By.- http://www.ProfitableStockMarket.com

It’s no secret that online trading can be a very lucrative, yet highly competitive field, and the truth is that the stock market doesn’t care if you are an experienced or a beginner trader.

The rules and the opportunities are the same for everyone, so either you are going to make money when you pick a stock and make a trade or you are simply going to lose it in favor of the more seasoned ones.

It won’t matter if we are in a recession or we have a great economy. Gamblers and ignorants loose money consistently either way. While experienced and Profitable traders make money in good or bad times. The trick is to learn how to do it.

As a stock trader your homework is all about studying and testing different market strategies that can help you take advantage of stocks while at the same time protect your gains.

Just always keep in mind that a good strategy is simple and practical. Complicated stock systems will always make you slow in your decision making process or confuse you from the start.

A trader must always read as much as he can. There is simply no other way to prepare one self for this difficult yet incredibly rewarding activity, but to read and put into practice as much ideas as you can, at least by paper trading first.

The are a lot of books on the subject that pretend to help you, however many of them where written 6 or 8 years ago and that kind of makes them obsolete in this constantly changing field.

Fortunately there are some practical stock trading sites on the web where you can access proven trading strategies that are easy to implement. One of those sites is http://www.ProfitableStockMarket.com      

They focus on stock trading methodologies that can help you identify and take advantage of certain stocks with momentum, while limiting your risk.

Visit them today and improve your stock trading potential in 2009.



By: stock trading basics

About the Author:

Fetal Development

BY.-  http://www.MomentumStockPick.com

 

The stock market should present you with a wide variety of NEW hot stocks in 2009. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That’s why it’s very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market, especially on uncertain times like these.

You don’t necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.



By: Best Stocks to Buy

About the Author:

Bunk Beds

When trading goes right, it can be a great feeling. When trading goes wrong it can be a nightmare. Fortunes are made in a matter of weeks and lost in a matter of minutes. This pattern repeats itself as each new generation of traders hit the market. They hurl themselves out of the night like insane insects against some sort of karmic bug-light; all thought and all existence extinguished in one final cosmic “zzzzzzt”. Obviously, for a trader to be successful he must acknowledge this pattern and then break it. This can be accomplished by asking the right questions and finding the correct answers by rational observation and logical conclusion.

This article will attempt to address one question:

“What is the difference between a winning trader and a losing trader?”

What follows are eleven observations and conclusions that I use in my own trading to help keep me on the right track. You can put these ideas into table form, and use them as a template to determine the probability of a trader being successful.

OBSERVATION # 1

The greatest number of losing traders is found in the short-term and intraday ranks. This has less to do with the time frame and more to do with the fact that many of these traders lack proper preparation and a well thought-out game plan. By trading in the time frame most unforgiving of even minute error and most vulnerable to floor manipulation and general costs of trading, losses due to lack of knowledge and lack of preparedness are exponential. These traders are often undercapitalized as well. Winning traders often trade in mid-term to long-term time frames. Often they carry greater initial levels of equity as well.

CONCLUSION:

Trading in mid-term and long-term time frames offers greater probability of success from a statistical point of view. The same can be said for level of capitalization. The greater the initial equity, the greater the probability of survival.

OBSERVATION # 2

Losing traders often use complex systems or methodologies or rely entirely on outside recommendations from gurus or black boxes. Winning traders often use very simple techniques. Invariably they use either a highly modified version of an existing technique or else they have invented their own.

CONCLUSION:

This seems to fit in with the mistaken belief that “complex” is synonymous with “better”. Such is not necessarily the case. Logically one could argue that simplistic market approaches tend to be more practical and less prone to false interpretation. In truth, even the terms “simple” or “complex” have no relevance. All that really matters is what makes money and what doesn’t. From the observations, we might also conclude that maintaining a major stake in the trading process via our own thoughts and analyses is important to being successful as a trader. This may also explain why a trader who possesses no other qualities than patience and persistence often outperforms those with advanced education, superior intellect or even true genius.

OBSERVATION # 3

Losing traders often rely heavily on computer-generated systems and indicators. They do not take the time to study the mathematical construction of such tools nor do they consider variable usage other than the most popular interpretation. Winning traders often take advantage of the use of computers because of their speed in analyzing large amounts of data and many markets. However, they also tend to be accomplished chartists who are quite happy to sit down with a paper chart, a pencil, protractor and calculator. Very often you will find that they have taken the time to learn the actual mathematical construction of averages and oscillators and can construct them manually if need be. They have taken the time to understand the mechanics of market machinery right down to the last nut and bolt.

CONCLUSION:

If you want to be successful at anything, you need to have a strong understanding of the tools involved. Using a hammer to drive a nut in to a threaded hole might work, but it isn’t pretty or practical.

OBSERVATION # 4

Losing traders spend a great deal of time forecasting where the market will be tomorrow. Winning traders spend most of their time thinking about how traders will react to what the market is doing now, and they plan their strategy accordingly.

CONCLUSION:

Success of a trade is much more likely to occur if a trader can predict what type of crowd reaction a particular market event will incur. Being able to respond to irrational buying or selling with a rational and well thought out plan of attack will always increase your probability of success. It can also be concluded that being a successful trader is easier than being a successful analyst since analysts must in effect forecast ultimate outcome and project ultimate profit. If one were to ask a successful trader where he thought a particular market was going to be tomorrow, the most likely response would be a shrug of the shoulders and a simple comment that he would follow the market wherever it wanted to go. By the time we have reached the end of our observations and conclusions, what may have seemed like a rather inane response may be reconsidered as a very prescient view of the market.

OBSERVATION # 5

Losing traders focus on winning trades and high percentages of winners. Winning traders focus on losing trades, solid returns and good risk to reward ratios.

CONCLUSION:

The observation implies that it is much more important to focus on overall risk versus overall profit, rather than “wins” or “losses”. The successful trader focuses on possible money gained versus possible money lost, and cares little about the mental highs and lows associated with being “right” or “wrong”.

OBSERVATION # 6

Losing traders often fail to acknowledge and control their emotive processes during a trade. Winning traders acknowledge their emotions and then examine the market. If the state of the market has not changed, the emotion is ignored. If the state of the market has changed, the emotion has relevance and the trade is exited.

CONCLUSION:

If a trader enters or exits a trade based purely on emotion then his market approach is neither practical nor rational. Strangely, much damage can also be done if the trader ignores his emotions. In extreme cases this can cause physical illness due to psychological stress. In addition, valuable subconscious trading skills that the trader possesses but has no conscious awareness of may be lost. It is best to acknowledge each emotion as it is experienced and to view the market at these points to see if the original reasons we took the trade are still present. Further proof that this conclusion may have validity can be seen in even highly systematic traders exiting a trade for no apparent reason, and pegging a profitable move almost to the tick. Commonly, this is referred to as being “lucky” or being “in the zone”.

OBSERVATION # 7

Losing traders care a great deal about being right. They love the adrenaline and endorphin rushes that trading can produce. They must be in touch with the markets almost twenty-four hours a day. A friend of mine once joked that a new trader won’t enter a room unless there is a quote machine in it. Winning traders recognize the emotions but do not let it become a governing factor in the trading process. They may go days without looking at a quote screen. To them, trading is a business. They don’t care about being right. They focus on what makes money and what doesn’t. They enjoy the intellectual challenge of finding the best odds in the game. If those odds aren’t present they don’t play.

CONCLUSION:

It is important to stay in sync with the markets, but it is also important to have a life outside of trading. It is a rare individual who can do anything to excess without suffering some form of psychological or physical degradation. Successful traders keep active enough to stay sharp but also realize that it is a business not an addiction.

OBSERVATION # 8

When a losing trader has a bad trade he goes out and buys a new book or system, and then he starts over again from scratch. When winning traders have a bad trade they spend time figuring out what happened and then they adjust their current methodology to account for this possibility next time. They do not switch to new systems or methodologies lightly, and only do so when the market has made it very clear that the old approach is no longer valid. In fact, the best traders often use methodologies that are endemic to basic market structure and will therefore always be a part of the markets they trade. Thus the possibility of the market changing form to the extent that the approach becomes useless, is very small.

CONCLUSION:

The most successful traders have a methodology or system that they use in a very consistent manner. Often, this revolves around one or two techniques and market approaches that have proven profitable for them in the past. Even a bad plan that is used consistently will fair better than jumping from system to system. This observation implies that stylistic foundations of a trader’s market approach must be in place before consistent profitability can occur.

OBSERVATION # 9

Losing traders focus on “big-name” traders who made a killing, and they try to emulate the trader’s technique. Winning traders monitor new techniques that come on the trading scene, but remain unaffected unless some part of that technique is valuable to them within the framework of their current market approach. They often spend much more time looking at how the market seeks and destroys other traders or how traders destroy themselves. They then trade with the market or against other traders as these situations arise.

CONCLUSION:

Once again, we can note that the individuality of a trader and his comfort level and knowledge regarding his system are far more important than the latest doodad or Market guru.

OBSERVATION #10

Losing traders often fail to include many factors in the overall trading process that affects the probabilities of overall profit. Winning traders understand that winning in the markets means “cash flow”. More cash must come in than goes out, and anything that effects this should be considered. Thus a winning trader is just as thrilled with a new way to reduce his data-feed costs or commissions as he is with a new trading system.

CONCLUSION:

ANYTHING that affects bottom line profitability should be considered as a viable area of study to improve performance.

OBSERVATION #11

Losing traders often take themselves quite seriously and seldom find humor in market analysis or the trading environment. Successful traders are often the funniest and most imaginative people you will ever meet. They take joy in trading and are the first to laugh or relate a funny story. They take trading seriously, but they are always the first to laugh at themselves.

CONCLUSION:

Its no wonder that one of the first things psychiatrists test for when treating a patient is whether or not the patient has any sense of humor about his affliction. The more serious the tone of the individual, the more likely that insanity has set in.

SUMMARY OF CONCLUSIONS AND OBSERVATIONS

Both winning and losing traders consider trading a game. However, winning traders take the game not as a diversion but as a vocation which they practice with an intensity and dedication that rivals the work ethic of a professional athlete. Since the athletic metaphor seems appropriate, I will sum up on that note.

If trading were a game like basketball perhaps novice traders would realize more readily that what appears as effortless ease of the professional trader in sinking three-point shots is in fact the product of endless hours spent shooting hoops in deserted back yards and empty playgrounds.

As in sports, the governing factors are internal and external. We deal with the market and ourselves. Both are like weapons and they can be used pro actively or destructively. Each and every trade should be taken with professional care and planning

In order to bring these observations home in an even more compelling form, lets add an element of ultimate risk to life and limb and say that our “sport” is more like target practice with a handgun. While it is certainly important to hit the target, it is more important to make sure the gun isn’t pointed directly at ourselves when we pull the trigger.

Minute differences in how we take aim in the markets can have amazing impact on the final outcome. The difference is clear: One method is accurate target practice. The other is Russian Roulette.



By: Nicci Barnes

About the Author:

Make Money at Home

Marl the stock trading robot is a new stock picking software developed by Michael Cohen at DoublingStocks. It has certainly gain a lot of attention since it claims it can accurate predict penny stock movements.

So is Marl stock trading robot scam?

Well, to answer that questions, it is important to learn more about the doubling stocks newsletter program. By the way, because it cost so much money to develop the penny stock robot program, when you subscribe to doublingstocks, you don’t actually get to use Marl.

Instead, Michael will email his subscribers for the best penny stock picks weekly based on predictions from Marl the stock trading robot.

I think this is a better arrangement as the program is pretty complex and a lot of people would have problems using it if Michael have simply given it as a penny stock tool. It would also take some learning as well as the user having technical stock trading experience to be able to use it to its full potential.

So what is supplied with the weekly penny stock picks and are they winners?

Every week, you will be given between 7 to 10 penny stock picks to place trades with your broker or do it yourself online. They will provide a detail explanation of why a particular penny stock is chosen, when to buy and when to sell based on the price point.

So this makes it a dumb proof way of allowing even the most novice penny stock trader to make money in penny stocks.

Of course not every trade and every pick by Marl the stock trading robot is going to be a winner but so far from my own experience, you can get 7 out of 10 penny stock picks to be winners every week.

DoublingStocks is suitable for novices who are interested in making money in penny stocks but aren’t too proficient in penny stock trading. It is also suitable for people who are busy and simply don’t have the time to sit down and analyze penny stock trends all day.



By: Ricky Lim

About the Author:

Bulldogs

Markus Heitkoetter wrote:


You can have the best daytrading plan but you’ll never make any money if you don’t take action and actually start trading. But how can you start without risking a single penny of your own money?

After all, you are still new to trading and don’t want to lose thousands of dollars because you made a small mistake in your trading plan, do you?

The best thing you can do to get started is to get a so-called “Paper Trading Account”. And the best: You can get a paper trading account for free from your broker. Or just contact me and I’ll set you up with a free paper trading account.

So what is a paper trading account?

A paper trading account let’s you trade your system with “virtual money”. You will get live quotes and can enter the trades according to your plan. The daytrading system will simulate fills, and you’ll find yourself in a trading position. Paper trading accounts show the profit and loss in real time, and you can see LIVE how much money you are making or losing. Keep in mind that we’re talking about “virtual money”, so actually you’re not making any money yet.

Why you MUST trade your day trading system on a paper trading account first.

The biggest enemy of a trader is discipline. Traders lose because of the lack of discipline. Your day trading plan might be excellent, but if you don’t have the discipline to follow your trading plan then you’re doomed. Trading your system on a paper trading account will help you to gain confidence in your daytrading system and developing the needed discipline to actually make money with it.

Don’t make this mistake

Many traders start “improving” their trading system after they experienced a loss or a few losers in a row. Though encountering a loser might be exactly within the expectations of your system, you start questioning the system. You start “improving” the system by changing a few parameters or adding some filters. You forget that you tested your system on more than 2,000 trades; you traded it for a few days and think that’s it needs some “fine tuning”.

That’s the biggest mistake a trader can make. If you developed your system based on the outline I gave you in Step 1 and tested it against the principles I gave you in Step 2, then most likely you have a robust daytrading system.

Keep in mind that trading a system does NOT mean having an ATM in your front yard. Losses are part of our business, and NO trading system has an equity curve that’s straight pointing up without any dips. You need to trade your system for at least 40 trades before you should think about modifying it.

How to become a successful trader

In order to become a successful trader you need a trading plan. After reading thus far you already figured that out, did you?

Equally important is having the discipline to follow the plan.

Lack of discipline is caused by your emotions, basically greed and fear:

You fear losses and if you’re experiencing a winner you become greedy. And that’s when you start tampering with your system: You might want to give your trade “a little bit more room” and increase the stop, or you want to “get a few dollars more” and start moving your profit goal. And BOOM: You just lost the discipline you need.

By watching your trades on a paper trading account you will learn a lot about yourself and how to deal with emotions:

• Can you “pull the trigger” when your entry signal appears?

• How do you feel when you see the trade moving against you?

Do you feel the urge of moving your stop loss?

• How do you feel when the trade makes a profit?

Do you want to get out?

Do you want to stay in a little bit longer?

• Do you have the discipline to trade your system according to your rules?

Trading a system on a paper trading account will help you:

• Watching yourself and your feelings.

• Helping you dealing with your feelings.

• Developing the discipline you need to become a successful trader.

• And of course: testing your trading system under “realistic” market conditions

A neat trick to increase your learning curve

The best way to trade your system is to fully automate it!

By automating a system you’ll immediately gain these four advantages:

Advantage #1: Discipline

The easiest way to follow a trading plan is to automate it. Almost every trading system can be automated, and you could let the computer trade for you. You won’t have to worry about your discipline any longer, as the computer mechanically trades every setup for you.

Advantage #2: Controlling your emotions

Automating a system removes emotions from trading. If you don’t automate your strategy try to make decisions when the market is moving, you are liable to become emotionally attached to positions. You may experience panic and indecision when the market does not move in your favor, as you do not have a prepared response. That’s when most traders lose their money. If you automate your system the computer will trade for you no matter what the market does.

Advantage #3: Controlling your losses

You probably have heard the saying Let your profits run. Unfortunately most traders let their losses run. Automating a trading system will get you out of a position when the predefined stop is hit. Unless you override the system to give the trade a little bit more room the computer will stop the loss and therefore limit your losses.

Advantage #4: Commitment

You won’t believe how many traders show a lack of commitment and therefore lose money. Lack of commitment means that they stop trading after the first loss, and don’t give their system a chance to make back the money they lost. Trading is not a one-way street, and losses are part of our business. If you can’t accept the fact that there will be losses, you shouldn’t trade. Fortunately the automation of a trading system can help you to overcome this problem; an automated trading system continues trading according to the rules, and therefore adds much more consistency to your trading.

The next step

If you read until here, then you learned a lot. By know you know

• How to define your financial and trading goals.

• How to select the right market for your trading goals.

• What timeframe you should trade in.

• The difference between trading styles and how to find the right one for you.

• How to create a basic trading plan.

• How to make sure that your trading plan will work in reality

• How to start trading your system without risking a single penny

• What it takes to become a successful trader

• How to develop the habits of successful traders

• A shortcut to become a successful trader

Now the ball is in your court. It’s up to you to take the first step.

If you want to get started within the next 24h, then you should definitely check out the trading systems Smart Start and EaglePro.

Both systems are fully automated, and they have a risk/reward ratio that’s perfect for beginners. Each system comes with a free paper trading account that lets you test the system risk-free.

It’s your turn now.



How to Lose Weight

 

INTRODUCTION

The explosive growth of international financial transactions and capital flows is one of the most far-reaching economic developments of the late 20th century. Net private capital flows to developing countries tripled – to more than US$150 billion a year during 1995 to 1997 from roughly US$50 billion a year during 1987 to 1989. At the same time, the ratio of private capital flows to domestic investment in developing countries increased to 20% in 1996 from only 3% in 1990. Hence, this has effected a shift from the national economy to global economies in which production and consumption is internationalised and capital flow freely and instantly across borders.

Powerful forces have driven the rapid growth of international capital flows, including the trend in both industrial and developing countries towards economic liberalization and the globalisation of trade. Revolutionary changes in information and communications technologies have transformed the financial services industry worldwide. Computer links enable investors to access information on asset prices at minimal cost on a real time basis, while increased computing power enables them to rapidly circulate correlations among asset prices and between asset prices and other variables. At the same time, new technologies make it increasingly difficult for governments to control either inward or outward international capital flows when they wish to do so.

In this context, perhaps financial markets are best understood as networks and global markets as networks of different markets linked through hubs or financial centres.

All this means that the liberalisation of capital markets and with it, likely increases in the volume and volatility of international capital flows is an ongoing, and to some extent, irreversible process.

It has contributed to higher investment, faster growth and rising living standards. But this can also give rise to shocks and stresses resulting in financial crisis as we have all witnessed in 1997 and 1998.

Testimonies to the risks of open capital markets are the several waves of instability in the financial markets in early 1998 and again in the wake of the Russian crisis in August/September 1998. To illustrate, net private capital outflows from the five countries most affected by the crisis, namely, Indonesia, Korea, Malaysia, Thailand and the Philippines rose to US $28.3 billion in 1998, reflecting mainly the decline in net bank and non-bank lending. Meanwhile, foreign direct investment which had been one of the main sources of growth during the pre-crisis period in these countries remained sluggish in 1998, amounting to US$8.5 billion as compared to an average amount of US$17.8 billion during the period 1995 to 1995.

Global trade has experienced a slowdown over the past two years due to trade contraction of East Asian economies. Generally, world GDP and trade growth slowed in the past 1997/1998 as the East Asian crisis deepened and its repercussion were felt increasingly outside the region. Asia recorded the strongest import and export contraction in volume and value terms of all regions of the world. The dollar value of Asia’s imports registered an unprecedented decline of 17.5%. The five Asian countries most affected by the financial crisis that broke in mid-1997, that is, Malaysia, Indonesia, Philippines, the Republic of Korea and Thailand experienced import contraction by one-third.

In the context of these powerful trends, I like to discuss a few significant the issues relating to them, particularly from a capital market regulator’s perspective. Given the breadth of the topic at hand, and in the interest of keeping to time, please allow me to focus particularly on current trends and difficulties faced in the capital markets.

DEVELOPMENTS IN ELECTRONIC COMMERCE AND CAPITAL MARKET REGULATION

Developments in computer and information technology have made dramatic changes to the way the financial services industry operates. These changes are affecting and will affect every aspect of the financial services industry and offer the possibility of reduced costs in raising capital, greater efficiencies in the mobilisation of domestic and international savings and the provision of better, cheaper investment products more closely tailored to the needs of different investor segments. The convergence of computer and communications technology is promoting the development of computer mediated networks, allowing for users to communicate and transmit data and other information regardless of boundaries and distance. As communication costs continue to fall, the potential of outsourcing grows.

These changes will affect –



The way investment products are offered, distributed and marketed and the way in which investors access information about the products and entities involved;

The activities of financial services intermediaries, especially advisers, and the way they deal with investors;

The continued blurring of product and institutional boundaries, and even the scope of financial services sector itself as non-traditional entities take on some of the functions of financial intermediaries;

The methods of distribution and marketing of investment products which will increasingly draw upon the techniques of mass marketed consumer products; and

The way secondary trading in investment products takes place as greater scope for direct investor transactions and low cost competitors to established securities and futures markets becomes more of a reality.



Just as electronic commerce affects investors and providers of financial products and services, it will affect the role of corporations and capital market regulators. Just as electronic commerce facilitates activities across jurisdictional borders, it poses in clear terms questions about the practical enforceability of national laws. As well as practical enforcement questions, electronic commerce also raises issues about the role that capital market regulators should play and the effectiveness of many of the traditional regulatory approaches and mechanisms that have been employed by them. An example might be an offering of securities made without a prospectus or registration statement on the Internet by a person in a jurisdiction with which the capital market regulator has no regular contact or mutual enforcement arrangements. There are also concerns about illegal and fraudulent activity on the Internet.

In this regard, the Malaysian position is that it is committed towards a structured development of electronic commerce. Towards this end, Malaysia has proposed to introduce a National E-Commerce Masterplan. This Masterplan should focus on key initiatives which will create momentum in trading via e-commerce. Besides looking at developing the technological infrastructure such as telecommunications infrastructure and systems providing for electronic delivery of goods as well as payment, the Government is also aware that there are legal and regulatory issues which will arise with regard to e-commerce. Malaysia has introduced several sets of laws catered towards proper regulation of e-commerce known as ‘Cyberlaws’. The Cyberlaws which have been introduced include, among others :

(i) Computer Crimes Act 1997

This Act provides for a framework to counter computer offences such as unauthorised access to computer material, crimes of fraud and dishonesty through the computer, unauthorised modification of contents of a computer and so on. The Act is not limited by jurisdiction. It has effect outside as well as inside Malaysia. Where a computer crime is committed outside Malaysia in respect of computers or data in Malaysia or that which may be connected to or used in Malaysia, the crime may be treated as a crime within Malaysia and the perpetrator may be dealt with under the provisions of this Act; and

(ii) Digital Signatures Act 1997

This Act addresses issues of security and authenticity of electronic transactions and it allows for greater confidentiality and integrity of messages. It allows for businesses to use electronic signatures instead of hand-written counterparts in legal and business transactions. The Act provides for the treatment of document signed with a digital signature created in accordance with this Act to be treated as legally binding as if the document was signed with a handwritten signature.

The development of an effective regulatory framework is essential in attracting and maintaining confidence for the world in trading with Malaysian counterparts via electronic means. The regulatory framework as it stands is currently incomplete as many other areas such as electronic banking and broking are still in the process of development.

To instil confidence, Malaysia must be able to provide for regulatory certainty and coherence as well as prevent regulatory capriciousness. In relation to financial services, a major consideration is cross-border implications. The Securities Commission, as an example, is currently looking at issues relating to Internet offering of securities and fund management and broking services over the Internet. A re-examination of current laws would need to be conducted to ensure that they have not been overtaken by technology and to restructure the laws so that they are technology neutral.

As far as the capital market is concerned, the Securities Commission recognises that electronic commerce is an area where it is important that the regulatory infrastructure responds in a positive and timely way to facilitate market developments and not hinder innovation in market products and processes. We believe that there are important benefits to be gained through the Commission’s facilitation of market developments in this area for the competitiveness of the Malaysian capital market, efficiencies in the operation of our capital markets and the better making of investors at lower cost. At the same time, the Securities Commission considers that it is important for the successful implementation of electronic commerce that investors retain confidence in the integrity of the market for investment products.

LIBERALISATION VS. PROTECTIONISM

On the issue of liberalisation vis-à-vis protectionism, there has been a proliferation of multi-lateral trade agreements since the middle of the century. Such agreements provide for a framework of rules within which nations are ‘obligated’ to assure other nations signatory to the agreement of a sovereign’s approach towards international trade. For example, Malaysia is a member of, among others, the World Trade Organisation through which it is a signatory to the GATS (General Agreement on Trade in Services) and GATT (General Agreement on Tariffs in Trade), APEC as well as ASEAN, all of which have the objective of achieving liberalised trading of goods and services within specified, albeit not immediate, time frames. Through these trade blocs, Malaysia has committed itself to progressive liberalisation which essentially entails a gradual opening of the economy to foreign participants.

The globalisation of economies is intrinsically linked to the internationalisation of the services industry. It plays a fundamental role in the growing interdependence of markets and production across nations. Information technology has further expanded the scope of tradability of this industry. Access to efficient services matters not only because it creates new potential for export but also it will be an increasingly important determinant of economic productivity and competitiveness. The main thrusts of the ‘services revolution’ are the rapid expansion of the knowledge-based services such as professional and technical services, banking and insurance, healthcare and education. Responding to this phenomenon, regulatory barriers to entry in service industries are being reduced worldwide, either through unilateral reforms, reciprocal negotiation or multilateral agreements. Developing countries such as Malaysia are increasingly looking at foreign direct investment in services as an especially powerful means of transferring technical and managerial know-how, besides attracting foreign capital and investment to the country.

Malaysia has made a commitment under GATS under legal services covering advisory and consultancy services relating to home country laws, international law and offshore corporation laws of Malaysia. Under the GATS commitments, commercial presence of foreign legal firms is not available except in relation to the Federal Territory of Labuan and in such a case, their services are limited to legal services given to offshore corporations established in Labuan. However, there are no limitations placed on the provision of legal service cross-border, that is, provision of such service from a foreigner without having a legal presence in Malaysia. This may be done via fax, telephone or the Internet. As stated before, most aspects of legal services does not need the physical presence of the service provider except perhaps where a court appearance is necessary. Furthermore, a Malaysian may obtain legal services abroad without any limitation either.

Malaysia is also signatory to the ASEAN Framework Agreement on Trade in Services (AFAS). The AFAS is an agreement made within the auspices of the GATS. In very basic terms, commitments under AFAS are GATS-plus which means that liberalisation of trade is accelerated within the ASEAN region under the AFAS as compared to the world at large under GATS. Its ultimate aim is to achieve regional integration and free flow of services within the region. In achieving integration and free flow of services within the region, many issues would need to be ironed out. Issues such as harmonisation of professional standards, acceptable levels of accreditation between member countries, movement of labour in relation to provision of these services, licensing and certification of service suppliers are still under intense discussion within the Member Countries. Taking into account the different levels of economic and regulatory maturity of Member Countries within the ASEAN, it is understandable that it would be a long process of consultation before a consensus may be achieved.

LIBERALISATION OF CAPITAL ACCOUNT

A most obvious impact of globalisation of trade are pressures exerted on developing nations to liberalise their financial markets and capital accounts. However, it is important to recognise that domestic and international financial liberalisation heighten the risk of crises if not supported by prudential supervision and regulation and appropriate macroeconomic policies. Domestic liberalisation, by intensifying competition in the financial sector, removes a cushion protecting intermediaries from the consequences of bad loan and management practices. It can allow domestic financial institutions to expand risky activities at rates that far exceed their capacity to manage them. By allowing domestic financial institutions access to complex derivative instruments it can make evaluating bank balance sheets more difficult and stretch the capacity of regulators to monitor risks. External financial liberalisation in allowing foreign entry into the domestic financial markets may facilitate easy access to an abundant supply of offshore funding and risky foreign investments. A currency crisis or unexpected devaluation (such as in the Asian crisis) can undermine the solvency of banks and corporations which may have built up large liabilities denominated in foreign currency and are unprotected against foreign exchange rate changes.

The ideal free market is one that every one should be free to enter, to participate in and to leave. However, events in the recent financial crises have led many of us to believe that in the freest of markets, there is a need to ensure that free flow of capital does not destabilise the market itself.

Indeed, calls for reform have gained increasing support and credence within the international community with the unfolding of the devastating effects of the crisis beginning mid-1997. The SC’s work within IOSCO’s Emerging Markets Committee has drawn attention to fundamental weaknesses in the existing global financial infrastructure that have caused and exacerbated these effects. These weaknesses include the inordinate power of highly leveraged institutions to move markets, the destabilising force of volatile short-term capital flows and the failure of existing credit assessment systems to adequately inform market participants of increasing risk of default.

One example of this mounting consensus was the express recognition by G7 countries at their recent meeting in Cologne of the need to strengthen the international financial architecture.

There are now increasing calls for greater transparency and regulation of hedge funds and greater awareness of the dangers of volatile short-term capital flows. To rebuild East Asia and the global economy, we now urgently need to engage in a sincere discussion about what constitutes sound governance in the contemporary world.

On the domestic front, we would have to ask ourselves this question: has our financial markets kept pace with change? Whilst markets have become global, applicable rules and regulations remain predominantly parochial or local. From a regulator’s perspective, the challenge for us in a global market is to design the regulatory and structural framework which will allow the market to function efficiently, competitively in a fair and level playing field environment, ensuring at the same time that the market is not subject to highly concentrated or destabilising forces that would disrupt its functioning.

The recent crisis also shows up the need for a careful and sequenced approach towards liberalising a country’s capital account. The experiences of Thailand, Korea and Indonesia clearly tells us that there is no prescribed formula on sequencing. However, it is important to recognise that countries vary greatly in their levels of economic and financial development, in their institutional structures, in their legal systems and business practices, and their capacity to manage change in a host of areas relevant for financial liberalisation. It is in recognition of this that the IMF policy-setting committee and subsequently the Finance Ministers and central bank governors of the G7 industrial nations, in the fall of 1998, stressed that a country opening its capital account must do so in an orderly, gradual and well sequenced manner.

Issues of liberalisation versus protectionism would need to be considered at great length to ensure that a country is competitive in a global trading environment. In a developing nation such as Malaysia, a protectionist policy towards local financial services industry and industry participants have been adopted to assist the local industry to develop to international standards. In the area of financial services, for example, the Government’s stance has been that consolidation of local financial services providers is necessary to ensure the development of a core group of strong and stable financial institutions to be able to withstand international competition when the financial services markets are opened to international participants.

Indeed, the Malaysian experience clearly shows that a premature freeing up of the capital account, which was done in 1988, without the requisite reforms and institutional arrangements in order to withstand the shocks, can result in debilitating effects as was faced in the Malaysian financial services industry.

MALAYSIA’S EXPERIENCE

Perhaps the most important lesson learnt from the Asian financial crisis was the interdependence of financial markets. Even the most developed economies were not spared of the effects of the financial turmoil which began as a result of Thailand’s default on its eurobond issue in February 1997. By May, 1997, the Malaysian Ringgit was under severe pressure from currency speculators and interest rates had risen from between 7% to 9%. It was reported that Bank Negara Malaysia expended about RM1.2 billion of its foreign exchange reserves to try to stave off the attack of currency speculators. However, this was the first of many repeated attacks on the currency.

The effects of the currency crisis began to take its toll on the country in 1998. Interest rates were rising to above 11% and the Ringgit had dipped to an unprecedented low of RM4.71 in January, 1998. All sectors of the economy experienced severe contraction as access to liquidity and credit became more scarce. Bank Negara had made many attempts to quell the effects of the financial crisis through imposition of tight monetary policies and attempts to ease credit to certain sectors of the economy to no avail. But the avalanche would not stop.

Malaysia’s sovereign credit rating was downgraded by international rating agencies to just above so-called junk bond status. Malaysia was facing a serious credit squeeze. Raising international capital was prohibitively costly. Flight of capital from the country resulted in a sharp decline in the stock market which fell to levels of 250 before bottoming out in the second half of 1998.

As many of you are aware Malaysia’s response to the crisis was one that was totally unexpected by the global community. The Government decided that it needed to protect the economy from increasing global pressures on the Malaysian economy. On 1 September, 1998 the Government introduced selective exchange controls with the intention of curbing and preventing further manipulation and speculation on the Ringgit. The Ringgit was pegged at RM3.80. The Government took further measures to discourage short-term flows of money by requiring that inflow of funds should remain in the country for at least one year. On 15 February 1999, this was replaced with an exit levy for repatriation of capital. The selective exchange control measures imposed by the central bank on 1 September, 1998 were directed towards reducing the internationalisation of the Ringgit by eliminating access to Ringgit by speculators and reducing offshore trading of the Ringgit. This involved the introduction of rules relating to the external account transactions of non-residents and currency of settlement of trade transactions. However, general payments, including movement of funds relating to long-term investments and repatriation of profits, interest and dividends remain unaffected. Payment for the import of goods and services must be made in foreign currency. All export proceeds must be repatriated back to Malaysia within six months of the date of export and proceeds from exports must be received in foreign currency.

The selective exchange control regime is intended to provide the time and opportunity for the Government to institute the necessary financial reforms in the Malaysian financial markets. This is in fact in progress in the work of Danamodal (the equivalent of the Resolution Trust Corporation of the US) to alleviate non-performing loan from banks’ balance sheets and Danamodal which is to recapitalise the banks. The Government is also committed to consolidating the domestic financial services industry in having few but strong and viable financial services providers in order to be prepared for financial liberalisation.

GIVING CERTAINTY TO INTERNATIONAL FINANCIAL TRANSACTIONS AND PROTECTION TO FOREIGN INVESTMENTS

International trade and finance, because of its global nature, necessarily involves many areas which may give rise to uncertainty as to the applicability of the contract under which certain trade and financing arrangements are made. These areas range from political issues and political stability to sovereign intervention of the economy, certainty of applicable laws as well as independence of the judiciary.

The Asian lawyer will be fascinated by the rapid changes which are taking place in foreign investment law both within this region as well as in the rest of the world. In less than half a century, the states of Asia have moved through a whole range of stances which could be adopted towards foreign investment. The immediate post-colonial period was characterised by a period of hostility towards foreign investment, motivated by the belief that the ending of economic imperialism alone will bring about true independence. The ensuing period was dominated by a debate about the regulation of multinational corporations and the fear that they posed a threat to state sovereignty. In this period, laws were devised to control the entry of foreign investment and the manner in which such foreign investment operated in the host country after entry. The third and present period is a period of pragmatism where the dominant view is that foreign investment, if properly harnessed, can be an instrument which generates rapid economic development. Competition for the limited investment that is available means that each state country which is bent on a foreign investment led growth strategy must make its laws as hospitable to the foreign investor as the other state which is also bent on a similar strategy.

As much as there is competition among countries to attract foreign investment, there is competition among multinational corporations to enter host countries. Whereas previously the market was dominated by large multinationals, now, there are small and medium enterprises which can transfer more appropriate technology and bring sufficient assets for investment.

This “open door” policy towards foreign investment in developing countries is typically achieved through careful screening of entry by administrative agencies which have been established for the purpose and regulation of the process of foreign investment after entry has been made. After entry, there is continued surveillance of the foreign investment to ensure that the foreign investment keeps to the conditions upon which entry was permitted. In this regard, attitudes to foreign investment protection and dispute resolution will be affected by the new strategies adopted towards foreign investment.

In the context of the new strategies which have been developed by controlling entry and the later surveillance of operations of foreign investment, the foreign investment has ceased to be a contract based matter and had become a process initiated by a contract no doubt but controlled at every point through the public law machinery of the state. The old notions of foreign investment protection which concentrated on the making of the contract and the contract as the basis of all rights of the foreign investor would inevitably become obsolete. This transformation which has taken place is crucial to the devising of effective methods of foreign investment protection. The subject matter of the protection has also changed in that not only physical assets of the foreign investor but his intangible assets which includes intellectual property rights as well as public law rights to licences and privileges have become the subject of protection.

The proposition that contractual provisions in an agreement concluded with a host country offer little protection to foreign investment must be qualified in a situation when a bilateral investment treaty has been entered between the state of the foreign investor and the host country. The result will be different, for the contract becomes effectively internationalised as a result of the existence of such a treaty. It is a basic proposition of international law that any matter that is essentially within the domestic jurisdiction of any state could be internationalised if it is made the subject of an international treaty. The existence of a bilateral investment treaty which covers the foreign investment then internationalises the whole process of foreign investment which would otherwise have been a process that takes place entirely within the sovereign jurisdiction of the host state. But, whether this result will follow depends on the terms of the bilateral investment treaty.

As a matter of general international law, the position seem to be that a contract between a party and host country must always be subject to a national legal system. Those who seek to prove the contrary have an onerous task of showing that his accepted proposition has undergone a change. There are a few usually uncontested arbitral awards which support the view that a foreign investment contract is subject to international law or some other supranational system.

Bilateral investment treaties are obviously regarded as important by both capital exporting and capital importing states. But, these treaties are not uniform and they do not have the ability to create any uniform law on foreign investment protection. But their existence adds to investor confidence and creates an expectation of investor protection. The importance of these treaties lies in the several results they achieve. The first is a signaling function about the national policy towards foreign investment.

Another advantage is that the foreign investment contract in the context of a bilateral investment treaties could have the effect of forming assets protected by the bilateral investment treaties. This will also include licences and other advantages obtained from the government during the course of the foreign investment. Whereas without the bilateral investment treaty these licences and advantages may have been without protection under general international law, they new receive protection as a result of the wide definition of property in the bilateral investment treaty. Whether the host country did intend that its administrative decisions be subjected to international review as a result of the treaty, will remain a moot point. But, it remains a possible result if the treaty.

In Malaysia, efforts have been made by the Government to ensure a level of certainty between international trading partners trading with Malaysian counterparts. The Government has expressly guaranteed that foreign companies acquiring equity participation in local companies would not be required to restructure its equity at any time[1]. Further to this, the Government has taken many steps to increase confidence of foreign investors in Malaysia.

INVESTMENT GUARANTEE AGREEMENTS (IGA”)

The Investment Guarantee Agreement protects parties involved in an international transaction from non-commercial risks such as nationalisation and expropriation. The IGA will provide a foreign investor with the following :



protection against nationalisation and expropriation;

prompt and adequate compensation in the event of nationalisation or expropriation under a lawful or public purpose;

free remittance of currency, profits, capital or other fees on investment;

settlement of investment disputes either through a process of consultation through diplomatic channels or if such process fails, for referral to the International Court of Justice. Disputes in connection with investments, under IGAs should first be resolved through local judicial facilities. In the event of failure to settle, it would be referred to the Convention on the Settlement of Investment Disputes or the International Adhoc Arbitral Tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law.



Malaysia has concluded IGAs with about 64 trading nations including trading blocs such as ASEAN and major trading partners such as the United States of America, United Kingdom, Germany, Taiwan, etc.

TRADE DISPUTE SETTLEMENT

Another aspect of international trade is the availability of acceptable dispute resolution form. Globalisation of trade obviously involves greater potential for generating international trade disputes. The international business community looks for prompt, economical and fair conflict-resolution mechanisms. Negotiation, conciliation, litigation, and arbitration are well-known conflict-resolution devices. Direct negotiations and conciliation may resolve a conflict. However, when parties fail to solve the controversy through direct negotiations, they have two choices: litigation or arbitration.

Within the context of the GATS, there is an express provision for trade settlement dispute where countries have disputes in relation to commitments made under the agreement. The WTO have provided for procedures in relation to a dispute settlement process. The dispute settlement procedure is considered to be the WTO’s most individual contribution to the stability of the global economy. The WTO’s procedure underscores the rule of law, and it makes the trading system more secure and predictable. It is clearly structured, with flexible timetables set for completing a case. First rulings are made by a panel, appeals based on points of law are possible and all final rulings or decisions are made by the WTO’s full membership. No single country can block a decision.

Malaysia is also signatory to the Convention on the Settlement of Investment Disputes established under the auspices of the International Bank for Reconstruction and Development that establishes facilities for international conciliation or arbitration. Further to this, the Kuala Lumpur Regional Centre for Arbitration was established in 1978 with the objective of providing a system for the settlement of disputes for the benefit of parties engaged in trade, commerce and investments with and within the Asian and Pacific region.

In conclusion, as we draw close to the new millennium, it is indeed a challenge to us all to be able to grapple with some of the abovementioned issues and adopt appropriate responses.



By: loveleenchawla

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Make Money

Forex Trading System-Make Hugh Profits

Trading Forex is an exciting way to make heaps of money, however as with all business opportunities only some people are successful. Today there are many good trading systems being offered online, so why isn’t every one making heaps of money. The answer is simple, there is more to trading than using the best trading system.

I have researched the different behaviour of those who have maintained a successful trading career and those who have similar trading systems but have not been able to sustain a trading business and have written down the tips and strategies that will help you take your trading to the next level.

This information is not only for beginners but is important to every one Trading Forex.

I agree you need the best forex system, unfortunately that is not enough, you also need to follow these tips:

Trading Tip 1: Money Management.

Before anyone starts trading it is important to understand how the laws of probability work. If you know that your system will give you a 60/40 win ratio long term (and this is a winning system) your wins might be mixed in with the losses, however it could happen that your first 4 out of 10 trades lose, this could compound to your first 40 out of 100 trades losing.

How many traders would still have any capital and be prepared to go on to win the next 6 or 60 trades? This explains the need to limit your trade to 1% of your capital, this will give you 100 trades before losing your capital.

Many Traders after a losing trade think that doubling up on the next trade is the easiest way to get back on track. This is NOT the answer. Let me explain Recovery of Lost Capital. To give an example, if you start off with $10,000.00 and lose 20% you have lost $2000.00, leaving a balance of $8,000.00. At a quick glance it is easy to think you need to win 20% of your capital back and you will be even. However that is not the case. You actually need to win 25% of your remaining capital ($8000) to be even. As the % of loss against the original capital increases so does the % required to be even increase. At 50% loss of the original capital $10,000 your remaining capital is $5000.00 and you need 100% of that remaining capital to get back to $10000.

($5000 + $5000 = $10000).

Remember if you have more than one trade open at the same time, although each one might be only 1% of your capital, your actual risk is 3% (1% + 1% + 1% = 3%). Having a risk management plan will keep you trading and being able to accumulate excellent profits.

Trading Tip 2. Psychology and Mental Skills of Trading.

All Traders have access to similar information but only 10 -20% are successful and able to achieve sustained profits. Even knowing the above tip is not enough it comes down to you, the Trader. Winning Traders all have the following attributes. Discipline, Patience and Confidence.

You must have the Discipline to plan your trade in advance both where you enter the trade and where you exit, stay with your system and do not break the rules of your trade and don’t get emotionally involved with the market and what is happening.

Confidence plays a large part in successful trading. You must believe in yourself and your ability to analyse the market otherwise it is too hard to make the right decision.

It is very tempting to rush into a trade, be patient, wait for the system to tell you when to trade, and don’t try to make the signals fit your system. Remember the market is open 6 days a week 24 hours per day and the moment to trade will happen. Short term traders can be very tempted to trade against the short trends due to frustration, unfortunately the results are usually poor.

Trading must be seen as a business with a plan, goal and strategies. Use the best system(see below) plus remember these tips.

I hope this information helps you become a successful Trader.



By: Lyndsay Wilkinson

About the Author:

FOREX TRADING- What are you Risks:

Every single investment comes with some level of risk. We have all seen the odd bank go under which has quiet often being seen as a ‘safe’ investment.  While forex trading there is the risk of loss in trading off-exchange forex contracts can be substantial. It can sometimes be greater than the initial investment when guaranteed stop losses are not in place. Pleas make sure you are using a broker that offers guaranteed stops, click on this link for a recommendation Best Forex Broker. So if you are considering participating in this market, you should understand some of the risks associated with this product so you can make an informed decision before you start trading. So Trader Beware.  What does come with higher risk, that’s right higher returns.

As shown above if you are considering trading foreign currency trading there is that element of high level of risk and may not be suitable for all customers. If you cannot take a loss, do yourself a favor and don’t TRADE, as no matter how brilliant of a trader you are you cannot pick the market 100% of the time.

Money Management:

If you have a solid money management plan in place this can help to reduce the risk of forex trading. So when you start trading you should only use funds to speculate in forex trading that you are prepared to loss, or any type of highly speculative investment for that matter, are funds that represent risk capital fore example funds you can afford to lose without affecting your financial situation. So the day to day money that you require to live on, don’t trade with that. There are other reasons why forex trading may or may not be an appropriate investment for you, and they are highlighted below.

This can be a volatile market and it can move against you very quickly. Also remember you are trading with leverage, in some cases up to 400:1 so make sure you use leverage that you are comfortable with.

You have just blown the stack, lost it all that how fast this market can move.

When you start trading, you are required to open the account with a deposit of money (often referred to as a security deposit or margin, which is what you leverage agains) with your forex dealer. This will then allow you to order or simple terms buy or sell an off-exchange forex contract. Above we showed with the leverage (up to 400:1), a relatively small amount of money can enable you to hold a forex position worth many times the account value. So $1000 can be leverage up to $400,000 so it doesn’t take much of movement to lose the initial $1000.  The smaller the deposits in relation to the underlying value of the contract, the greater the leverage. If the price moves in an unfavorable direction, high leverage can produce large losses in relation to your initial deposit. In fact, even a small move against your position may result in a large loss, including the loss of your entire deposit. This is why using a broker that offers guaranteed stops is paramount. THIS MUST BE ONE OF YOUR TRADING RULES: NO EXCEPTION.

Now there is also the flip side to Forex Trading, if you get the trade direction correct it can result in major gains. Maybe this is why we all love Forex Trading.

Now if you have a great trade and make great profits from forex trading, do not get overconfident. If you become over confident it can be dangerous. Also make sure that you do not overtrade remember the currency market is open 156 hours per week, so don’t panic if you miss one trade. If you exit a trade you should not automatically re enter a trade.

Make sure that when you are trading that you have your rules, stick them, follow them. The forex market is doesn’t work on a popularity basis, so need to ask family and friends their opinion on the trade it will only confuse things.

Forex trading can be very rewarding but make sure you go in with your eyes open, as 90% of traders will go broke, mainly through the above reasons. It is always advisable to get some level of knowledge before you start out in the market. There are a host of forex education courses available. The CFD FX Report has recently reviewed a lot of them, and on our homepage is a company that we believe to be outstanding. A lot of students have come out making over 300 pips per week.

Please though do not spend thousands of dollars on these courses as quiet often they don’t guarantee success and a course of a few hundred dollars such as the course above is normally better.



By: singapore trader

About the Author:

Debt Consolidation

1. Establish Stop Loss : Before making any forex trade what soever, decide before how much you’re willing to lose and you just follow that amount. Set a stop loss level before entering a trade and place it as soon as possible. Never alter your stop loss if your position is losing.

2. Let your profits Run : Never let your emotions govern a trade. Keep in mind why you are entering the market and of course you follow these reasons. You’ll be less emotional, you will be better. Do not turn your trading plan, move your stop loss as the market moves in your favor and let your profits run.

3. Do not influence them : You must have your own forex trading strategy and you will comply. If you are influenced by others, you change your mind so incessant, learn to ignore the outside once you have made your choice. You will always find someone who can give you a logical explanation to take a position opposed to yours.

4. Keep sizes and positions within acceptable limits : Forex Traders have a real success when they know that trading is a game of probabilities, and in long term if you stick to your strategies and you implement healthy strategies that you follow, it is likely that you will succeed. To be a successful trader, you will never take a position that could jeopardize substantial capital. In fact, you will find only very rarely win trader risk that more than 10% of its capital in a trade, and 10% is already extremely high. For example, if you deposit 25, 000 USD from your trading account, your maximum loss should be USD 2, 500, representing a maximum loss of 250 pips for a standard lot of 100,000 units (on a trade EUR / USD for example) . Generally, try to put more than 2 to 5% of your available capital.

5. Know your risk ratio Vs your earnings ratio : The ratio of benefit / minimum risk you should use is 2:1. For example, if you are trading long GBP / USD and you want to gain 50 pips, you should not risk more than 25 pips. Another example, you should never risk 40 pips to gain 15. If you do, you lose trades will ruin your chances of profits. The analysis of risk Vs profits is an extremely important for any forex trader.

6. Have a suitable capital : Always make sure you have enough credit, for example you can ask the following question: “If I lose 50% of my starting capital in a period of 6 months, can I still enable as a trader? . Only if the answer is yes you can start trading. One of the keys to success is independence of mind in the trading, which means your trading freedom must not be influenced by your fear “crippling” to lose.

7. In Trend or Neutral : Learn how to analyze the forex market, is this a trend or rather neutral? In a market trend, follow the trend, in a neutral market, buy low and sell high, since you are using stop loss, and you control your risk.

8. Do not fight against the trend : Do not try to sell high in a bull market or to buy low in a bear market. Follow the good old adage “the trend is your friend!

9. Average : One of the most common mistakes made by traders is the continuous addition of positions on a losing position. I have personally never seen a trader profits on the long term by using such techniques. For short-term trades, preserving capital is the most important, involve too much capital will undermine your success. Trading in the short term, if your strategy is good, the market will evolve in the desired direction in a relatively short time, however if the market gives you wrong, the short-term traders will have to accept that they trade so incorrectly, gets cash losses and seek a new trading idea. Do not leave room for pride in your trading.

10. The idea of yesterday is no longer necessarily valid today : Regularly we may detect a potential trade and decide to wait until the following day to see if he is confirmed. When you see that everything went exactly as you thought, remember that it may already be too late. Back over your reasoning for this trade, make sure your original reasons are still valid, if not forget this trade. There will always be opportunities for trades, be patient and attack.

11. Understand how the market thinks : Everbody should accept that any information (except for newly published information that the market adjusts immediately) is already included in the price of a currency pair. You must know the indicators to come (especially the most important), and you need to know what is already anticipated by the market. The vast majority of the publications of the market is already anticipated and prices by the market.





12. Trading - a game of probabilities : Nobody can get 100% results in forex trading, you must accept it. Trading is a game of numbers, you win sometimes and lose other times, the idea is simply to win more than you lose. Trading is a game of probability and if you act properly in the long term, you will come out winner. Learn from your mistakes, when you begin, you’re more likely to lose in the beginning, look what you’ve done wrong, try not to get into the emotions, if you meet your strategy and learn from your mistakes, you should see your profits exceed your losses.

13. Know why you are in a trade : Keep a journal of your trades and record exactly why you went into each trade. Do not be impulsive, follow your strategy, that way you will learn what strategies work for you long term and which do not work.





14. If the logic disappears, exit : If you think you are on a low and that it breaks down, exit the trade, and then reassess the situation to make a new decision.

15. Establish a follow up : If you chain 3 or 4 losing trades, take a break! It is obvious something is not working, leave, go drink a coffee,Do not be afraid to take a break.

16. Study : Learn new ideas, keep up to date, and do not trade on the ideas of others, you should always know why you are in a trade.

17. Fun : Enjoy what you do, have fun! However, keep calm, stay as uneffected and never give up - you’ll have more success.



If you want a Best Automated Trading Robot…… Click Here



By: Anil Kumar Raju Addipalli

About the Author:

Relaxing Music

Rules-based Trading is Fearless Trading 

Renowned trading coach Price Headley, author of “Big Trends in Trading”, once wrote about the dangers of letting your ego control your trading decisions, especially the three critical decisions of how much money to risk, when to enter a trade and when to get out.

  “The ego desires to make discretionary decisions because it desires to appear sophisticated, and daring, and to relieve boredom. But the point of trading is not sophistication, or excitement. It is to make money. So the key question to ask is, ‘What is the most effective way to trade?’. And the answer is, ‘Very systematically’.”

  The key to successful trading, he concluded, is the consistent application of clear, well-conceived and objective trading rules. One of the cruelest paradoxes of this incredibly fascinating and challenging pursuit is that trading seems to offer so much freedom, seemingly unlimited freedom to those who are successful at it, yet requires so much regimentation and self-control. An out-of-control trader, whether rookie or seasoned veteran, will crash and burn quickly. A trader in control of his emotions has the game nearly won at the start.

  The problem is, once the game is on, self-control seems to evaporate like water in the Gobi desert. But a good set of trading rules will give the newbie a fighting chance, and keep the veteran in the game long after many of his or her fellow traders have moved on to less stressful pursuits. Your rules don’t have to be sophisticated or designed by a Nobel Prize-winning economist. In fact, the simpler the better – as long as they are clear and as long as you follow them! Otherwise you will succumb, as every trader does on so many occasions, to what the trading psychology guru Mark Douglas called “The Four Primary Fears”.

  In his classic book “Trading in the Zone”, Douglas wrote that all trading errors – every single one – result from succumbing to one of these Four Primary Fears:

  1. The fear of being wrong.

  2. The fear of losing money.

  3. The fear of missing out (on the trade and profits).

  4. The fear of leaving money on the table, or giving back open profits.

  These fears lead traders to second-guess their well-designed systems, causing them to exit before an exit signal is given, or to jump in before an entry signal is given. We’ve all jumped into trades too soon, afraid that the market was going to run away without us. And we’ve all jumped out too soon, whether second-guessing the entry and not waiting for the trade to develop or snatching the quick profit instead of letting the trade play out and hit our target. Witness the Four Primary Fears in action.

  The solution?

  1. Have a well-designed (and profitable) system.

  2. Have a clear set of rules for entering and exiting trades.

  3. Follow your rules!

  A well-designed system allows you to trade securely, even serenely, in the knowledge that over time you will make money, and that the result of any single trade doesn’t matter to the profitability of your system. After all, losses are part of the best systems ever designed. So is giving back some open profits on each trade. To expect otherwise is to expect, literally, perfection! And in this business, as in life, that is not rational!

  So, have faith in your system and faith in your rules and trade well. If your system is a good one you will make money. But perhaps just as importantly, if you follow the rules of your system, instead of reacting to your emotions when deciding whether to enter or exit a trade, the whole enterprise of trading will be much more enjoyable for you.

  Happy Trading!

About the Author

CFD FX Report is a real time tool for clients with an interest in the trading of stock markets, stocks, indices and commodities globally and forex.CFDs (Contracts For Differences) are one of the worlds’ fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis. The CFD FX Report is released everyday at 6.30 p.m. (Singapore time) for review by the clients for the next trading day so you are ready for trading when the Singapore Stock Exchange Opens.

We provide real time sms and email service for our trade ideas as well as full member support. The trading tool that traders needs. Free 1 week trial

By: singapore trader

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