to identify stocks for growth investing?

Growth investment involves picking essentially strong stocks. These stocks have a promising future compared to other stocks in their sector and will have an edge in terms of returns in the long-term. While choosing stock for growth investing, it is important to ensure some essential factors such as the revenue model, cash inflow, growth prospects with respect to the economy, the company’s executive board, market, competition, etc. Researching would let you know if a stock suits the growth investing strategy or not. It is easy to get an insight when you study the company’s balance sheets and reading up more about its history, endeavors, and goals from its website or some other sources. Before taking the final call on your growth investment, it is very important to ensure whether the asset fits the criteria of optimal returns.

Here are a few parameters that could be helpful in analyzing whether a stock is a growth stock or not:

Return on Equity: This means the profit-making potential of the company. It is calculated by dividing the net income of the company with the total equity of the shareholders.

Increase in Earning per Share (EPS): An increased EPS ensures better growth prospects. Hence, it is very important for you to analyze if the EPS is increasing or not over the observed time.

Projected Earnings: It gives an insight into the company’s expected growth and can act as a good indicator of growth investment.

What are the picks for growth investing?

Small-Cap Stocks: Companies that lie in the suit of small-cap are those that are in their initial growth stages. This makes them more promising in growth prospects, the affordability of the stocks is higher. This enables you to buy a bigger lot of their shares and make a decent investment.

Technology and Healthcare Stocks: These companies could be a good pick for growth investing. They are a kind of revolutionary innovations, which increases the scope of their growth prospects. The fact they are exceptionally well in the market because they target a wider audience, thus resulting in exponential growth. They stand by the characteristics of growth in the investment.

Speculative Investments: Even speculative stocks could bring in a fortune in terms of growth investing as they come at a higher risk. If you are choosing a speculative investment, make sure to practice caution and invest only your surplus funds with due diligence.

The great influence in shaping this investment style had Phil Fisher, whose 1958 book “Common Stocks and Uncommon Profits” is still today a reference for identifying growth companies and we highly recommend this book.
24th September 2018
How To Read A Stock Charts With Examples?

Amateur traders act upon impulses and this is a problem because all is not as it seems in the market.

By Guy Avtalyon

Stock charts are extremely important. When you enter the stock market, which means that you bought your first stock, you will find that you have to follow the movement on the stock market through stock charts.

First of all, you have to register that fund managers and big investors account for 80% of all trading activity in the market. Their buying and selling will either push your stock up or down. But you are the individual investor and your primary intent is to buy stocks big investors are buying ponderously and of course, you want to stay away from stocks they’re aggressively selling. That’s where charts enter. Once you know what to look for, you’ll see that charts literally show you what these big investors are doing. You’ll be able to fast realize when a stock is being ponderously bought or sold. You’ll be able to use that information to identify the best time to buy, sell, or hold your stock positions.

There are many different types of stock charts: line, bar, candlestick, mountain, point-and-figure, and others. You can see them in different time frames: daily, weekly, monthly, and intraday charts. Even each style and time frame has its advantages and disadvantages, all of them provide you information important to make investing decisions.

Also, there are many different types of stock charts that display various types of information. But all stock charts display price and volume. On each stock chart, the price history is visible. The bars represent the amount of trading history.
For example, on a daily stock chart, each price bar shows the prices the stock traded during that day. On a weekly stock chart, each price bar represents the prices the stock traded over that week.

The length of each vertical bar shows a stock’s high/low price range. The top of the bar shows the highest price that is paid for the stock per period and the bottom of the bar shows the lowest price paid. The small horizontal slash shows the current price or where a stock closed at the end of the observed period. The price bar is blue if the price of the most recent trade is equal to or greater than the previous period last price, or deep red if it is lower than the previous period’s price close.

The vertical lines at the bottom of the chart show the number of shares traded during the observed period of the chart. The length of the volume bar shows a value that corresponds to the scale at its right. The color of a volume bar is determined by its corresponding price bar. It’s blue if the most recent trade is equal to or greater than the previous period’s last trade. And magenta if it is less than the previous closing price.
Well, you are beginners so it is important to show you step by step how to read charts.

You can use different websites but I think that Google Finance has a smooth user interface.

How typical stock chart look?

Now let’s take a look at a typical stock chart. We used Dow Jones Industrial for this guide.

You can see, the series of letters after the name of the company is the ticker symbol. It identifies the company on the stock exchange.

We’ll search for AAPL, which is Apple’s ticker symbol.

Then, click the button to expand the chart to full screen:

Now let’s jump into the different pieces and parts of the stock chart so you can begin to read like a pro.

How to identify the trend lines?

This is that blue line you see every time you hear about a stock! It’s either going up or down right? The trend line seems like common sense, but there are a few things I want to show so you can understand it in a little more detail.

You know that stocks will take huge dives and also make huge climbs. If you’ve read previous chapters you’ll know that you have to hold your emotions in control to be a successful investor.

Never react to large drops or huge gains in a positive or negative way. You are using this piece of the stock chart only to see what’s going on.

The trend line should motivate you to dig further. For instance, Apple as a company really took off from 2009 to 2012. But in the period 2012/2013, the stock began to go down more than 40%! This is where your trend line is useful.

Something is happening and you have to pay attention to it. You have to find out what’s going on with this company. Most strong companies can recover from hits like this, but you have to be careful.

I have to recall some history here. Right around this time, Apple experienced a few major changes. First, it’s longtime CEO, Steve Jobs, resigned (2011). Also, around 2012, Apple informed that their profit margins were significantly decreasing, despite the growing smartphone market. They were trying to expand the smartphone into developing countries, but they were too expensive to enter there. And the stock price is falling.

But new CEO Tim Cook made strategic moves with the company and the rest of the trend line shows that.

How to use trend lines?

The lesson here is how to use your trend line as a first peek, an indicator of something worth to look int

The next thing you have to look at is the lines of resistance and support.

These are levels at which the stock stays within, over a certain period of time. A level of support is a price that a stock is unlikely to drop below, while a level of resistance is one that it’s unlikely to go above. It will stay the same until some major change occurs, such as a reduced profit margin.

A stock’s price does the same thing within these lines of support and resistance.

The point here is to know when to buy and when to sell.

Take a look at Apple’s stock chart again:

I want to show you how the process is important. You have to know that everyone will draw lines of resistance and support differently, depending on how long they plan to hold the stock. Short-term investors can draw more to analyze trends during a shorter period.

So, what we can see in this image?

How to recognize the support and resistance levels?

Line A represents the very first line of support shown. Based on trends earlier to this, everyone feels comfy that the stock price won’t go below this point and probably consider buying at this price or higher.

Line B is the first line of resistance. It is obvious that the stock has peaked at that point for now and it is expected to go higher. Maybe it’s time to consider selling at this price or slightly lower.

Line C shows, the stock has bottomed out again, thus creating a new line of support.

Line D shows the stock price has increased significantly and it’s comfortable to establish this as a new line of resistance.

The trend continues with Lines E, F, G, and H, bringing new lines of support and resistance as time goes on. If it seems complicated, don’t worry. because it is. And a lot of these are speculations.

The lines of resistance can help you to decide when to buy or sell. But remember, it’s subjective and it won’t give you a clear opinion of what to do. You have to use some of your own analysis and evaluation.

How to notice in the stock charts if the company pays dividends?

On the next chart, you can see if and when the company issued a dividend, as well as if there was ever a stock split:

A dividend is when the board of directors decides to give a portion of its earnings back to its shareholders. If you own their stock, you get a small piece of the profit.

Some companies issue dividends, some don’t. If a company doesn’t issue a dividend doesn’t mean it’s not worth investing in.

Some companies just prefer to focus on growth, so they’ll reinvest their earnings as opposed to giving it back to the shareholders. Apple, in this case, could pay dividends quarterly without influence on growth.

Also, you can see that there was a stock split in 2014. That is a strategic move made by the company’s board of directors to issue more shares of stock to the public.

In this case, Apple did a seven to one stock split, noted as 7:1, which means that for every share of AAPL shareholders owned prior to the split, they now have seven.

The value of the company doesn’t change, but the share price might. Companies will often do this to attract smaller investors when the share price decreases.

Many times when a stock split happens, more people invest because the share price is often lower. That increases demand and the overall share price.

How to find the trading volume in the stock charts?

On the bottom of the chart, you can see many small, vertical lines. This is a trend of the volumes at which the stock is traded. Volumes shouldn’t be the only determining factor when buying a stock. Usually, trading volumes increase when the company is in public focus, in a positive or negative sense.

When volumes are increasing, it can also shift the price of the stock quickly. Take a look.

Line A, shows a high volume of trading activity that corresponded with a drop in the stock price. Maybe some bad news that day caused people to panic.

Line B, you can see a slight uptick in trading volume that corresponds with an upward trend in the stock price.

You shouldn’t necessarily have to assume it there will be a connection between stock price and trading volume. But it’s good to know what the volumes have been in the past and what they are currently.

If the volumes are high, a lot of people are trading the stock that day and it is a good idea to buy or sell it quickly.

This is the basics of how to read the stock charts. Once you’ve mastered most of these techniques, you should be able to analyze a stock’s historical activity with high success.

21st September 2018
Value Investing Is Profitable Investing Strategy

Value investing is profitable and could generate huge returns if done well.

By Guy Avtalyon

Value investing is an investment strategy where stocks selected that trade for less than their intrinsic values. But that explanation packs a lot of nuance in a few words.

Value investors usually seek stocks they believe the market has undervalued. Investors believe the market overreacts to good and bad news. And that stock price movements do not match with a company’s long-term fundamentals. That gives to investors an opportunity to profit when the price is deflated.

With these types of investments, you don’t make fast money, but if the investment is right it will eventually blow up and early investors may get their reward.

When this style arose?

In the early 1930s, Ben Graham at Columbia University developed this style of investing. He is the author of “The Intelligent Investor” from 1947.
Graham thought it is difficult for the average investor to beat the market. So he developed the concept of intrinsic value.
But he never fully defined it. Later, he admitted that the value was ultimately determined by the investor’s beliefs.

What is value investing?

This strategy involves the three-step process. But most people believe the process has only the first step.
So, let’s see.

The very First step. – Screen stocks based on price-to-earnings (P/E), price-to-book (P/B), or other valuation-related metrics. In order to identify possibly undervalued stocks.
The second step. – You have to evaluate the low P/E or P/B stocks to determine their intrinsic value.
And the third step. – Make an investment decision. Buy only if the stock price is below the intrinsic value by a predetermined margin of safety (normally around 30%).

Value investors are very careful of valuation risk.

They are bottom-up stock pickers, with a long-term perspective. Value investing is all about concentrating a portfolio on a few, selected, undervalued stocks. Diversification does not matter much. The margin of safety helps identify a stock as truly undervalued. But also, protects the downside and controls for risk.

What is important for value investing?

Before deciding if this investing strategy suitable for you not, you have to find the answers to several questions. They are very important when estimating is some stock suitable as value investing.

What does the underlying business do?
What type of return are you looking for?
Does it have competitive advantages and which?
How much money can it generate over the next several years?
Which the underlying business is actually worth?
What’s the current price of the business relative to your aspired return on investment?
How likely are you to be wrong evaluating the business?

That seems like a lot of questions. But they’re fundamentally liable like the other investment strategies are not. It isn’t necessary to predict what other investors are doing or thinking in the short term.

For value investors, it is important to realize the stock is currently underpriced. Some people believe the stock market is financial mumbo-jumbo, where success is a kind of lottery. People very often ask this one single question: “Isn’t the average investor set to fail?”

I believe the contrary, I believe that you can succeed.

Value investing has to find great and successful businesses, the ones that bring a chance to purchasers. So they can make fair profits. They earn solid incomes. These are companies anyone would want to own because they produce real money for their owners. When some investor buys shares of these companies, she or he owns a small part of their business. Value investors buy shares in companies that have demonstrated that they can and will continue to succeed.

What is the value investing strategies?

The most popular value-investing method is the discounted cash flow analysis.
That’s how investors try to determine a company’s financial future. The next step is to discount the future cash flows based on a preferred discount rate. The rate is determined by the weighted average cost of capital or short WACC. Also, the weighted average between the cost of equity and the cost of debt is one of the measures.

There are comparable versions of this analysis that tries to determine intrinsic value from other cash flow. It is the dividend discount model. Its focus is on dividend payouts as one of the reliable cash flows, free cash flow isn’t so important to these analysts.

The point of all these methods is to find the net current value of a stock. In other words, they want to find what the company is worth when all future cash flows are discounted at a determined rate.

Also, there are other methods for finding undervalued stocks, for example, so-called asset play. Investors try to find out companies that have valuable assets, for example, land or intellectual property that isn’t accurately visible on its balance sheet or in its market price. Sometimes assets like patents are considered very valuable.

These value investing strategies have clearly been successful for famous investors. But there are drawbacks to value investing.

Probably the biggest one is that it creates a blind spot for fast-growing startups. That may not yet be profitable but sometimes it turns into blockbuster investments.

Is this strategy right for you?

Value investing can be very profitable and could generate huge returns if done adequately.

Your decision to invest for value may depend most on your investing goals and your time horizon.
Value investing is an intelligent choice for some middle-age investor that looking for wealth safety and low-risk returns
Always keep in your mind, dividends-paying investment, and, at the same time, profitable and high in value will provide you better profits. So, it’s almost impossible to experience great losses.
By finding undervalued stocks with the potential to grow you’ll have better chances to outperform the market.
Value investing is a smart component to include in any diversified portfolio as a mix of value and growth stocks. It can help investors get access to big winners.
Anyway, diversification is one of the best ways to reduce the overall portfolio risk but without losing out on returns.
Also, there is the compound interest. With its power, value stocks will generate income over the long term. Add dividend payments since many of these companies offer regular dividends.
But if you’re a younger investor, growth stocks could be a better pick for your investment portfolio.
But for any investor, choosing undervalued stocks is a proven way to beat the market.

20th September 2018
Earn a million! How and what you can do?

2 min read

If you earn a million dollars that will change your life for sure. But how to earn a million? Is that amount enough for some changes?

On some point in life, everyone asks themselves how much money would dramatically change their life.

It can be a tricky question but also a subject of serious consideration.

We all know some story about lottery winners and how much money they got and how fast they spent all. Easy come, easy go, some may say.

Million would change someone’s life. Several million everyone’s. Remember, everyone’s.

Most people won’t see a small part of that money in their lifetimes. Some of us play the lottery and have a hope that one day the luck will hit us. That a dream and there is nothing bad in having dreams.

But what can we do in reality? How much money would you consider “life-changing”? This question is worthy of economic consideration.

If you suddenly earn $1 million more economists say not as much as you might think.

You have to pay taxes on it and for sure you have some loans and outstanding debts to pay off. Speaking about me, if I were to win $1 million tomorrow, I’d definitely still keep working at my current job. One million bucks are not enough to change my entire life. Or anyone else’s. Maybe I’d spend a little bit of a vacation, and then I’d put the large amount of it in savings.

Actually, it isn’t so hard to earn millions

But let’s take a look at how much money is needed for a month of decent living.

Most of us are spending as little as possible and saving as much as possible. But this isn’t the point. Point is to set realistic goals and understand your own financial position.

Start with this number. Do you know what your life costs right now? Do you have a mortgage or you pay rent? How much do you spend on essentials, from food to clothes to insurance to annual fees, every month? And don’t forget to account for inflation over the long term.

Then you have to figure out how much it will cost you to get out of debts, from balances carried on personal credit cards to car payments to student loans. The first number figure that would change your life is the amount it would cost you to pay off all debt on depreciating assets. That’s your first number.

But your debt on depreciating assets isn’t an investment. Your car for sure will not get more worthy over time. It will not increase its value. That why this kind of debt is classified as bad debt.

Let’s go further to earn a million

Now, you have to figure what is the amount of money that you would need to pay off all debts on appreciating assets. It’s classified as good debt, because underlying assets like house or land, tend to increase in value over time.

But you’d still probably have to work to maintain your lifestyle. The third number is the amount it will take to produce little more than you need every year without touching the principal of your investment. That’s the third number.

Anyway, you need at least $50,000 a year to maintain your lifestyle. You go out to eat, take a vacation, buy new shoes, and pay your property taxes.

How much capital do you need to invest to generate $50,000 every year after taxes and inflation?

Let’s say you don’t want a risky investment, so you rather stay away from stocks. If you put your money in bonds, you might get a more stable return. If you looked for municipal bonds, you probably wouldn’t have to pay federal or state taxes. Suppose you can find a good portfolio of municipal bonds paying a 4% annual return. That’s an acceptable rate and a safe investment and probably even avoids taxes. For that $50,000 you need a principal amount of $1.25 million dollars.

Let’s say you can save an extra $15,000 per year if you pay off debt on depreciating assets in one leap and $18,000 per year on appreciating assets. And you have no debt for the next 40 years. WOW, you would have $1,320,000.

A million is a lot of money, but it’s also not an unreasonable amount of money.

It’s not lottery jackpot money. If you work hard, save well, and invest well, that amount is within your reach during your lifetime.

To make things clear, it is so fun to have dreams. But this doesn’t have to stay as a dream.

Creating a million dollars in one shot to do everything may never happen. But what you can do? You can make progress onto all three goals. You are the one that has the power to change your life and your financial future.

But where is dramatic life change? Stop watching movies.

Risk Disclosure (read carefully!)

19th September 2018
Signal Provider – How To Pick Right One?

Picking the good signal provider can be harder than anyone can imagine. Truly nightmare.

By Guy Avtalyon

A signal provider can help you but also ruin you. Many forex traders use forex signal providers’ services to make money. Traders who struggle to make profitable trades in the forex market can leverage off successful forex traders by using their signals in their trades.

Not every forex signal provider out there is authentic and attempting to make sense of which ones are con artists. And ones which are genuine can be an overwhelming assignment.

Finding the right signal provider is the challenge

Finding a reliable forex signal service can seem like a challenge. There are those signal providers that are professional and transparent.

And unfortunately, there are those providers that do not always have their members’ best interest in mind.

It is up to you. You have to do your due diligence. To be sure that you are working with an honest forex signals provider. The one you can trust and have faith in.

There are several things the trader would consider when are going to pick your signal provider.

A trader should be aware that there are a lot of hardcore scammers in the market. They are working very hard to provide fake, low quality, and substandard forex signals.

Most of these hardcore scammers have no background. Or training in any financial matters. And usually, feed the trader with performance statistics that are imaginary.

But yet convincing to a trader who is not smart enough.

The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider.

This will help him or her in making an informed and proper judgment.

Another way is by the trader looking at the level of detail contained in the signals provided by the forex signal provider. If he or she realizes that it just entails a few charts with a loss or profitable line, the trader has a reason to think twice before following such signals.

A trader should look for testimonials about various forex signal providers available in the market. A trader should look at what other players in the industry are saying about the available signal providers. This will enable the trader to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered.

What trader should check?

The trader should check the number of TPs the providers have in one trade.

Also, the trader should check how the providers put together the performance statistics.

Check if the providers have a trade by trade statistics.

The bottom line is that any trader who wants to be profitable in the long term should start learning by himself or herself about forex signals through experience and self-training.

If you search for forex signal providers on the web, you will most likely be unable to recognize the sites of scammers from genuine suppliers.

Scammers’ sites are so comparative and competitive.

Sometimes you can feel that clueless forex merchants typically get gotten in the scammer’s site rather than the genuine forex signal supplier. When they understood that the signal is not profiting, it would have been past the point of no return.

The scammers had officially taken the cash and it is past the point where it is possible to do anything.

Signal providers will give you entry and exit signals but remember you have no idea how they came up with the entry and exit points, all you have to do is follow.

With all these promises, you will be tempted to subscribe. That is the moment it will dawn on you that whatever you have subscribed to is a pack of lies.

Forex Signal providers are typically separated into two different groups

It is based on how they generate their trading ideas – technical analysis and fundamental analysts.

Technical Analysts base their trading decisions on chart analysis including support and resistance levels, candlestick patterns, price channels, market structure, or other technical approaches. Many technical analysts have a proprietary method for analyzing the markets. And the highly successful ones have spent many years researching and testing their methodology. All over historical data and in real-time market conditions.

Fundamental Analysts base their trading decisions on economic and news related data. This could be in the form of long-term interest rate analysis, inflation, central bank policy, employment reports, sentiment surveys, and more.

Some are longer-term position traders while many others are shorter-term traders that try to catch volatility spikes after an anticipated news release.

Some traders may think “reliable” means having a high win rate, but that is not really what you primarily want to be looking at.

Actually, win rates are not that important as a metric by itself. You must also analyze the average risk to reward in conjunction with the win rate.

There are strategies with 90% win rates that can lose money and then there are strategies with 30% win rates that can make money.

Another factor to consider is the technology the signal provider is using. Do they have a reliable platform to send out notifications and are there multiple ways for you to receive the alerts? But there is something important also. Do the trading alerts always detail the buy and sell signals, or present stop-loss levels and targets? Or do they only provide superficial information such as entries but no exit details? These are some of the factors you need to consider.

So how can you find out if a provider is reputable and worth your time?

Sign up for a Trial – Sometimes this the best way to get started is by signing up for a forex signals trial. You may get a real sense of the quality of service by diving in and taking a test drive. Many signal providers offer a 1 or 2 week trial for members.

Join their Email List – Another way to find a provider is by joining their email newsletter. You will find the value that they provide for free. So, you can evaluate whether their premium forex signals service will meet your expectations.

Check their Track Record – Every single reputable FX signal provider will implement a performance record detailing their published trades. This is a good way to find their average pip profit per month. Their risk parameters, average win percentage, and other related metrics.

Google them – Yes, simply Google them. Are they mentioned in any important trade publications or articles? What type of social following do they have?

Do everything possible to find with whom you are dealing. Just don’t be one of those naysayers.
Check it, try it, test it, and make your own conclusion.

10th September 2018
Trade signals – What Is It and How To Use?

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2 min read

Trade signals are simply when someone is making a trade call. Either to buy or sell a security or other asset, generated by analysis.

They show you that it is a good time to buy or sell a particular security.

So if they believe an asset will go higher or lower, they will tell you via some kind of message, email or software. After that, it is up to you to follow or not to follow.

Actually, trading signal is a alert that is based on technical indicators.

Trade signals come in a variety of forms. They can be bull or bear pennants, rectangles, triangles, and wedges, as well as head-and-shoulders chart patterns. Trade signals may also bring attention to abnormal volumes, options activity, and short interest.

There are lots of trade signals

As anyone can make calls, the challenge often is finding one run by an actual trader. These type of services exist in the institutional world as well. They just tend to be a little more accurate than ones you find available to retail traders.

Market Signal is an unintentional or passive passage of information or indication between participants of a market. For example, If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control. Thus instead of equity capita,l it prefers loan capital. It is based on technical indicators. And usually is the sign for when to sell or buy a particular product.

It also brings the attention of users to the other options available, abnormal growth and short-term interests.

Trade signals in volatile markets

Using signals in volatile markets can help to point out opportunities to the investors. Also, they will signal them if they disappear.

There are usually two ways to deliver market signal: send news and activity. The market signal expects to deliver consumer, rivals and outlet member. And the earlier studying of the market signal which is mainly a concentration of signal’s influence.

For instance, it is the price signal where costly products make the customer think it is made of high-quality raw material.

That is a kind of advertisement in which the main aim is to make the customer think that a certain enterprise has more advantage.

Every company doesn’t market in a static environment, the competitor and member of the outlet will make prediction and reaction to enterprises, their decisions process is a dynamic market mechanism.

Trade signals in Forex

In Forex, traders are using trade signals all over the world to aid them in making critical decisions about their trades. They are one of the most important tools a trader has, and almost all traders choose to use them in one way or another.

There are many types of signals systems, some are offered for free while others for a fee but take in mind that a trustworthy service should include information about taking profit and stop loss configurations.

A forex signal is a suggestion for entering a trade on a currency pair, usually at a specific price and time.

Who can generate the trade signal? Human-analyst or an automated Forex robot supply a subscriber of the forex signal service. They are usually sent via email, website, SMS, RSS, tweet.

The majority of signal providers focus on supplying signals based on technical analysis and a minority work on fundamental analysis or price action.

Technical analysis, such as Ichimoku and candlestick charting, show both short and long-term price trends giving the signal provider flexibility in supplying a range of trade options.

The fundamental analysis gives longer-term trade ideas. Price action gives extremely short-term trade ideas, often more suited to scalping.

Trade signal in the stock market

The signal in the stock market is developed by George Lane. It is an indicator that measures the relationship between an issue’s closing price and its price range over a predetermined period of time.

A short note about George Lane (1921 – 2004): He was a securities trader, author, educator, speaker, and technical analyst. He was part of a group of futures traders in Chicago who developed the stochastic oscillator (also known as “Lane’s stochastics”). This is one of the core indicators used today among technical analysts. Lane was also President of Investment Educators Inc. in Watseka, Illinois, where he taught investors and financial professionals basic and advanced technical analysis methods. He popularized the stochastic oscillator.

Stock trading signals

Stock trading signals are simply the implementation of a trading system or method.

The actual signal is given when a traders system determines all criteria necessary for a new buy. Signal are met now and a new buy order can be placed by the trader.

Stock trading signals are most often associated with technical analysis. This is a study of price action and derivatives of price action.

An example of a technical analysis price indicator may be a Moving Average or MACD. Traders can receive stock signals on thousands of trading methods.

Trading stocks can be extremely lucrative when you are able to find trading signals that are proven to be effective. Trusted stocks signals help you predict the market investing in stocks. Doing that with live trading signals sent directly to your device, in the app. With this, you will be able to get live rates on hundreds of different assets.

How does it work?

The software scours social media and accumulates posts, comments, etc that include keywords of interest. All this data is then filtered and crunched to produce interesting statistics. Showing the true public opinion using their words, giving an in-depth insight into public minds.

Risk Disclosure (read carefully!)

9th September 2018
What is Speculation? Trading or Gambling?

3 min read

The definition of speculation says:

The speculation involves trading a financial instrument involving high risk, in expectation of significant returns.
The motive is to take maximum advantage of fluctuations in the market.

Who are speculators?

Speculators are prevalent in the markets where price movements of securities are highly frequent and volatile. They play very important roles in the markets. Because they can absorb excess risk. And provide much-needed liquidity in the market by buying and selling when other investors don’t participate.

What is speculation?

Let’s be clear.

Speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more worthy in the future.

Speaking about finance as a field, speculation is also the practice of engaging in risky financial transactions. In an attempt to profit from short-term fluctuations in the market value of a tradable financial instrument.

Rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest.

Not one speculator pay attention to the fundamental value of a security. Instead, speculators are focused purely on price movements. Speculation can involve any tradable good or financial instrument. Speculators are particularly familiar with markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Why speculators are important?

Speculators play one of four primary roles in financial markets, besides hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who look for profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument’s underlying attributes.

Why wouldn’t we consult history?

The appearance of the stock ticker machine in 1867, removed the obligation for traders to be physically present on the floor of a stock exchange. Since then, stock speculation went through a dramatic expansion through the end of the 1920s.

The number of shareholders increased tremendously. Let’ say, from 4.4 million in 1900 to 26 million in 1932.

Whether speculation has a place in the portfolios of investors is the subject of much debate. Some investors believe the market is always fairly priced. They are thinking about speculation as an unreliable and unwise way to profits. Speculators believe that the market has a lot of variables and each of them is the opportunity for capital growth.

The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators, and academics.

Speculation as higher risk

Some sources note that speculation is simply a higher risk form of investment. Others define speculation more narrowly as positions not characterized as hedging.

The U.S. Commodity Futures Trading Commission defines a speculator as “a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements.”

The agency emphasizes that speculators serve important market functions. But defines excessive speculation as harmful to the proper functioning of futures markets.

Frankly, some speculation is necessary and unavoidable.

Why?

In many common-stock situations, you can find substantial possibilities of both profit and loss, and the risks therein must be assumed by someone.

True?

Many long-term investors, even those who buy and hold for decades, maybe classified as speculators. Of course, excepting only the rare few who are primarily motivated by income. Or the safety of principal and not eventually selling at a profit.

We already conclude the trading is art.

But we have to admit that speculators are real artists.

Yes, we know that some market pros have the opinion that speculators are gamblers. But as we said above, a healthy market is made up of not only hedgers and arbitrageurs, but also speculators.

Economist John Maynard Keynes said that speculation is knowing the future of the market better than the market itself.

And you know who Keynes was. This giant of finance, English economist, journalist, and financier is best known for his Keynesian economics, theories on the causes of prolonged unemployment.

He developed, so-called, Keynesian economics during the 1930s in an attempt to understand the Great Depression. Keynesian economics is a theory of total spending in the economy (called aggregate demand). And its effects on output and inflation.

A Keynesian believes that aggregate demand is influenced by a host of economic decisions, both public and private and sometimes behaves erratically.

Let’s go back to speculations.

Speculation usually involves more risks than investment.

That’s true.

But, everyone has to recognize the price-stabilizing role of speculators. One who tends to even out price-fluctuations due to changes in the conditions of demand or supply. Only because they have better than average foresight.

One of them explained the benefits of speculation. Victor Niederhoffer, in his book “The Speculator as Hero” wrote:

”Let’s consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.”

The art of speculating covers a wide range of trading tactics. Including pairs trading, swing trading, employing hedging strategies and recognizing chart patterns. Speculators are well skilled at fundamental analysis. Including spot over- or under-valued companies, the amount of short interest a company holds. And, analysis of earnings and other SEC statements. A speculator with skills and good performance knows that the short-term movements of the investment markets are largely tied to world events.

According to the Los Angeles Times, baby boomers are trying a new investment strategy for their retirements accounts.
Instead of the passive investment strategy that most employees use, an increasing number of people have turned to speculate. In an attempt to catch up on shortfalls in their retirement accounts.

How to become speculator?

Every trader who wants to become speculator has to spend many years of learning, watching, practicing.

Such one must learn how the market behaves and watch how favorite stocks react to market events.

For many traders, the book, “How to Make Money in Stocks” by William O’Neil, is a value for learning the art of speculation.

This book and many others provide ambitious trader practical tips on trading and risk management.

Speculation popularity is spreading rapidly because of the easy access to world investment markets through online brokerage portals.

But speculation is difficult to master, so you have to learn a lot if you mean to become speculator one day.

After you have a continuous track record of success through both up and down markets, it’s time to consider speculating with real money.

Successful speculating takes a lot of skill, time and experience to master. Most people who work outside of the financial industry don’t have that.

That’s why the speculators are real artists.

Risk Disclosure (read carefully!)

7th September 2018
Scams – How to avoid scams in trading and investing
Scams in the world of trading are not rare, so pay attention to the following situations.

By Guy Avtalyon

The intent of all the scammers is to get hold of your money. Scams come to us with many faces, different forms, but all of them have one goal: to make us poor. They are getting us to reveal our personal details, steal our information, or make us to voluntarily give them cash.

At first, everyone thought the Internet was a safe place. But we all can become an easy target for evil actors who want to steal our personal data.

How to recognize scams?

Criminal minds can reach into our private lives, our homes, and our work offices.

And there is little we can do about it. Attack tactics and tools vary from traditional attacks from malicious software to ingenious phishing scams. They are usually developed in regions where justice can’t easily reach out to catch them.

The forex market involves very active trading of over $1 trillion each day, with futures and currency options, it is closer to $5 trillion daily. The market does not have strong regulation, although things have started to improve recently.
Let’s say, everyone wanting help in making money in the stock market will be interested in finding a trading system.

There are plenty available.

Unfortunately, there are so many humbugs in the trading system.

How to separate the legitimate trading systems from the scammers?

Based on research and experience, here are some good ways to mark trading system scams:
- Do your own research. There is no need to be in a hurry when you have to invest your own money. You should first read up on the steps of investing. Make sure you know at least the basic setups of trading and investing. Be very cautious with online trading.
- Choose a trading system. Successful trading systems can be a hedge fund or mutual fund. If you want to invest in something that has clear systematic knowledge-based information, you have to pick some trusty trading system.
- * Examine a trial period. An investment scam often does not include trial-periods or customer satisfaction. Before you invest your money, you should invest your time in researching the terms and conditions of the item.
- * Check a broker report. It has to be registered, so you may get reports that include information such as qualifications, reliability, and employment history. This can help you to spot any previous problems or concerns before investing.
Cybercriminals will pull you to believe you can make money easy and fast on the internet. They’ll promise you plans and methods of getting rich quickly. It is quite simple especially when someone is in a difficult financial situation.

How do trading scams work?

This scamming method is similar to the romance scam.

Cyberattackers approach to the emotional side of victims. For example, the false posting of non-existent jobs for a variety of positions is one of the online criminals’ methods.

Using different job types, such as work-at-home, the victim is pushed to give personal and financial data with the promise of a well-paid job. Of course, it carries lots of money in a very short time. For sure.

Never share sensitive financial information with anyone you don’t know well. Scammers can reach you out via phone, SMS, or email. They can contact you, pretending they are from a financial institution or government agency.

They could tell your account is compromised or needs to be updated. These criminals are trying to trick you into giving them your credit card number, Social Security number. This scam is known as phishing.

Keep in mind, your bank or credit card provider will never ask you for personal data in that way. If you receive a suspicious call or email, call the credit card provider or bank immediately to check on your account status.

Let’s go back to trading.

One of the challenges a novice forex investor faces is how to determine which operators to trust in the forex market and which to avoid. Signal sellers are a good example. Some analysts propose that many or even most signal sellers are scammers. A frequent criticism is that if it were really possible to use a system to beat the market, why would anyone that has this information make it widely available?

Other analysts distinguish between known scammers and more reputable information sources such as Metatrader, that offer a well-thought-out signaling service.

Behind these views lies a larger difference of opinion on whether anyone can predict the next move in a trading market. The best way to determine if a signal seller can benefit you is to open a demo trading account with one of the better-known forex brokers. Be patient, and you’ll determine whether predictive signaling works for you or doesn’t.

Some forex brokers do not deal fairly with their customers and defraud them. You should trade with a broker that also handles other stock market trades and is subject to SEC and FINRA oversight.

The forex trade itself may be unregulated, but no broker as the subject of such oversight would risk its license for other securities by defrauding its forex customers.

Follow these signals because such scammers are always coming back. With the same or slightly altered face.
5th September 2018
The Barriers to Learning About Stocks and how to avoid them

Be objective, don’t expect the success overnight, have reasonable expectations, think in all probabilities.

By Guy Avtalyon

First of all, never base your decisions on emotions, rumors, or rush to the next hot opportunity. This is one of the most influential barriers to learning about stocks.

You will end up losing money as a result. Some investors despite their problems, continue with the same actions and keep getting the same bad results.
Investors have to remove barriers on their path to success. Otherwise, success will never come. All investors must seek to continuously remove new barriers as they appear.

What kind of barriers to learning about stocks you may have?

Emotions

The fear and greed! Many investors experienced the obscure of ability to rationally consider through an investing opportunity. This leads to poor investment decisions and a loss of money.

For instance, it is in an investor’s best interest to sell high and buy low, investors hate to sell winners and are unwilling to buy out-of-favor stocks. Why so many investors hold winning investments too long? When they fall back, they continue to hold on to them, hoping they will return to their previous highs. They even lie that they will sell if the price returns to the level at which they bought it.

Also, there are investors who hold on to losing investments! Okay, they might be in love but why to hold for so long? They have some hope. If they wait and hold longer, their shares will recover. That might happen never.

They can sell to at least break even, very often such investors become losers. Because their capital is tied up in a losing investment and is unable to produce a return. This reduces account balances and expands stress levels.

Most investors admit that holding investments too long is the mistake that was most detrimental to their success.

Less knowledge

Some investors think if you just buy and sell the right stock, you will always make money.

That’s wrong! Totally mistake! Barriers to learning about stocks!

Sometimes, investors can have less understanding of how markets work. That drives stock prices and successful investing performance.

Also, so many investors tend to overestimate their strength to beat the market. As a result, they take on unnecessary risks. People are often drawn to powerful performance, even when it’s not sustainable.

Many investors follow the hottest sector and don’t have a sufficient understanding of the risks involved.

For instance, investors realize they should not overweight their portfolios with too much money in one investment, but they continue to do so. It isn’t rare that people buy too much stock in the company where they are employed, because the company’s available retirement funds and use of options as a part of their compensation package makes this easy.

Barriers to learning about stocks may leave investors with a portfolio that lacks diversification.

Some other investors don’t understand how bonds work, and they avoid them. Few of them realize that bonds hold a preferred position should a company declare bankruptcy.

Many others don’t realize that when interest rates rise, bond prices go down. When it comes to understanding important concepts such as how a central bank sets interest rates and the yield curve, even fewer investors have sufficient knowledge to make rational decisions.

And more interesting, most investors do not know when to sell a stock that has substantially appreciated. They continue to hold the stock instead of selling part of their position.

In that way, they could capture some of the profit and make capital convenient and available for other investments. They can’t realize that as the price of the stock goes up their portfolio becomes even more unbalanced.

The market has the ability to balance portfolios for investors, sometimes to their astonishment. Many investors are confused by the idea that rebalancing entails selling some of the investments that have performed best and buying more quality stocks that have lagged.

Losing the Bigger Picture

Despite many investors like to say they invest with a long-term perspective, they continue to make decisions based on short-term movements and ideas. Most investors believe that setting long-term goals for such things as buying a home or providing for retirement are important. But still, they fail to establish viable financial plans to do so.

Without these plans, their decisions are decaying. Basing decisions on unpredictable market fluctuations can be very dangerous because there is a good chance that these investors will make the wrong decision. That can obstruct their ability to achieve their long-term goals.

When the investors realize that the market has risen, they pour cash into stocks and mutual funds, trying to grab part of the profit the professionals have realized. When the market puts in a decline, some investors panic and sell close the bottom. And very often, this pattern continues, causing such investors to lose much of their capital.

How to remove barriers to learning about stocks

No matter what your barriers are, it is important to put together and plan to remove them. Here are some steps you can take to eliminate these barriers to your investing success. Experts advise doing this.

* Learn to monitor your performance: Measuring your performance creates a record of what has worked and what has not. This can help you to recognize problems that you repeat. You should record the overall market trend, the sector trend, the reason for making the trade, the exit target, and the trailing stop. Do this for each trade no matter if you sell or buy. This record is very useful in evaluating your investing activities and can be used to identify what barriers you are meeting that obstruct your success.

* After you have measured your actions, you can identify what you have to change: Inspect your past tradings and find patterns that show to barriers to success. Maybe you impulsively buy the next stock without thinking? Does your explanation prove to be wrong most of the time? The key is to identify the investing behavior that inhibits your performance.

Stay focused and avoid barriers

* Stay focused on what you need to change. Like any effort to change behavior, you must remain focused on the actions you take to reinforce the investing behavior you wish to have. If you think you are not focused on how to change your behavior, then take a break from your investing until you recover your focus.

* Determine how you will understand your losses. Keep in mind that losses are part of investing. Learning how to deal with them is one of the most important pieces of successful investing behavior. You have to define what your loss looks like through your stop loss and reasons for the trade. You must accept the loss as part of the trading. Accepting a loss is a trading skill that is a crucial behavior. Making a losing trade ahs to be an acceptable process in your trading strategy, you’ll eliminate the emotion and fear that comes from a loss. You’ll jump to the next opportunity without fear.

* Become an expert at one investing strategy: There are many ways to evaluate the market and select stocks that offer good investment opportunities. Don’t try to understand every perspective on a stock. It is best to get to know one reliable investing strategy. In that way, you will gain confidence in your investing access. This knowledge will form a valid base for your investing. And when you become an expert you can expand your knowledge base by adding a new approach.

Think twice to avoid barriers

* Think in probabilities: The market is in permanent movement. It forces the investor to continually evaluate the risk-reward ratio of each opportunity. You can’t move the market, that’s why you need to rate what is the greatest possibility that will move the market, key sectors and the stocks you are watching. Evaluating what is most possible to happen in the sense of probabilities could help you to make a valid investing estimation.

* Learn how to be objective: Many investors want to believe that the market will do what they think it should do, rather than what it actually does. Any limits you place on the market will usually turn out to be wrong. The market does what the market does. Investors are best served if they maintain an objective perspective. If you are neutral, then you will not feel any pressure to move quickly. You will not be afraid to make an investment decision. And the most important, you will not force your opinion on the market, but rather sense what the market is trying to tell you.

Do not expect this to happen overnight. Removing the barrier is a long-term process. But if you have a defined plan, you will be able to create a program to remove the barriers that keep you from achieving success as an investor.

31st August 2018