What is Expectancy?

I have been watching as a several people on a forum discuss, argue and lend their ideas about entry techniques. They are going crazy over what the proper entry should be and why one chart pattern is better than the other. One person has even said how they purchased massive amounts of software to help them enter the market. Now dont get me wrong, I always use techniques to get me in the market but I understand that this is the least important factor weighing on an investors overall success. I use technical analysis every day and I study patterns that allow me to enter with the ideal buy point (what I believe to be the ideal entry) but I know that strong up-trending stocks give me just as good a chance to make money as stocks breaking out of a cup with handle pattern. I am one that makes my living buying stocks making new highs so I can basically prove that the random entry strategy does work as long as strong money management and exit strategies exists.

By reviewing my personal trades and the coverage of dozens of stocks on the MSW Index over the past two years, I can tell you that my system with the highest expectancy is buying fundamentally sound stocks that are making new highs on above average volume. Where do I find these fundamentally sound stocks? I use multiple computerized screeners that filter out stocks with increasing earnings, high EPS ratings and increasing relative strength ratings. Once I find these stocks, I narrow them down using my own eyes by performing technical analysis. The process is simple as I am basically looking for stocks making new highs with decent to strong fundamental numbers. The process is almost random. To tell you the truth, I could probably narrow down my buy candidates each week to a list of 20 and throw darts at ten stocks to buy the following week and still have a profitable year because I do use position sizing and strict sell rules. Think I am crazy: think again as I explain what expectancy is.

I responded on the forum by saying: Entering at the right time is important and it can lower your risk and increase your overall expectancy but money management and exits are much more important than entry.

Studies have been done between random entry systems and specific systems that use entries based off of chart patterns with amazing results. The random entry system typically outperforms the structured entry system when it uses money management (position sizing techniques) and a strong exit strategy (assuming that the structured system doesnt employ money management tools).

I love CANSLIM and ONeil but the entry is not the most important aspect you should be focusing on, it is money management and exits. Most people dont want to hear this and that is why so many entry based systems sell so well over the years. How many of those systems actually make their users money? CANSLIM does use a 7%-10% sell stop rule but it ignores position sizing and never explains the probabilities of the system when implemented in certain ways.

As I said, I make money using a system based from CANSLIM (an entry system) but it is heavily balanced with strong money management techniques and a strong exit strategy.

So what is expectancy?

Expectancy tells you what you can expect to make (win or lose) for every dollar risked. Casinos make money because the expectancy of every one of their games is in their favor. Play long enough and you are expected to lose and they are expected to win because the odds are in their favor. Most games at a casino are completed in a short period of time so they can increase their odds of winning. The same holds true for investing. If your expectancy is positive; you can make more money with multiple trades in shorter periods of time. If you told me this ten years ago, I would strongly disagree based solely on beliefs. Now with experience, I continue to move down the path to more frequent trading and a structured system that is run like a business. I now have massive amounts of data based on real trading that I have performed over the past several years.

Expectancy is your profit percentage per win multiplied by your win rate minus your loss percentage per loss multiplied by your loss rate. I will use examples from Trader Mikes: Trading 101: Expectancy (tradermike.net) and Van Tharp's Book: Trade your way to Financial Freedom:

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Expectancy = (PW*AW) less (PL*AL)
PW is the probability of winning and PL is the probability of losing.
AW is the average gain (win) and AL is the average loss

So lets do an example (assume $12,500 per position, a $100,000 portfolio using 1% equity risk):
If my trades are successful 40% of the time and I realize an average profit of 20% but I lose an average of 5%, my expectancy is $625 per trade.

(0.4 * $3,125) - (0.6 * $625) = $625

$1,250-$375 = $625

I lose 60% of the time yet I show a profit of $625 per trade. If I have a system that produces 65 trades per year, I would realize an annual gain of $40,625 (hypothetical scenario). A 40% gain on the original $100,000 (minus all commissions, fees, taxes and compounding).

Trader Mike (tradermike.net) offers an example geared towards a day trader: "As an example let's say that a trader has a system that produces winning trades 30% of the time. That trader's average winning trade nets 10% while losing trades lose 3%. So if he were trading $10,000 positions his expectancy would be:
(0.3 * $1,000) - (0.7 * $300) = $90

So even though that system produces losing trades 70% of the time the expectancy is still positive and thus the trader can make money over time. You can also see how you could have a system that produces winning trades the majority of the time but would have a negative expectancy if the average loss was larger than the average win:
(0.6 * $400) - (0.4 * $650) = -$20

In fact, you could come up with any number of scenarios that would give you a positive, or negative, expectancy. The interesting thing is that most of us would feel better with a system that produced more winning trades than losers. The vast majority of people would have a lot of trouble with the first system above because of our natural tendency to want to be right all of the time. Yet we can see just by those two examples that the percentage of winning trades is not the most important factor in building a system. "
- Trader Mike

Most traders look for three major factors when developing a system:
The right odds or positive expectancy
Multiple trades (opportunity)
Shorter holding periods to compound the profits

Lets look at the calculation one more time using only percentages:
PW: 48%
AW: 10%
PL: 52%
AL: 4%

(48% * 10%) - (52% * 4%) = 2.72%

Using a trade size of $12,500, each trade would return you $340 or 2.72% (profit). Lets say this system gives you 200 trades per year; your result would be a $68,000 profit with only 1% of equity risked or $12,500 on $100,000. This doesnt include compounding profits with each successful trade.

A positive expectancy can come from an unlimited amount of numbers or scenarios. You could have a system that produces winners 30%, 50% or 80% of the time and each system could be positive or negative based on PW, AW, PL & AL. An infinite number of trading systems and/or number combinations can be used to find a positive expectancy system.

The one thing I have realized over the past few years as my account grows is the fact that opportunity must exist to make money with a positive expectancy system. Think of the casino; the more you play, they more they win. The same is true for trading; the more you play with a positive expectancy system, the more your odds are for that system to return the expected number.

I have been tailoring my system to produce more trades and opportunity so I can take full advantage of the mathematical odds. As many of you know, I graduated as an architectural engineer and love numbers since my courses were based in advanced math and physics. Numbers dont lie; I love to play poker because I understand the odds so I am typically successful over long stretches of time at the table because I have the emotional stability to only jam the pot when the odds are in my favor. Like stocks, I do my best to let go of losing hands and losing positions (sometimes I follow a committed hand in poker or a committed position with stocks but the odds are no longer in my favor and more times than not, I lose the hand or settle for my maximum stop). I am attracted to games with numbers and odds and the stock market is the best game in the world (in my opinion). Poker is a close second.

I want you to think about one more example (provided from ARB Trading - www.arbtrading.com)

"You will be more profitable with $100,000 that you could "turn" 250 times per year, than $500,000 that was tied up in one trade for 12 months. As an example, let's say we have one trade and that trade yielded a 50% return. You just had a great year - a $250,000 profit.

On the other hand, say you had $100,000 for stock purchases, and your expectancy was only 1.2% per trade but you turned over your stocks 250 times in the same year. This method ends up generating $300,000 for the year, and that assumes you never increase the position size as the equity grows. You just had a better year. And it is easier to get 1.2% per trade than 50%." - ARB Trading

Chris Perruna - http://www.marketstockwatch.com Market Talk with Piranha

Chris is the founder and president of http://www.marketstockwatch.com an internet community that teaches you how to invest your money with solid rules. We offer an extended no obligation monthly trial period starting immediately with two free weeks. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

Online Trading: Where Should I Start?

New to the trading scene? Overwhelmed by all the trading jargon out there and dont know where to start? Dont worry, you are not alone! Virtually all traders go through this experience! Allow me to share my opinion with you.

Where you should start depends firstly on your preference to risk. The tradable financial markets basically get split up into two main categories. The first category is Stocks or Shares and everything else I would classify as Derivatives, which include CFDs (Contracts for Difference), Options, Warrants and Futures (Indexes, Forex, Commodities, Currencies etc).

For those of you who have never traded before, I suggest you start off with trading plain and basic shares or the underlying stock. An example of this would be buying and selling shares in Microsoft. When you buy shares in Microsoft, you own a part of Microsoft. When Microsoft shares go up by $1, then you make $1 for every share that you have purchased in Microsoft. This flip side is also true. When Microsoft shares drop by $1, you lose $1 for every share you hold in Microsoft. Very Simple.

When you get into trading derivatives, the underlying method of trading is essentially the same. You will pick trades in the same way, exit trades in a very similar way, however, there is one major point that you must understand, and that is of leverage. Essentially, with a derivative product, you can control a much larger position size with the same amount of money. That being said, when a position goes in your favor, you make more money, however, when a position goes against you, you also lose more money. This is where money management rules become paramount. I will post an article giving examples of leverage at a later date.

Now that you understand a little about the types of products out there, how do you choose which one to trade. I cant offer you specific advice on that, but I can give you a little guidance.

I started off trading stocks in my home country, Australia. I feel that when you trade local stocks, you have a better connection with them. So if you are from the United States, go with the local markets. Likewise with anybody from any other country.

Initially, I believe you just have to get a feel for how the stock markets work. With a little experience in placing trades, you will get a feel for how volatile your local markets are, what the potential returns are, how frequent do trading opportunities come along and so on. Over time, you will better understand your preference for risk and your style of trading.

I would describe my style of trading as momentum trading. I dont try to pick highs and pick lows, as I believe that that is a very difficult thing to do. My trades range from a few days to a few months long. Trading is my full time job and I trade from home.

I have met many people who get started in trading but have unrealistic expectations to begin with, and lack the discipline to execute their particular trading plan.

My honest belief is that ALL trading systems work, provided they have been proven and tested. The only thing in the way is the human element. More on this topic in future articles.

Still confused? Still dont know where to start? Well, post a comment and I will do my best to steer you in the right direction!

By Peter Yin, http://www.TradingNewbies.com

Niche Marketing - Specialize for Entrepreneur Success!

Niche marketing is the buzz word of internet marketing with good reason. It makes good business sense. Entrepreneur success comes with specialized knowledge and your focused efforts to meet the needs of a specific market.

Remember this specific market will only be profitable if you offer something unique and enough people are willing to spend actual money to solve their problems or meet their needs.

Niche marketing is based on two things. Your special offer AND enough people looking for what you have to offer them.

Notice this is about you. Your own specialized effort. Your own sense of style and service could be enough to help you edge out the competition but the more competition - the more unique you will have to be to succeed.

Already have a business but not making enough money to really call it a "business"... yet? Take stock of what you are doing right now and see where you can whip up your own sense of style. Become an expert. Start with your product or service. Know everything there is to know about it.

This product - who needs it, what do they use it for, where are they buying it now or where are they looking for it, why they want it, how your item will meet your clients need.

Create an ideal client profile for each product or service you offer.

Who needs or want it - general then look at "who needs it most now!" Do you see how your list changes when it make the want urgent... based on NEED first? Who is able to pay for "it" and who is willing to pay the price you've set.

Become an expert of this person. Write down everything you can possibly think of in regards to this ideal "customer." This image you create will guide you through the remaining steps of this exercise.

This ideal client you want to reach...

What EXACTLY does he or she want? What problems or desires will it address? Do they want to buy it? Are they looking for a free or cheap way to get their hands on what they want? Do they worry about price? Does quality outweigh quantity for this perfect customer?

By knowing exactly what type of solutions or desires your ideal customer is looking for, you will be better prepared to meet their need.

Where are they currently getting this service or product? If you offer is a new or unique product or service, look closely at similar items and how readily available they are to your target market. Where would they "shop" to find what you now want to offer?

Why are they looking for it? Why is it important to them? Why should they look to YOU for a solution?

How effective will your item be? How soon do they need it? How badly do they want it? How will they expect to pay for it? How much are they willing to pay? How fast will they expect delivery? How will they hear about it? How will you convince them that you offer precisely what they are looking for?

At first glance, this exercise seems overwhelming but you will quickly see that knowing your product and the people who will buy it is the ONLY way to design your own niche marketing plan.

Work your way through all of your products or services and write out the answer to the questions in all 5 areas above. Only then will you KNOW how to build your business.

Armed with this information you can plan your website, your blog, your sales pages and your content. You will know how to relate to your readers and visitors. You will use your "expertise" to match up the right products and customers. As a specialist in your "field" you will learn how to meet the needs of your clients. Become an expert on your customers.

Too often, I watch home business owners struggle online because they don't understand that the key to having a successful home business is being an avid student of both your product and the people who buy what you offer. Your niche? This specialized knowledge and strong passion that compels you to be always learning in this one chosen area.

The more specialized, the easier it is to stay focused AND be effective. Think of it like MEDICINE.

A general practitioner needs to know a little about everything. A pediatrician needs to know all about children. A pediatric specialist focuses all their reading, conferences and training on ONE main area of children's medicine.

It is the same with auto repair...from a general mechanic to an expert in the maintenance and repair of British imports.

Spend some time thinking about how YOU can grow yourself into the role of EXPERT. Then start - reading books, attending seminars, writing articles and networking.

Your specialty is your niche. Your ideal clients will become your niche market. Your plan to reach these clients is your niche marketing plan.

Find a market with a profitable niche that matches one of your passions (yes, you are allowed more than one!) then develop your specialty. Market your specialized knowledge to your (soon to be) customers and start solving their problems, meet their needs or fulfill their wishes. Start a customer loyalty program AND a referral system. This will help you keep your hard earned customers AND create a steady stream of customers.

THIS is niche marketing. This is when you will find you are no longer a struggling home business owner but an entrepreneur that is finally reaching your target market. That is Success.

To Your Success!

Tammy Ames is the owner of WAHM Connections. She strongly recommends that would be entrepreneurs get their finances organized and business plan written before diving into home business. Subscribe to her weekly online newsletter for opportunities to learn the skills that ensure success!

FX Broker Reviews and Ratings

Are you simply fed up with browsing the internet for finding out the right forex broker? Then what you need is some authentic forex broker rating. Your Forex trading depends on the brokers, as they help you to succeed in the market. Forex brokers are individuals or agencies who help you to gain from the market and to cover the risk of your investment. The brokers help you in managing your accounts, in executing your orders, or to inform you of market trends. So the forex broker rating is what you need before zeroing on the right broker you are looking for.

You will find a number of websites suggesting forex broker rating. There are some criteria, which you must consider to find out a good, dependable broker. Few basic parameters will be to know what is the minimum amount the broker is asking for to open up an account, will there any commission charged, or the facility to operate a mini account etc.

The first thing you need is to identify your personal selection criteria for your forex broker rating. Your forex broker rating criteria must make it sure to confirm that they are registered under the regulatory agencies like Commodity Futures Trading Commission (CFTC) and they have membership in NFA. These agencies are instituted to save investors from the impostors and to stop abusive trade practices, manipulation etc.

Another important factor for rating the forex brokers will be to judge their reputations. If the broker is from an agency you can be more assured, as the broker will be regulated by the agency itself. Your forex broker rating should be formed by evaluating the type of account you want to open, the demo-accounts they offer or the kind of trade platform they have.

Some forex brokers may offer you to open an account with various currencies like yen, dollar, pound, etc. If you have decided to trade in a particular currency, you must be aware of the exchange rates. Forex broker rating should consider the brokerage or the commission asked for. Very few brokers in forex ask for direct commission, and therefore, you should find out what special they are offering in exchange of this commission. Try to find out if the broker is having any signal services, which may influence your forex broker rating greatly.

Leverage is another factor that helps you to succeed in forex trading. So, while rating the forex brokers you have to consider on the fact the amount of leverage they are offering. But one thing you must remember that as you increase your leverage, your risk also increases. In forex broker rating you can look for whether the broker may offer you some customized service either free of cost or with some small subscriptions. Judge the brokers very carefully based on the forex broker rating as the selection can make or break your trading.

To discover the best Forex brokers around please visit FX Broker Rating

Playing With Money - And Making More

Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D.'s? Here are some methods that aren't quite a business because you can do them once, or just whenever you feel like it. Start small and the risk is small.

Loan Sharking

Years ago a friend got a good job when I loaned him $300 to buy the necessary tools. I charged a $6 per week loan fee (don't call it interest) until he paid in full. That's more than 100% annual interest, and yes, we're still friends. Check the laws in your area if you try this, and take collateral. I don't loanshark any longer, but in my early twenties I loaned as much as $2,000 at a time ($100/month loan fee), and only once was stiffed on a small loan.

Investing In Other's Expertise

John showed me several car magazines before I understood why an old fiberglass car was a good deal at $2,300. What's a Corvette? He convinced me to put up the money, and after a new transmission for $900, he sold the 1976 Corvette for $4,300, netting us $1,000. I took half the profit ($500) for putting up the money for the two weeks.

I've done this many times with friends who know cars but don't have cash. Incidentally, if I had paid a $50 cash advance fee and 18% interest to raise the money with a credit card, my profit would still have been over $400, and John did all the work. I love playing with money. Do you have any friends who know about boats?

Buying Estates

My wife and I met a couple who buy out estates, sell some of it at flea markets, then run the rest through auctions. They've made a living at this for years. After negotiating to buy a whole house full of stuff, thay load up their trailer. If they don't want to do the flea market thing, they auction everything on Sunday afternoon for a nice profit.

If you're a good judge of value and have an auction nearby, you could also do this with rummage sales. Offer $100 for everything, then auction it off piece-by-piece. An auction near us lets anyone in, with no fee to enter - just a 25% commission on anything sold.

Playing With The Casino's Money

When I worked the roulette wheel at a casino I saw many people foolishly writing down the numbers that came up. Their theories were mostly nonsense. Casinos welcome these players and even hand them the pen and paper.

One man, however, was actually scientific about it. He found a bias in the wheel, after "charting" it for more than 5,000 spins. A number pays 35 to 1, but one of the numbers, due to manufacturing imperfections or whatever, was appearing 1 in 27 spins, instead of the average 1 in 38 spins.

He bet $10 a spin, and he profited $80 for every 27 spins of the wheel in the long run, or about $100 per hour. Since the ups and downs are dramatic, this is not for the faint-hearted. Even though he made tens of thousands, I saw him lose as much as $700 in a night. Remember too that not all wheels have biases (the casino eventually replaced that wheel). Have you ever tried "card counting" in blackjack?...

Steve Gillman has been studying every aspect of money for thirty years. You can find more interesting and useful information on his website; http://www.UnusualWaysToMakeMoney.com

Yes, Let's Make A Deal!

I received an inquiry the other day from an organization thats inviting me to speak before its staff.

Small problem: they cant pay me my standard fee.

Well, scratch them off them off the list, right?

Wrong.

If Ive learned anything in my consulting career, it is the wisdom in the phrase, Mighty trees come from tiny acorns. A prospect may seem small, but thats only what a snapshot will reveal. Look deeper, and youll start to detect its potential, which can be phenomenal.

Here are seven things that should be considered before we dismiss a potential deal as being impossible to make:

(1)What additional forms of compensation can they offer, besides money?

My dad, an astute businessperson and salesman, was very fond of trading goods and services. For instance, the hot, Black Mustang convertible he drove was traded for advertising time on the radio. (His best trade, from my point of view!)

If you cant do a 100% trade, consider making a deal for part-cash and part-trade. Airlines are often willing to make these arrangements.

(2)Will this experience enable you to penetrate a new market?

Some industries are difficult to break-into. Glamorous movie studios have no problem lining up vendors, and they can be very picky about hiring you, especially if you havent worked in "the biz. So, that inquiry you get from a tiny, independent studio may be just the credential you need to take you from being an outsider to becoming a chummy insider.

(3)A well-managed start-up may be tomorrows mega-firm.

Youre not just a salesperson, a marketer, or a businessperson. Youre investing in your clients in a way, by deciding to expend effort with them. If you think they are on the upswing, start with them on the ground floor. Youll take-off, together.

(4)Provide creative financing.

Defer some of your earnings, as ballplayers sometimes do, in order to allow management to temporarily strengthen its financial condition. Theres a risk, but you can moderate it if you devise a suitable and fair schedule of payments.

(5)Cut quantity, but not quality.

Their eyes may be bigger than their wallets, right now, so see if you can pare back the order, a little. The price will become more modest, but youll still be able to serve them.

(6)Consider sending them to a struggling competitor.

Why help the competition? Youll be taking the high road, and youll make two new friends, at once. And who knows, some day, that competitor may return the favor, or be open to a merger or acquisition overture.

(7)Will I feel better by saying no, or by saying yes?

There is an emotional consequence to making or passing on every deal. I regret having passed on about half of the deals that I thought I shouldnt do. Some would have had tremendous upside potential.

So, the next time you feel that you just have to say no, try your best to say yes, lets make a deal!

Dr. Gary S. Goodman 2005

Dr. Gary S. Goodman, President of Customersatisfaction.com, is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Reach Out & Sell Someone and Monitoring, Measuring & Managing Customer Service. A frequent guest on radio and television, worldwide, Garys programs are offered by UCLA Extension and by numerous universities, trade associations, and other organizations in the United States and abroad. Gary is headquartered in Glendale, California. He can be reached at (818) 243-7338 or at: gary@customersatisfaction.com

Remembering The Obvious

Traders are notorious for making the same mistakes over and over again. They abandon their risk limits. They sell earlier than their trading plan dictates, or hold on to losing trades too long. It's human to make mistakes, but long-term profitability in the challenging field of trading requires firm discipline, which is often hard to maintain. Humans are prone to hesitate and act on impulse. How can you fight impulses? One straightforward method is to develop simple plans and remind yourself as to why you need to follow them.

There are times when we try to make things more complicated than they really are. Humans tend to over-think matters and look for complexity. We may wonder why we make common trading mistakes, and as we wonder, we may search for a "hidden" unconscious reason for it all. Perhaps we secretly feel we don't deserve the profits we make and want to give back what we've made to return everything to the status quo. Maybe we secretly see money as the root of all evil and have trouble accumulating wealth. If you do hold these beliefs, they can severely hamper your trading performance, but not all traders are influenced by such unconscious motives. Sometimes a lack of discipline just reflects a very human inability to make simple plans and follow them.

Psychologists have long noticed that people have trouble following simple plans. Whether it is managing their time, losing weight, or trying to stop smoking, people have difficulty controlling their behavior. One effective strategy is to take a few obvious steps: Make a simple plan, observe and write down the conditions that stop you from following your plan, and remind yourself of the benefits for following your plan. For example, if you have trouble maintaining your risk limits, it could be for simple reasons. You may be tired during the trading day and allow your objective state of mind to hesitate. Or you may get bored during the trading day and want to seek out a little excitement. Whatever it is, it is necessary to outline the specific conditions under which you do the undesired behavior that you are trying to change or control. Once you know these conditions, it will help you anticipate when you are prone to fall prey to them.

The next step is to write down why changing your behavior is important. For example, if you want to avoid risky trades, then you need to write down why it's important to avoid such trades. You might write down on a card, "I cannot afford to keep losing capital or else I will blow out my account." Once you write this fact down, you will have to repeat it to yourself over and over again. Will repetition of this fact guarantee that you will change? Unfortunately, no! But it will go a long way toward making you change. There's something about human nature that is hard to change, but if you repeat the reasons you need to change over and over again, it may stick with you.

Sometimes self-control is just a matter of willpower and reminding yourself you can maintain control if you try. It's like standing in line at the grocery store. If the line is long and there is only one checker available in the whole store that is impossibly slow, you may be tempted to leave, but if you decide that you want your groceries no matter how long it takes, you can convince yourself to wait patiently. You can repeat over and over again, "I'll eventually get out of here if I just wait my turn. I'm determined not to leave." Repeating this mantra over and over again will help you stay in the line. But if you think, "I don't have the time to wait. Maybe I can walk out the door and go to another store," leaving will start to seem like a good idea and you will do it. A similar strategy can be taken with trading. If you want to avoid selling a trade early, it is useful to repeat to yourself over and over again, "Stick with the trading plan. Don't sell until the price reaches my profit objective." Repetition is the key strategy. Repeat what you want to do and remind yourself over and over again why you want to do it. Focus only on the trade at hand, and repeat what you want to do over and over again. It may seem obvious, but it works.

Peter Bain is the Internet's #1 Forex coach and mentor. He is famous for his unique ability to uncover new and innovative ways to harness the power of the Forex. Peter has long been known for his passion for commodity and currency trading. Peter learned trading in the early days of his career from some of the top traders in trading houses. Over the years, he has developed his instincts for a simple yet powerful trading system based on his Pivot Program, which has been continuously refined over the years. His system is the same system used by many trading houses today. For more information, please visit http://www.forexmentor.com

Jim Rogers: How Long Will the Commodities Bull Market Last

We talked, in a taped telephone interview at his home in Singapore, with Billionaire Jim Rogers, legendary commodities trader, who picked the bottom of the commodities bull market in 1999. With George Soros, Jim Rogers co-founded the Quantum Fund in 1970.

Over the next decade, Quantum Fund grew by more than 3,300 percent. Rogers retired, later a guest professor of finance at the Columbia University Graduate School of Business, and still later circumnavigating the globe to firsthand discover new investment opportunities. He is widely and often quoted in the media about his views on the commodities market. Bestselling author, investment biker, adventure capitalist and widely followed, Jim Rogers talks about what he's now investing in.

StockInterview: You began investing heavily in commodities, at very close to the bottom of the cycle. What led you to believe the commodities boom would begin in 1999?

Jim Rogers: I could see that nobody had been investing in productive capacity in crude (oil) specifically. For instance, there had been virtually no offshore drilling rigs built since 1981. There had been virtually no offshore tugboats built to service the offshore rigs since 1981. In the 1970s there were dozens of them built every year. I could see that people had cut back their exploration budgets enormously. It was pretty clear that nobody had been investing for fifteen or twenty year, in looking for new (oil) fields. There hadnt been any gigantic fields discovered since the 1960s. It was clear the world reserves were running down. That had to lead to a bull market. It so happens that I got almost the exact bottom. Im not a very good market timer or trader, but I got within a few weeks of the absolute bottom to my surprise. Then you extend that to nearly everything else, whether zinc mines or lead mines or wheat production or anything else, and you have the ingredients for a new bull market.

StockInterview: Will the recent Central Bank rising interest rate policy, which is intended to deflate the commodities bull market, fail?

Jim Rogers: Well, yes. They may cause recessions, and they probably will. Weve often had recessions. That will affect some commodities markets. But in the 1970s, we had horrible economic conditions everywhere in the world, or nearly everywhere in the world. That did not prevent one of the great bull markets of all time in commodities because supply was going down faster than demand. Remember that these markets are made up of supply and demand. If the supply goes down faster than demand goes down, you still have a bull market. There will be setbacks and consolidations, but thats just the way the world works. All bull markets have corrections, as I have said before.

StockInterview: What has convinced you to stay in the commodities bull market for this long?

Jim Rogers: Throughout history, bull markets in commodities have lasted a long time. Theyve averaged about 18 years or 19 years. The shortest I could find was fifteen years; the longest was 23 years. It takes a long time to bring new production on stream for commodities. If you and I decide to go into the lead business today, weve got to go find a lead deposit. Then, weve got to try to raise money. Weve got to deal with unions, environmentalists, governments and everybody else. And put in infrastructure. It takes on average about ten years for any new mine to be opened these days, not just in the U.S., but anywhere in the world. So, thats why the bull markets last so long. Eventually, new supplies come to market, and the bull markets have always ended. But, it takes a long, long, long time for that to happen. Its not like bringing in new shares of a dot com or something, where we go into the garage and start a company and next week we sell stock. Mines and oil fields are much different animals.

StockInterview: Is the commodities bull similar to the Internet boom of late 1999? Does it have a few more years to run, as strongly as it has?

Jim Rogers: Well, theres a bit difference. As I said before, you and I could go into the garage and start a dot com company and bring it public next month. Thats a little bit different from bringing a zinc mine on stream, much harder to bring new production to commodities compared to some of these other things. I do know, if history is any guide, were now seven years into this bull market in commodities. If its going to last 15 to 23 years, were maybe a third of the way through, so we have another 9 to 16 years to go, I guess.

COPYRIGHT 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterviews Investing in the Great Uranium Bull Market has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

Currency Traders Secret Weapon - Support & Resistance

Do you know why only five percent of all currency traders are successful? Do they know something that we don't? The truth is that successful forex traders use the same technical indicators that you and I use. The difference lies in accurately interpreting these indicators. A common indicator used by forex traders is support and resistance. Let us see how support and resistance are used in forex trading.

Support and Resistance is the foundation of most of the top trading systems. Support and resistance levels represent pauses in the trend when investors reconsider all information. The idea of support and resistance is vital to understanding and interpreting the forex market. Support and resistance are basically price bands where the price will probably stop falling or rising respectively. Support and resistance are created because price has memory. Support and resistance are by far the most important forex trading technical indicator you will ever find, and the best forex trading option if you want to be on the right side of the market.

Support and resistance are like a floor and ceiling, with prices contained between them. Support like resistance is rarely a precise price; it is more often a relatively contained price range, frequently in the vicinity of past technical patterns. Support and resistance levels on bar and candlestick charts are a major component in the study of technical analysis. Support and resistance come in all varieties and strengths. The length of time that a support or resistance level exists helps to determine the strength or weakness of that level. When a level of support or resistance is penetrated, price tends to thrust forward sharply as the crowd notices the breakout and jumps in to buy or sell. When a level is penetrated but does not attract a crowd of buyers or sellers, it often falls back below the previous support or resistance.

Support

Support is defined as a price level below which it is supposedly difficult for a currency pair or market to fall. Additionally it is a price level at which a currency pair or other security stops falling at least temporarily, hence the name. Support represents the level at which buying pressure is strong enough to absorb and overcome selling pressure. Support defines that level where buyers are strong enough to keep price from falling further. Support lines turn into resistance and resistance lines turn into support.

Resistance

Resistance is the opposite of support and represents a price level or area over the market where selling pressure overcomes buying pressure and a price advance is turned back. Resistance defines that level where sellers are too strong to allow prices to raise further. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance.

So we have learned that: Understanding the concept and significance of support and resistance is important for profitable forex trading. One aspect of its unique quality is that support and resistance is defined as an area or a zone not a single price level. One of the basic precepts of support and resistance is that once a support level is violated it becomes a likely new resistance level and when a resistance level is penetrated it becomes a new support level.

Start practice trading using support and resistance on a demo account right away. Go out there and continue to research this indicator as well as other technical indicators. Once you master interpreting forex technical indicators profits will surely follow.

Have you ever desired the income and freedom of being a home based forex trader? Visit the author's (Kenneth Aikens) website for more powerful forex trading information: forex training - forex article directory.

Learn to Calculate a Stock's Pivot Point

Stocks breakout from properly formed bases everyday but many investors dont understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. William ONeil, the founder of Investors Business Daily is considered the pioneer of the pivot point in modern times. As Jesse Livermore explains in his book (1941), the pivot point can also be described as the point of least resistance. When a stock breaks the point of least resistance, we are presented with an opportunity where a stock has the greatest chance of moving higher in a short period of time, especially when volume accompanies the breakout.

The pivot point can be calculated as the stock is forming the handle on a cup-with-handle base. The ideal buy price would be $0.10 higher than the highest spot during the handle, also know as the top of the right side of the base. The intraday high can qualify at the highest point and does not have to be the closing price of the stock. If the stock closes at the high for the day, then we will use this number as the high point.

The exact methods used for finding pivot points vary depending on the base pattern that is forming on a daily and/or weekly chart.

When a flat base occurs, an investor should look for a move $0.10 higher than the top point on the left side of the base or the start of the formation.

A saucer-with-handle follows the same rules as the cup-with-handle and is described in detail above.

A double-bottom formation triggers a pivot point that will be $0.10 higher than the middle peak in the W shaped pattern.

Many investors will try to cheat the rules and place a position prematurely before the stock breaks out and passes the pivot point. I do not suggest buying until the stock triggers the pivot point on above average volume also known as qualifying volume. The area considered as the least amount of resistance is weighed so heavily because all overhead sellers are gone as we break into new high territory. The pivot point usually comes within 5% to 15% of the stocks old high 52-week high.

Dont chase a stock that is 5% or more above the proper pivot point. This does not mean that you cant buy on normal corrections and pullbacks to support or moving averages, especially if the stock remains in an uptrend. This rule only applies to the pivot point area as the stock becomes extended. If you buy with the pivot point and sell when a stock falls 7-10% from the pivot point, I guarantee that your yearly performance will increase dramatically.

Chris Perruna - http://www.marketstockwatch.com

Chris is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

2 Tin Cans and Some String - What You Need to Know to Start an Online Business!

Having been involved with the tech sector since 1980 you would think I was proficient in the ways of starting a businessummmnopeso what that I started my first tech business by selling software for the Deck Rainbow(hmm maybe that was/is my problem). So what that I helped to create and market a software utility that went into 10s of millions of PCs, or the fact that I represented dozens of developers in helping to market their software designs to software publishers or even that I was involved with the start up of an online company that was sold for over 600 Million dollars.cause sister, I got nothing on truly understanding business start ups... EXCEPT that... any time you go to set up a business on the internet or you want to use the net it changes quicklythe technology changes constantly.... the Internet changes constantly and quickly...and this in turn causes the entire world to change. The only thing that does not change as quickly though is the people. While we do change to adapt to the technical changes in our lives, for the most part we stay the same. Why is that important in starting an online business?

Well, I feel the reason is that if you know yourself, you will then come closer to knowing what business you want to start (because after all you do not change as fast as technology). This in turn means that if you also know yourself then you can know the people you want to approach with your business. A question you might be asking is What the hell does 2 Tin Cans and some String have to do with figuring out what kind of business I should start hmm maybe nothing... just a catchy title to draw you in. Or it could mean something that only you can understand. If you have never done this give it a try, as a kid I never had anything that would be considered hi-tech except for a transistor radio

So we would make use of what we hadin building our Tree Fort we wanted to be able to communicate with outsiders, so we would take 2 tin cans and some string and make a whole in the bottom of each tin can(with a nail). We would then thread the string though the hole and have one end in the back door of our home and the other end in the Fort (pulled tight). We could then communicate with whoever wanted to come up. Of course I am sure we could just as easily have yelled or looked out our little window but that wasnt the point. It was that we were creating something, a system of communicationa way to allow those who wanted to talk to us to do so in a cool way. We were Hi-Tech we were cool and we had fun

The same thing goes with creating a businessthe FIRST thing I always tell those that want to start a business and theyre not sure what to do, is to first find out about themselves. What do you like? What is your passion? What are your strengths? What are your weaknesses? I also tell them, whatever you do... do NOT just go and start a business because someone says you can make a lot of money. I do NOT care what anyone says... starting a business for the sake of getting rich will lead to one thing for almost 99.99% of all people and that is failure.

Why is that? Well answer it yourself do you like the IDEA of the business someone just told you about (not of making the money), are you passionate about the business that will make you rich? Do your strengths lend them selves to that business? Will your weaknesses cause the business to grow or fail?

If you answer yes to 3 of the 4 questions then go for it however if your answers is I am in doubt then throw it out! On the flip sidemore often than not an idea that you are passionate about, that lends to your strengths and you know that people will like can be exciting to do. So when the long hours come around, you wont mind that the pay is low to non existentand finally one day when you become successful. It will be because you were passionate and people saw that in you, then the money will come. But only after you take 2 tin cans and connect them together with a piece of string.

Bonus: So I like to cook a lot and I like to pass along some minuscule experience on my cooking..here is one little bit of fun:

Cooking Da Peeg Island style -
So you want to have a taste of Hawaii but live in Medicine Hat, Montana and you find it a little hard to grab the kids and drive to the islanders local favorite restaurant in the North Shore? Well you can try this Pork BBQ to either feed a few family members or the whole Ranch.

Kalua Pig
- this is similar but different from your North Carolinian BBQ(mine is moister). You do start with the Butt of a Pig... NOT THE SHOULDER.... about 10 -15 lbs, take the Butt and cut it into pieces about 2 by 4 inches and lay it in a pan that is about 3-4 inches deep(like a turkey roaster pan)

Take kosher salt and shake it generously all over the meat(pork is very forgiving). You can take garlic powder(I prefer fresh chopped garlic) and spread about 1/3 cup over the meat. Get liquid smoke and place about 1/4 cup over the meat.

Poor into the pan about 2 1/2 inches of water. cover the pan TIGHTLY with foil. Place in the oven at 325 degrees for approx 4-5 hours. You can test it by opening the foil and with a fork see if the meat falls apart. (also if you have a party that is later in the day...you simply turn the temp down to 200 degrees and let it continue to cook...this will easily stay moist for 5 more hours at that temp(just make sure there is at least a little liquid in the pan)

When ready to serve take two forks and shred all the meat mixing it in with the liquids. You can serve this with a spicy BBQ sauce of your making or off the shelf on top of a bun with slaw on the side or on top of the sandwich, or serve it with baked beans, corn on the cob...or if you want it island style..you make sticky rice, mac salad and island slaw(let me know if you want the recipes for these)

Aloha Ya'all

http://onlinebusiness.about.com

A Simple Swing Trading Strategy You Can Put To Use Right Now!

I started to develop a swing trading strategy after 2 years of trying to day trade the EURUSD. I found trading the longer time frames were not only far more profitable but also less stressful and freed up allot of time to do things I enjoy.

A good swing trading strategy must trade with the longer term trend, all we are looking to do is cut our losses short and let our profits run. It must be simple, anything complicated is only making our trading decisions more difficult.

Lets go through what rules I follow and how I identify a good trade. I trade the 4 hour charts with this swing trading strategy, it works well on this time frame and I suggest you do the same.

First we need to find the trend direction on the daily charts, if price starts in the bottom left and finishes in the top right of your screen then we are in a up trend. If price starts in the top left and finishes in the bottom right then we are in a down trend. If you have trouble show the chart to a child they will get it right every time!

Next we have to go back to the 4 hour chart to find an entry point that gives us good odds of price going in our favour. Look for retraces to the 50% fib level that coincides with good support/resistance levels, I also like to target 00 areas as this is what the larger institutions will be targeting for there orders. Remember only take trades with the trend on the daily chart!

Once you have found a suitable entry point set your order with a 50pip trailing stop loss. Please note that if you trade a currency pair with higher volatility then you will have to increase your stop to suit, 50 pip stop is for the EURUSD which is the main pair I trade.

Once your order is triggered just sit back and watch, do not interfere with the trade, you have a trailing stop to do the work for you. As soon as your position is in profit the trailing stop will move up keeping your stop exactly 50 pips behind and locking in any profit along the way.

Although many new comers looking for a swing trading strategy will laugh at this simple system I can assure you that it works. The more you get a feel for the market the more you will profit with this strategy. Trading forex does not need to be difficult, it is the human physiology that makes it hard for people to see profits disappear. Unfortunately this is part of the business and you must focus on the month to month gains not the day to day gains.

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What is Expectancy?

I have been watching as a several people on a forum discuss, argue and lend their ideas about entry techniques. They are going crazy over what the proper entry should be and why one chart pattern is better than the other. One person has even said how they purchased massive amounts of software to help them enter the market. Now dont get me wrong, I always use techniques to get me in the market but I understand that this is the least important factor weighing on an investors overall success. I use technical analysis every day and I study patterns that allow me to enter with the ideal buy point (what I believe to be the ideal entry) but I know that strong up-trending stocks give me just as good a chance to make money as stocks breaking out of a cup with handle pattern. I am one that makes my living buying stocks making new highs so I can basically prove that the random entry strategy does work as long as strong money management and exit strategies exists.

By reviewing my personal trades and the coverage of dozens of stocks on the MSW Index over the past two years, I can tell you that my system with the highest expectancy is buying fundamentally sound stocks that are making new highs on above average volume. Where do I find these fundamentally sound stocks? I use multiple computerized screeners that filter out stocks with increasing earnings, high EPS ratings and increasing relative strength ratings. Once I find these stocks, I narrow them down using my own eyes by performing technical analysis. The process is simple as I am basically looking for stocks making new highs with decent to strong fundamental numbers. The process is almost random. To tell you the truth, I could probably narrow down my buy candidates each week to a list of 20 and throw darts at ten stocks to buy the following week and still have a profitable year because I do use position sizing and strict sell rules. Think I am crazy: think again as I explain what expectancy is.

I responded on the forum by saying: Entering at the right time is important and it can lower your risk and increase your overall expectancy but money management and exits are much more important than entry.

Studies have been done between random entry systems and specific systems that use entries based off of chart patterns with amazing results. The random entry system typically outperforms the structured entry system when it uses money management (position sizing techniques) and a strong exit strategy (assuming that the structured system doesnt employ money management tools).

I love CANSLIM and ONeil but the entry is not the most important aspect you should be focusing on, it is money management and exits. Most people dont want to hear this and that is why so many entry based systems sell so well over the years. How many of those systems actually make their users money? CANSLIM does use a 7%-10% sell stop rule but it ignores position sizing and never explains the probabilities of the system when implemented in certain ways.

As I said, I make money using a system based from CANSLIM (an entry system) but it is heavily balanced with strong money management techniques and a strong exit strategy.

So what is expectancy?

Expectancy tells you what you can expect to make (win or lose) for every dollar risked. Casinos make money because the expectancy of every one of their games is in their favor. Play long enough and you are expected to lose and they are expected to win because the odds are in their favor. Most games at a casino are completed in a short period of time so they can increase their odds of winning. The same holds true for investing. If your expectancy is positive; you can make more money with multiple trades in shorter periods of time. If you told me this ten years ago, I would strongly disagree based solely on beliefs. Now with experience, I continue to move down the path to more frequent trading and a structured system that is run like a business. I now have massive amounts of data based on real trading that I have performed over the past several years.

Expectancy is your profit percentage per win multiplied by your win rate minus your loss percentage per loss multiplied by your loss rate. I will use examples from Trader Mikes: Trading 101: Expectancy (tradermike.net) and Van Tharp's Book: Trade your way to Financial Freedom:

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Expectancy = (PW*AW) less (PL*AL)
PW is the probability of winning and PL is the probability of losing.
AW is the average gain (win) and AL is the average loss

So lets do an example (assume $12,500 per position, a $100,000 portfolio using 1% equity risk):
If my trades are successful 40% of the time and I realize an average profit of 20% but I lose an average of 5%, my expectancy is $625 per trade.

(0.4 * $3,125) - (0.6 * $625) = $625

$1,250-$375 = $625

I lose 60% of the time yet I show a profit of $625 per trade. If I have a system that produces 65 trades per year, I would realize an annual gain of $40,625 (hypothetical scenario). A 40% gain on the original $100,000 (minus all commissions, fees, taxes and compounding).

Trader Mike (tradermike.net) offers an example geared towards a day trader: "As an example let's say that a trader has a system that produces winning trades 30% of the time. That trader's average winning trade nets 10% while losing trades lose 3%. So if he were trading $10,000 positions his expectancy would be:
(0.3 * $1,000) - (0.7 * $300) = $90

So even though that system produces losing trades 70% of the time the expectancy is still positive and thus the trader can make money over time. You can also see how you could have a system that produces winning trades the majority of the time but would have a negative expectancy if the average loss was larger than the average win:
(0.6 * $400) - (0.4 * $650) = -$20

In fact, you could come up with any number of scenarios that would give you a positive, or negative, expectancy. The interesting thing is that most of us would feel better with a system that produced more winning trades than losers. The vast majority of people would have a lot of trouble with the first system above because of our natural tendency to want to be right all of the time. Yet we can see just by those two examples that the percentage of winning trades is not the most important factor in building a system. "
- Trader Mike

Most traders look for three major factors when developing a system:
The right odds or positive expectancy
Multiple trades (opportunity)
Shorter holding periods to compound the profits

Lets look at the calculation one more time using only percentages:
PW: 48%
AW: 10%
PL: 52%
AL: 4%

(48% * 10%) - (52% * 4%) = 2.72%

Using a trade size of $12,500, each trade would return you $340 or 2.72% (profit). Lets say this system gives you 200 trades per year; your result would be a $68,000 profit with only 1% of equity risked or $12,500 on $100,000. This doesnt include compounding profits with each successful trade.

A positive expectancy can come from an unlimited amount of numbers or scenarios. You could have a system that produces winners 30%, 50% or 80% of the time and each system could be positive or negative based on PW, AW, PL & AL. An infinite number of trading systems and/or number combinations can be used to find a positive expectancy system.

The one thing I have realized over the past few years as my account grows is the fact that opportunity must exist to make money with a positive expectancy system. Think of the casino; the more you play, they more they win. The same is true for trading; the more you play with a positive expectancy system, the more your odds are for that system to return the expected number.

I have been tailoring my system to produce more trades and opportunity so I can take full advantage of the mathematical odds. As many of you know, I graduated as an architectural engineer and love numbers since my courses were based in advanced math and physics. Numbers dont lie; I love to play poker because I understand the odds so I am typically successful over long stretches of time at the table because I have the emotional stability to only jam the pot when the odds are in my favor. Like stocks, I do my best to let go of losing hands and losing positions (sometimes I follow a committed hand in poker or a committed position with stocks but the odds are no longer in my favor and more times than not, I lose the hand or settle for my maximum stop). I am attracted to games with numbers and odds and the stock market is the best game in the world (in my opinion). Poker is a close second.

I want you to think about one more example (provided from ARB Trading - www.arbtrading.com)

"You will be more profitable with $100,000 that you could "turn" 250 times per year, than $500,000 that was tied up in one trade for 12 months. As an example, let's say we have one trade and that trade yielded a 50% return. You just had a great year - a $250,000 profit.

On the other hand, say you had $100,000 for stock purchases, and your expectancy was only 1.2% per trade but you turned over your stocks 250 times in the same year. This method ends up generating $300,000 for the year, and that assumes you never increase the position size as the equity grows. You just had a better year. And it is easier to get 1.2% per trade than 50%." - ARB Trading

Chris Perruna - http://www.marketstockwatch.com Market Talk with Piranha

Chris is the founder and president of http://www.marketstockwatch.com an internet community that teaches you how to invest your money with solid rules. We offer an extended no obligation monthly trial period starting immediately with two free weeks. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

How to Spot Market Turning Points Using Free Legal Insider Information

How would you like to be able to take advantage of insider information and trade with the most successful traders in energies commodities, stocks and commodities?

Well you can - with the commitment of traders report, published by the CFTC. This report shows insider commercial trading positions by professional hedgers!

The commitment of traders report is available FREE, but hardly any traders use it - yet it can predict tops and bottoms, with amazing accuracy, when used correctly.

What is the Commitment of Traders Report?

Insider trading is legal in futures markets as long as trading positions are reported to the CFTC and the report covers stocks, bonds, currencies and commodities.

The Commitments of Traders Report breaks down the open interest in major futures markets into three categories:

1. Commercials: They own the commodity and trade it for a living.

2. Large speculators: Are a group that hold large positions, and are legally obliged to report them - these traders are normally funds or asset managers.

3. Small speculators: Everyone else - but mostly small individual traders.

Every year many markets make extreme price runs - both up and down, where prices move far above, or below rational pricing.

This is crowd psychology at work - with the emotions of greed and fear to the fore.

Trader psychology is a critical element in trading, and traders very often push prices too far away from fair value - and a counter trend can occur at any time.

These emotional crowds form along lines provided to traders that are broken down by the CFTC report for easy reference:

1. Commercials: They are using their futures positions, to hedge their cash position - and are trading without emotion, as they are hedging risk, and not speculating.

These traders have an edge in fundamental supply and demand information - and have deep pockets, and a long-term outlook.

When price spikes occur they will fade the move - selling into price spikes, and buying into declines.

As they are hedging, they will only change their positions when prices move significantly away from value.

If you see large scale selling in a bull market, or aggressive buying in a bear market, chances are a trend change is at hand. This is especially true, if speculators, large and small, oppose these moves by holding the opposite view.

Large Speculators: This category is dominated by funds that make their money to a large degree based on their ability to sell a story, and greed to investors. These large speculators tend to have a poor performance overall as a group, and normally are caught at major trend changes - and lose heavily.

Small speculators: The poorest traders of all in terms of track record. Small speculators lack inside information, and this crowd tends to trade on the emotions of hope, greed, and fear - tending to be WRONG at every major turning point.

So, How do we Use the Data?

Small moves in commercial positions are not relevant - they own the commodity, and these moves should be ignored.

It is only when commercial positions buy and sell aggressively, that we know prices are away from fair value.

One point to keep in mind: We are ONLY looking at extremes here - and rapid changes from the commercials position, away from small, and large speculators. Once you see this, you can time your entry into the market, with normal technical tools.

Try using this data and you will see when major trend changes are right - the commercials are normally right - small, and large specs wrong!

Trade with the smart, professional, and savvy traders - the commercials.

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

Online Futures Trading How to Trade Futures for a Living

Online futures trading is one of the few ways traders can start with small stakes, and build real wealth quickly - and the opportunity is open to anyone.

Everything you need to know about futures trading can be self-taught - using the Internet. As with all ventures in life, theres a right way to do it.

Many traders fail because they dont have a realistic plan - and thats what this article is all about having a plan that will make you huge profits by trading futures the right way.

Here is a simple step-by-step plan:

Start with the Right Attitude

If you start with the attitude, that making big money is easy, and that someone else can give you success - you will fail. The good news is that while its not easy, by working smart, the effort you put in will bring rewards.

The right attitude, means you need to learn the basics - and think you will succeed. If you think you can succeed in online futures trading then you will.

This means having confidence and taking responsibility for your actions. If youre going to be rich, you have to do it yourself.

Getting Started

To get started in trading futures on the Internet, you need the following:

. A computer.

. An Internet connection.

. A charting software package.

You can learn all the basics free on the net about contract sizes, how to place orders, etc. - the real key is having a method - and being able to execute it with discipline.

Your Trading Method

Markets trend long term - and your aim must be to catch these trends - as the big trends yield the big profits.

Forget day trading - its the big trends you want - and the way to catch them is to use a breakout method.

Breakout systems work - and have worked for hundreds of years, being based on human psychology. Most traders wont use a breakout system which explains why 90% of traders lose money. This is good news for you - because if you use a breakout system correctly, you can win at futures trading - and win big!

Applying a Breakout Method

To apply a breakout method to futures trading, you need to apply the system with discipline - and this is where most traders fail. Most traders dont have the confidence to stick with their system - but you will, if you learn the basics of human psychology.

Theres some great books you can read Market Wizards, and The New Market Wizards by Jack Shwager, also, any books by Larry Williams, Jake Bernstein, Ken Roberts, and Dr Van Tharpe.

Applying Your Method for Maximum Profits

This is where most traders go wrong when futures trading - many traders have good methods - but cant apply them with discipline.

They also fail for two other main reasons

1.They lack staying power.

2.They dont understand money management.

Many traders want to take as little risk as possible - and they always get stopped out - you need to take risks to make big gains! Its a fact of life. This doesnt mean that you should be rash - but when you see a trade - take a calculated risk.

With the above method, you wont be trading a lot - but when you do trade, youll be trading the best opportunities.

Staying Power

You need to be able to stay in the trade - and not get stopped out. Theres no better tool than options. You need to use options in the right way though with plenty of time value - and buy them at, or close to the money.

Isolation

When trading futures, 90% of traders fail - so separate yourself from the losing herd - and trade in isolation.

Its vital you stay focused - a lot of the time, the news, and other people, will be telling you that youre wrong. Its essential to stay focused - most traders get swayed by others you mustnt be swayed.

So, there you have it - a simple blueprint for making money, by trading futures on the net.

Apply the above concepts, and you could enter the elite minority of traders, who win at futures trading - and win BIG!

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

Online Futures Tradings

The futures markets are organized and used not only for speculation but also for hedging, which is a method of eliminating risks arising from fluctuations in prices. Hedging may be referred to as the practice of covering the risks attaching to transactions in the cash market by contra-transactions in futures trading. If a commodity is purchased for delivery after three months in the cash market, where the actual commodity is handled, the trader may hedge the purchase by selling it for delivery after the same period in the futures market.

If the price of the commodity rises, the trader may sell in the spot market and buy in the futures market. The gain made in the cash market is offset by loss in the futures market, and the commodity is obtained at the price originally conceived for it. On the other hand, an agreement to sell in the cash market may be hedged by means of a counter-agreement to buy in the futures market. However, for such offsetting of losses, it is necessary that the prices in the cash and futures markets move in sympathy with each other.

There may be two forms of hedging: hedge sale and hedge purchase. When a person buys a commodity in cash, he may at the same time sell futures of an equivalent quantity as a protection against a fall in price during the time he holds such stock. Such sale in the futures market is called a hedge sale. If a manufacturer sells some goods for cash, he may protect himself against an advance in the price by purchasing futures for an equivalent quantity.

The basic purpose of hedging is to secure protection against fluctuations in prices. This protection is secured by shifting the risks of price changes to the professional risk-takers, i.e., speculators. A manufacturer who manufactures goods according to a carefully prepared budget can save him from the upsetting results of a rise in the prices of raw materials by hedging in the futures market.

Futures Trading provides detailed information on Futures Trading, Online Futures Tradings, Futures Trading Software, Commodity Futures Tradings and more. Futures Trading is affiliated with Stock Day Trading.

The Professional Traders Mindset

Professional traders devise a system they know inside out, they tested every aspect of there system and know its win%.

A professional trader will accept responsibility for there mistakes and not blame it on the market.

Professional traders have a system that fits there personality. They are one with there system and trade it like a machine regardless of the pips generated. Just because a system is profitable does not mean it will be profitable for you. You must find a system that fits your schedule and your life style.

Professional traders have a set of rules to follow in there trading plan. They plan the trade and trade the plan. It is vital to you trading success that you have a solid trading plan, one which you can follow without question.

Professional traders work hard and are constantly learning about the markets. Read every book you can get your hands on about the forex markets. Start with 'Interviews with market wizards'.

Professional traders have a positive self belief. They know they are born to be a trader and nothing anyone can say will convince them otherwise. If you do not enjoy trading then you are not made for the job. A professional trader loves the business and would do it even if it paid minimum wage.

Professional traders do not focus on the money they think in pips. Thinking about the money will only affect your judgment of your trading decisions.

Professional traders trade as a part of a balanced life. They make time for things they enjoy. Don't reject your loved ones in order to take some extra trades.

Like any professional job some people do better than others and some take longer to do it. I firmly believe that anyone who has the determination can make it big trading forex. All you have to do is study hard, work hard and demo, demo, demo.

Once you are consistently profitable over a 3 month period you should open a very small live trading account and continue your trading for a further 3 months to see the results. If all si still good you are ready to take a shot with a standard trading account.

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What's a Professional Sales Manager?

I was in the depths of a major depression. As a third year salesperson with a good company, I was doing well, and was on my way to becoming the top salesperson in the nation for that company. But business had slowed down a little, and I didn't have my usual number of proposals out for consideration. So, I wasn't as busy as usual. As my activity slowed, I began to worry. My doubts increased to the point where I had thought myself into a real depression, stuck on the question of "What's the use of trying?" The more negative my thoughts became, the less energy I had. My lack of energy led to fewer and fewer sales calls, which of course, led to less activity. And that led to more depressing thoughts. I was caught in a powerful downward spiral.

It was then that I caught a glimpse of what a professional sales manager is like.

Ned was my boss -- a sales manager of the highest caliber. He could see the symptoms of my sour state spilling over into everything I was doing. So Ned intervened. He arranged to have lunch with me, and listened patiently as I rambled on and on about my problems, my doubts, and my lack of activity. Finally, after I had dumped all my depression and negative thoughts on him, he looked me straight in the eye and said, with all the authority and resolve of someone who is absolutely sure of what they are saying, "Kahle, that's enough."

I was stunned. I was expecting empathy, an understanding shoulder to cry on. Instead, I got a simple, straightforward mandate. Ned knew me well enough to cut through all the fluff and come right to the heart of the matter. He said, "That's enough. That's enough feeling sorry for yourself. That's enough thinking all these negative thoughts. That's enough sitting back and not working as hard as you're used to. Stop it. You're better than all this. Stop it right now, today, and get your ..... back to work."

He saw my situation clearly. And he provided me the direction I needed. That conversation turned me around. I left my depression and negativity at that lunch table, and started back into my job with a renewed sense of the possible. A year later I was the number one salesperson in the nation for that company.

What made the difference in my performance was the skillful intervention of an astute and professional sales manager. He made the difference in my job performance, and that made a difference in my standing with that company. And that made a difference in my career. And that lead me to my current practice. It's entirely possible that I would not be doing what I do now, speaking and consulting with sales forces around the world, if it weren't for his timely intervention.

All of us have become what we are, at least in part, due to the impact other people have had on us. A professional sales manager is gifted with a rare and precious opportunity -- the opportunity to play a pivotal role in the lives of his/her charges. I so value the role that Ned played in my career, that the last paragraph on the "Acknowledgment" page of my first book reads, "Finally, I must make special, post-humus acknowledgement of the contribution made by Ned Shaheen, the best manager I ever worked for. It was Ned who, years ago, urged me to 'write the book...'"

So what does this have to do with being a "Professional Sales Manager?" During my 30 + years of sales experience and 16 years of experience as a sales consultant and sales trainer, I've encountered many sales managers. Some of have been good, many mediocre. But Ned was the best sales manager I ever met. He serves as a model for me. We can learn a number of lessons from him.

First, Ned knew the difference between the job of a salesperson and that of a sales manager. He had been a great salesperson -- like many sales managers around the world -- and had been promoted to sales manager. Yet he knew the jobs of sales manager and salesperson are completely different. A salesperson is responsible for building accounts and making sales. A sales manager, while ultimately responsible for the same results, understands that his/her job is to achieve those means through other people. A sales manager builds people, who in turn build the business. Salespeople focus on selling; sales managers focus on building salespeople.

As a sales person, I could comfortably take Ned into any account, secure in the knowledge that he wouldn't try to take over the presentation or usurp my relationship with the customer. I knew Ned was more concerned with me than he was about any one sale.

Ned knew that a salesperson was essentially a loaner, an individual who did most of his/her most important work by themselves, while a sales manager was a coach, whose only success derived from the success of his team. A sales manager's best work is always done, not with the customers, but with the people he/she supervises.

Ultimately, a sales manager is measured by the results achieved by his people. Sales, gross profits, market share, key product selling, -- all these typical measurements of sales performance are also one of the rulers by which a sales manager is measured.

So, an excellent sales manager, like a great soccer coach, is ultimately measured by his numbers. It doesn't matter how empathetic he is, nor how his players respect or like him, if year after year he produces a losing team. So it is with a sales manager. Ultimately, an excellent sales manager produces excellent numbers for his company.

In the five years that I worked for Ned, my own territory grew by $1 million a year, and the branch for which he was responsible grew from about $6 million to about $30 million.

Ned was excellent at one of the key competencies of the professional sales manager -- he had an eye for talent. He knew how to hire good people. After all, he hired me! Over the years, I watched him take his time, allowing a sales territory to go vacant for months, if necessary, while he waited for the right person to bubble up through his pipeline. Only one of his hires didn't work out -- which gave him an incredible winning percentage.

A professional sales manager understands the importance of making the right hire, is always recruiting in order to keep the pipeline of prospective salespeople full, and spares no expense to make sure the person he hires meets all the necessary criteria. When I was hired, I went through four interviews, and a full 10-hour day of tests with an industrial psychologist.

With all the time he took to make sure he was hiring the right person, Ned confided in me one day that, "It is more important to fire well then it is to hire well." He went on to explain that hiring sales people is an extremely difficult task, and that even the best sales managers fail at it frequently. Therefore, it was important to recognize your mistake quickly, and act decisively to fix it.

A professional sales manager, then, understands that when it is clear that a salesperson is not right for the job, he acts quickly, kindly, and decisively to terminate the individual, allowing both the individual and the company an opportunity to find a better match. Acting quickly to terminate a salesperson who isn't working out is both good business as well as good ethics. To allow a mediocre situation to fester to the detriment of the company, the salesperson, and the customers is to persist in a dishonesty.

Understanding that he works only through his sales people, and that he has the opportunity to make a great impact on his people, a professional sales manager makes it his business to know his people. Ned spent days with me in the field, talking not only about business, but also working at understanding the person I was as well. He'd arrange to meet me for breakfast or lunch regularly, even if he weren't spending the day with me. He wanted to get to know my wife as well, and paid close attention to her opinions. Several times over the five years we went to dinner as a foursome.

I could never stop in the office without being expected to sit in his office and talk about things. And, of course, there was the annual pig roast at his house, where all his salespeople and their families were invited to spend a fun day while the pig roasted over the spit. I was always a person to Ned, never just a "salesperson."

Because he took the time to get to know me, he was equipped with the knowledge of exactly how to best manage me. And he always saw the potential in me, and was ready to correct me when necessary. In the first year of my employment, I was earning the reputation among the inside customer support and purchasing people of being difficult and demanding. I was a hot-shot superstar who didn't take their feelings into consideration, and came into the office and dumped work on them. Ned let me know that my ways needed to change. At first, I didn't pay much attention. My numbers were too good for anybody to be concerned. So Ned let me know a second time that I was going to have to change. The situation was so acute, that the operations manager was lobbying to get me fired! Guided by his firm hand, I swallowed my pride, adopted a more humble attitude, and bought all the customer service reps a six pack of premium beer as a gift. My stock inside the company spring up dramatically, my ways corrected, and my future assured.

A professional sales manager guides and corrects his charges in order to help them achieve their potential.

Ned never stopped learning. He would often tell me about seminars he'd attended, books he'd read, or ideas he'd picked up by talking with other people. He knew that he never "knew it all." So it is with every professional sales manager. A real professional never stops learning. He understands that the world is changing rapidly, continually demanding new skills, new ideas, and new competencies from him. At the same time, his salespeople and their customers are changing also. So, he understands that he has a challenge to continuously grow and improve, to learn more and become btter at his job. Sales management isn't just a job, it's a challenge of a lifetime of improvement.

One more observation. Understanding that a professional sales manager is only successful when his charges are successful, an excellent sales manager supports, encourages and gives his sales people the credit.

It was the fourth year of my tenure, and Ned was lobbying for me to be awarded the "Salesperson of the year" award. It was given not only for sales performance, but for more subjective things - supporting the company's objectives and ethics, getting along with other people in the company, etc. The award was a great honor, and extremely difficult to win. Each sales manager nominated their favorite salesperson, and lobbied for one of their charges with the company's executives, who made the final choice.

The annual awards banquet was held at an exclusive country club, where the men wore tuxedos and the women formal evening gowns. When dinner was done, the speeches were finished and the lesser awards announced, it came time for the big one, the one I wanted.

The climate was tense and expectant. The entire room silent as the time approached for the announcement. Then, as the company president announced my name, it was Ned who thrust his fist in the air and shouted "YES!"

The photograph that hangs on my bedroom wall shows me shaking hands with the president and accepting the award. Look carefully and you'll see Ned standing proudly in the background.

There is a song that I find particularly moving. Perhaps you know the words made popular by Bette Midler. It goes like this, "It must have been lonely there in my shadow... Without the sun upon your face I was the one with all the glory You were the one with all the strength.

I can fly higher than an eagle Because you are the wind beneath my wings." Want to excel as a sales manger? Want to be a true professional? Look at your job as a unique opportunity to impact others, to select, correct, support and encourage your salespeople, to achieve your company's objectives by become a positive force in their lives. It's not a job, it's a mission. Be the wind beneath their wings.

And perhaps, one day, fifteen years from now, someone will write about you.

About Dave Kahle, The Growth Coach:
Dave Kahle is a consultant and trainer who helps his clients increase their sales and improve their sales productivity. He speaks from real world experience, having been the number one salesperson in the country for two companies in two distinct industries. Dave has trained thousands of salespeople to be more successful in the Information Age economy. He's the author of over 500 articles, a monthly ezine, and four books. His latest is 10 Secrets of Time Management for Salespeople. He has a gift for creating powerful training events that get audiences thinking differently about sales.

His "Thinking About Sales" Ezine features content-filled motivating articles, practical tips for immediate improvements, useful resources and helpful tips to help increase sales. Join for NOTHING on-line at http://www.davekahle.com/mailinglist.htm

You can reach Dave at:
The DaCo Corporation
3736 West River Drive
Comstock Park, MI 49321
Phone: 800-331-1287 / 616-451-9377
Fax: 616-451-9412
info@davekahle.com
http://www.davekahle.com

Baby Boomers - Build It With The Intention Of Selling It

Today, everyone talks about acquiring assets. For the past ten years, Real Estate has been the "golden child" of the asset game. When low interest rates combined with significant tax savings, Real Estate took a well deserved top position in the game. Unfortunately, the definition of an asset is too often overlooked. An asset is only an asset if it puts money into your pocket every month. In a world where interest rates could continue to climb, and Real Estate values are changing course, the number one asset contender is beginning to slip. So, some of the attention is beginning to shift to retirement accounts and small business ownership.

Retirement accounts are growing like no other time in history. It seems that the stock market has no choice but to respond by breaking new highs almost daily. Sure, there will be dips and corrections from time to time, but with all that cash flowing in each month, the trend is expected to continue in an upward trajectory. To the asset-starved public, this seems like the new Real Estate boom. No one can predict the future, but as they say, "History does tend to repeat itself." If all of your assets are in the stock market at the time of a significant correction, or worse, a crash, what then? Years of saving and watching assets grow could be minimized if history does indeed repeat itself.

Another trend that needs watching is the approaching retirement of the Baby Boom generation. After a short stint of travel and relaxation, many boomers will become bored. The siren of owning something will call out to them, offering another challenge to be conquered. The method they will choose is small independently owned businesses. This potential asset, I feel, will become the growing rage in the next ten years.

So, when is a small business an asset? A small business is only an asset when it puts money in your pocket every month or when it serves as a form of real estate when you sell it. Why is this important? It is important, because most small businesses are never started with the intention to be sold. The usual agenda is simply making some side money. That is a fundamental flaw in the plan. There are rules to selling a business, and you need to be conscious of them before you dive in.

Rule number one:

People buy proven systems--not a business built around the owner.

Rule number two:

People will pay a multiple of earnings--not "good will" or what you think your business is worth. They want to see the income not the income potential.

Rule number three:

Whenever possible, buy the building your business is in, because doing so serves a dual purpose. First, it allows you to sell the business without any complicated leases that have to be transferred. Second, if you sell the business but retain the real estate, it allows you to have an asset after the profit from the sale of the business is long forgotten.

Selling your business is both a science and an art. If you remember these rules, this road will be much easier to navigate.

Bob Scott specializes in coaching, solutions and systems for small business owners and is the author of the book, Small Business Pain. A devoted consultant and a dynamic speaker, Bob KNOWS how much you want to succeed, and he UNDERSTANDS how much you have at stake. He has experienced, first hand, how the weight of business reality and a lack of guidance can slowly crush the hope inside every single business owner. His WISDOM and INSIGHT can guide you over the many hurdles of small business so that you don't have to take the time to stop, brush yourself off and build up the courage to face the next hurdle. Bob see's your potential, and he helps you generate solutions and systems for your business. Perhaps the biggest small business secret that Bob will share with you would be: You don't have to build it alone! For more information about Bob Scott and his services, visit our website: http://www.smallbusinesspain.com or to schedule a complimentary consultation email Bob at bob@smallbusinesspain.com.

Taking the Path from Debt to Wealth

Look for the Source of Debt

You may be way over your head with unpaid bills and debt payments you just cant catch up with. It might be just the right time to look for the source of all the trouble. Its like looking for the source of bleeding and stopping it there. For some people it may be that credit card and the unplanned monthly purchases. For many, credit cards are a necessity, but if its causing you a lot of trouble, either forgo it altogether or keep it under lock and key for awhile.

Maxing Out on Debt Payment

When youve had an inventory on what debts you still owe, decide to just scrimp a little and maximize on your debt payments. There is nothing like trying to get rid of a terrible sore at the soonest possible time. If you have a little extra thats not for your savings account, then allocate it for advanced payments on some debts. Youll find that youll feel better psychologically if you're done paying debts earlier.

Redefine Your Goals

The best key to turn debt to wealth is to look at yourself and change both your attitude and your goals. While youre at it diligently paying for your debts, ask yourself what you want in life. Try asking too what it personally takes to get there. More than technical skill and knowledge, it takes confidence and discipline in yourself and the willingness to take risks. Build a new mental framework along these lines and proceed with redefining your goals. Tell yourself that you dont want to die impoverished or without anything to leave your kids and grandchildren. Tell yourself that you want to retire early or that even if your retiring at 60, you want to be able to provide well for your needs and wants at that age.

Start Saving and Investing

Of course, there is no other way to turn debt to wealth but to simply start saving and investing. Dabble with the stock exchange and try your hand at real estate and marketing. Aside from using your extra money to pay for debts, make sure that you allocate some of it for sound investments that will allow good quality passive income to come pouring in.

There can be a thousand other ways to turn debt to wealth but the real key is in you. Decide to take your life into your own hands and take action.

Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at:

http://www.stressfreetrading.com

Kuala Lumpur Stock Market Outlook - Forecast for the Day - 27 June 2007!

Profit-taking depressed local market. But Dow should stage rebound on Tuesday night.

Technically speaking:

1. As at Tuesdays close at 1366.99 the KLCI was lower by 10.14 points or 0.74%. Losers led gainers 648 to 286.

2. The lower close is a dampener especially after a breakout into new highs last Friday.

3. But as chartists one should expect the unexpected. In other words, if the KLCI should fall further to and violate its lower Bollinger band, one should consider exiting the market at 1348 or lower.

4. But until then, it is possible for the KLCI to stage a rebound.

5. Until the present circumstance, we would be cautious and not buy further.

6. We would wait-and-see and wait for a rebound before adding more positions.

7. Stocks-to-watch for today will, understandably be low. They are: LMCEMT and YTLCMT.

8. We were right about TRANMILE going down to hit the floor. We hope you have exited this stock as based on technical analysis it can make lower lows.

9. We observed that the local stock market moves in tandem with the strength of the ringgit. For the market to rally we would want to see a stronger ringgit. Right now the ringgit is weak.

CONCLUSION: Although it is too early to call a trend reversal, the local market has taken a beating from sellers as funds sell out for fear of further weakness from the U.S. markets. But the technical of the Dow do not seem to suggest that a market plunge is near. Instead we are seeing a Dow rebound. If so, we expect the KLCI to rebound in tandem.

Long-term Upside Targets:1492 (Target amended on 15/6/07).

Immediate downside targets: 1334/1291/1222

Fred Tam is the owner of http://www.fredtam.com and http://www.picapital.com.my F1 Trader Online - Know when to enter & exit the markets.

Why Trade in the Forex Market?

The Foreign Exchange Market (FOREX) is three times larger than the total amount of the stocks and futures markets combined. It is becoming more and more popular.

Because there is neither physical location nor a central exchange for FOREX it can operate 24 hours, moving across the time zones from one financial center to another, from Monday to Friday.

There are great opportunities in the FOREX market because of the constant movements of the exchange rates. The currencies are always traded in pairs, and traders can make profits both when the prices go up and down. There is always good market trading opportunity for a FOREX trader in any economic outlook.

Everybody can learn how to trade in FOREX. Of course the importance of proper education and training before entering live trading cannot be overestimated. Without it the chance of success is almost zero. Fortunately everybody can practice with a demo account before entering live trading. The good thing about FOREX is that the amount of money someone needs to place a trade (known as "margin") is all that can be lost.

Of course, with the proper self-taught education traders will win more than they will lose, but everybody should know that despite the high leverage of FOREX trading (200:1 is possible, which means that when a trader puts up $1 the trading vendor will allow the trader to trade it as if the trader had $200), its still less risky than futures (commodities) trading. And when someone trades stocks he or she cant get this type of leverage. Margin is low and leverage is high, so there is possibility of big profits (but losses, too).

There are no commissions in FOREX. No exchange fees, no government fees, no brokerage fees and no clearing fees. There are no middlemen, too. Clients interact directly with the market.

Unlike in other markets it is possible to start trading with only $100 with a mini-account. The transaction cost is very low and the FOREX market is the most liquid, so the trader can enter or exit it in almost any condition.

Because of the FOREX markets liquidity and twenty 24 hours continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed very quickly, without slippage. With a good research it is easy to find good brokers, who will automatically close some or all of open positions if the accounts equity falls below the level required to hold the positions. It is impossible to lose more than the amount of money in FOREX account.

Everybody can trade online from home. It is a great possibility for people who want to work from home, but dont like selling and marketing. All that is needed to start trading is a computer with Internet access and a proper training.

Because the FOREX market is so huge, there is no possibility of someone controlling the market price for a long time. There is no possibility of insider trading and the governments influence is very limited. Trading currencies is much simpler than stocks. There are only a few major currency pairs. No need to think which of thousands of stocks to trade.

There is no waiting for months like in futures market. Trades in FOREX rarely exceed two days.

The enormous marketplace of FOREX will grow bigger as more people are joining it every day.

To start learning more about FOREX visit: http://www.currencytradingmethod.com

The author is a currency trader and internet marketer. His website: http://www.currencytradingmethod.com

Bookkeeping Basics For Your Business

Many of small business owners would rather focus on making and selling their products than on keeping their books and records. However, bookkeeping is just as important as marketing and doing business. Many a great business ideas has failed due to a poor bookkeeping system. And ultimately, won't be keeping up if money going out is more than money that is coming in. Apart from business owners desire to stay in business, two other reasons why book keeping system is most important are:

1. Legal requirement.
2. Bookkeeping records are an excellent business management tool.

Good basic accounting system will provide useful information that will enable you to run your business proactively rather than reactively when it comes to important financial decisions.

Many of business still operate using checkbook and receipts. Its more efficient to go with an automated system, and there are now many bookkeeping software packages on the market. Most of the account software systems dont require CPA to operate and interpret it. Most of the windows account software is very user friendly.

Most business use one of the two basic accounting methods in their bookkeeping systems: Cash basis and accrual basis. Cash basis is the simplest one between the two and is used for small business. Income is recorded when it is received, and expenses are reported when they are actually paid. From tax point it is sometimes advantageous for a new business to use the cash basis accounting.

With accrual method, income and expenses are recorded as they occur, regardless of whether or not cash actually changed hands. Credit sales are excellent examples of this. How to decide which book keeping system should use? Auditor is best source to do that. The accrual method is required if your business sales exceed $5 million and your business is structured as corporation. Business with inventory must use this method. This is highly recommended for any business that sells on credit, as it more accurately matches income and expenses during a given period. Where as cash basis is may be appropriate for a small, cash basis business or a small service company.

Accounting system has the following key components:

1. Chart of accounts.
2. General Ledger.
3. Accounts receivable.
4. Inventory.
5. Fixed asset management.
6. Accounts Payable.
7. Payroll.

This is the first article in the series of articles which explains the need for bookkeeping for any business to run effectively. This article explained the basic of accounts, Account system components.

Second article explains Account key component definitions. What is cost of accounting? As a manager of business what precautions should be taken to avoid employee theft?

More details on:

• General Ledger entries.
• Accounts payable and Sample
• Accounts receivable and sample.
• Requirements from IRS on bookkeeping.

Third Article describes in detail about creating financial statements [Income statement, Balance sheet, Cash-flow statement. Cashflow statement analysis] with samples. Stay tuned for the 2nd and 3rd Article in the coming weeks.

S.V Bharath Reddy , is one of the founders of The Cashflow Crunchers, a web site for Investors and Smallbusiness to share investing tips and other information. For more articles, tips, and free online calculators, please visit http://www.cashflowcrunchers.com