What 2012 Will Bring

2011 left us with many lessons, namely, currency can be deadly.
The simplest hedges against the declining dollar and the US federal reserves monetary policy has been caught in trouble. Causing the loss of billions of dollars and upsetting even the more respected bankers on Wall Street.
One of the best performing currencies of 2010, the Brazilian real lost ground sharply.
The Euro zone was left in uproar as the countries managing the crisis continue to find solutions to bail out the countries in great peril.
However, if you study 2011 you may be able to see opportunities which are being presented this year.
But firstly, lets look at which currencies should be religiously avoided.


Lets first start with the Euro. The strength of the Euro is such that if the crisis were confined to Greece and Portugal the currency would remain strong. The system is set up in a way to support struggling countries by the strength of greater countries. Unfortunately the crisis is much more widespread. Economic upturn has spread to Spain and Italy, both of which are far to large for the Euro zone to bail out. This leaves the Euro zone in a precarious position.
In the same way that it is set up to secure the financial future of smaller economies, the suffering is also spread through the larger economies. Many economists are predicting that the Euro zone will have no choice but to fall apart, securing the economies of the strong economies by separating them from the weak ones. If this happens the Euro value will drop as it gets fazed out.
The Euro zone destruction may create opportunities, but more about that latter.

The Japanese Yen has been an excellent performer over the last few years. Since 2007 it has risen in value by 50% US dollar and despite the disasters of 2011 rose 6% over the year. However, Japan relies heavily on exports and at this high value exports are suffering. The Government is likely to take actions to reduce the value to encourage the market. The Government is also suffering from a debt of over 200% GDP which is become seriously worrying.
The Yen may still rise and there might still be money to be made, however, anyone thinking of investing should be very careful. The yen should be treated as unsafe.

The British Pound may also face trouble. The British Government has a deficit as large as Americas and the economy is quite reliant on the financial services.
The Bank of England has announced a quantitative easing program equal to the $2trillion program of the united states.
The Pound will be effected by the American economy, if the US comes into more trouble so will the Pound.
That said there is some good news for the Pound, they have managed modest debt repayments which encourages confidence in its economy.

The Swiss Franc made a lot of ground during 2011 and looked set to continue into 2012 however, the Swiss government have made it clear that they intend to print money in order to ease its gain.

If you steer clear of these currencies you should remain relitivly safe.
That said I would encourage you to do research of your own, remember, economists aren't always right.

Forex, Steps To Improve your Trading

I'm going to take my previous blog further now by giving you some steps and tips to follow when you start trading currencies.
The difference between successful traders and unsuccessful traders is planing. If you fail to plan you plan to fail. Successful traders have set procedures which they follow each time they invest.






Firstly,

Choose currency pairs which operate in the way you wish to trade.
Some currencies value is sporadic and changes many times per day while others are far more steady, making slow progressive movements up and down in value over a extended period of time. Your safe bet is always the slow yet steady, however, this means potential profits will be less often.
Once you have made that decision the next is slightly easier and to a degree has already been made. How long will you hold your position? This could be as little as minutes or as long as weeks.
Next you need to consider what you will do if your investment makes or loses ground faster than expected? At which rates will you sell? This is your exit strategy. Once you have decided on this be sure to follow it accordingly.

Analise the markets.
Forex offers a lot of great resources to help you get an idea of how the market is going to perform. Do your research, study graphs read relevant news articles. There are also a number of other websites which offer comprehensive research for free, XE.COM is one of the best ones.

Keep track of what you have done
It can be difficult to keep track of your investments, especially when you begin trading more that one currencies at a time. A good habit to get into is to keep a diary. Set up your diary so that it is easy to read and understand, consider the following things each time you make an investment and entry:
The date and time you bought, the rate you bought for, your reason for investing how you did, your strategy including your exit, the time you sold, the rate you sold, the gain or loss on your investment.
 The diary will help you spot potential successful trading patterns which may come up again in the future.

Manage your risk
There is always a risk in every investment, it is important to manage this so that if the worst happens you aren't left in an awful situation.
Forex offers a number of safeguards for traders, it allows you to set reserves for currency
movements so that if something happens while you aren't at your computer you will automatically sell.
This is a great feature because it can be set to your exit strategy limits and so stops you losing more money than you had anticipated without you knowing.

Currency Exchange, A High Return Investment

So you have achieved your savings goal and now have a few thousand dollars to play with. Where do you go from here?
The currency exchange market is an excellent way to turn your few thousand dollars into many thousands of dollars.
The foreign exchange market (forex, FX, or currency market) is a global, worldwide-decentralised financial market for trading currencies. Financial centres around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The foreign exchange market is different from stock markets for a number of main reasons.

its huge trading volume representing the largest asset class in the world leading to high liquidity

its geographical dispersion;

its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday;

the variety of factors that affect exchange rates;

the low margins of relative profit compared with other markets of fixed income; and

the use of leverage to enhance profit and loss margins and with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks. According to the Bank for International Settlements, as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion, a growth of approximately 20% over the $3.21 trillion daily volume as of April 2007. Some firms specialising on foreign exchange market had put the average daily turnover in excess of US$4 trillion.

The record for the highest profit achieved through currency exchange was George Soros who made $1billion in one day.

There are a number of ways in which you can go about dealing currencies. The most popular of which and my recommendation is Forex.com. They offer a lot of information and resources as well as giving you predicted market movements which really takes the effort out of currency exchanging.
Although there are many other institutions which offer very similar packages, you may find that one will suit you better.

Remember be cautious, take your time and do your research. Despite Forex having already done all of your research it can help to do your own. Remember there is always an element of risk with this and don't think just because George made $1billion in one day you will.
For your convenience I have found a great video on youtube which will give you an introduction to Forex.com if you are interested in what we have been talking about today I would recommend you watching it.

Get On Your Way To Succsessful Investing

When looking at investing many people think, I don't have enough money to invest, you need thousands of dollars if you want to make any good return. This is not true.
If you have a regular income and can survive a pay period without spending it all then you are already investing.
Boring though right?
Wong.
Saving money is an essential component to investing and there are several steps which need to be taken to optimise the amount of money you save and once done you will see your savings increase exponentially.
Make A Goal
Goals are very important. The questions you need to ask yourself are, how much do I want to save? and over what period?
Budget
Before you can put anything away you need to know how much money it will take for you to live on. You should come to an amount which isn't so large that it will effect your quality of life. Anything is better than nothing and a few dollars per week add up over time. Remember to think about your goals here, it may be necessary to rethink them.
Choose A Bank
You will already have a bank account which you use for everyday things, for instance, receiving payments, shopping. Do not consider using the same bank to open your new savings account. By choosing a different bank you can not link your accounts which means there are no instant money transfers between your savings and regular accounts. The more inconvenient it is to access your savings the less likely it is that you will be tempted to.
Choose An Account
Banks these days can offer some excellent interest rates which really help boost your savings. All the research you need can be done online when selecting the bank account you want to open. Firstly look for accounts with a high interest rate (usually around 6% is the highest, but that said don't settle for the first account you see offering that.) Another important factor is how the interest is compounded and paid. Look for an account which compounds daily and pays monthly, that maximises the amount of interest you earn. And of course compare any fees and conditions which may be associated with the account (many saving accounts have a minimum amount that you need to save in order to receive that months intrest.)
Cut Up Your ATM Card
You Will likely receive an ATM card for your new savings account. Cut it up. As I said earlier the more inconvenient it is to access your money the less likely you will.
Let The Money Flow
Each pay day put amount of money you worked out earlier into the account. It is important to not put more than you can afford it. Its better to put less in at the beginning of the pay cycle and to wait to see if you have any left when the next cycle comes around. If you put to much in and then need to withdraw some you may miss out on that months interest.
Remember interest earned is free money.
Watch Your Money Grow
Very soon your money will begin growing. Regular weekly payments plus monthly interest will allow you to watch it before your very eyes.
You are now making regular payments. Congratulations on your first investment!




I have attached a video below which I think does a good job as recapping what I have discussed here and it focuses more directly on online only banking accounts.

Free Money, Smart Investing

The concept of free money is one which is thrown around a lot today. The idea that you can make an income by doing absolutely nothing is of course fantasy, however, making income from doing very little, or just doing something once is quite achievable. This is known as passive income.
The ways in which people do this are vastly different ways, indeed there are quite literally hundreds of ways in which a regular income can be achieved from doing very little.
The purpose of this blog is to enlighten, inform and encourage you in all things investments.