Forex Leverage Regulation

The retail forex market has long had significant leveraging allowances, but this has recently come under threat by FINRA, the largest independent securities regulator in the United States.
Since the Internet retail forex boom, many forex brokers have been offering their clients anywhere from 50/1 to 400/1 leverage on their accounts. FINRA is claiming that the proposed change would serve to protect investors from excessive market risk.

This proposal, however, assumes that traders are not using leverage properly. Having leveraging capabilities isn't tantamount to over-leveraging one's positions, and this is what the FINRA proposal is failing to recognize; instead, leverage merely allows a trader to exercise exact risk management in relation to the size of their positions.
For instance, if a trader wished to risk only 1% of their total capital per position, they would use leverage to determine the amount that they are willing to risk per pip, based on the size of thier stop loss.
Having leveraging capabilities allows a trader to dynamically adjust the size of their stop, so as to accommodate the current volatility levels of the market, while still maintaining a fixed position risk, regardless of whether they are risking 10 pips or 1000 pips.

Conversely, not having such leverage available will likely negatively impact traders who are using appropriate risk management. Reducing the leverage means that you will have less available margin for active positions, even if you are risking the same amount in both scenarios.
This means that such traders are more likely to experience a margin call, assuming a consistent position risk, if the leveraging allowances were to be reduced.

The most unpalatable part is that FINRA not only wants to limit the leverage - they evidently intend to practically eliminate it. If FINRA simply wanted to bring forex leveraging limits to the levels of commodity futures it would be far more understandable.
Under the proposal, however, forex brokers would only be able to offer leverage of 1.5:1. Anyone who trades the forex markets knows that this would effectively put an end to US-based retail forex trading, since very few people would be able to properly trade under such a mandate. US-based FCMs would go out of business, and US-based traders would invest their money with oversees brokers.

The FINRA proposal sadly appeals to the lowest common denominator: the people who over-leverage positions with inappropriate stop-losses. In doing so, they consequently hurt all of the traders who trade with appropriate risk management, and merely use leverage as a necessary and responsible tool.

For anyone that is worried about this, you can rest easy for the moment. As it thankfully turns out, FINRA does not have specific regulatory authority over the forex markets; that would increasingly be the domain of both the NFA and the CFTA, whose regulatory capacity is significantly expanding in forex.
Further, it wouldn't be in the interests of the NFA and CFTA to support this proposal, not to mention the flagrant inconsistency it would create with currency futures: they have been working long and hard to exact more control over the domestic forex market.
If it were to predominately move oversees, they would have lost the ability to effectively regulate such activities (not to mention the membership fee revenue that they would receive from Forex CTAs).

Investing Early to Achieve Financial Freedom

To achieve financial freedom, one important thing you should do is learning how to invest. By knowing how to invest you can greatly increase your chance to achieve financial freedom. It can make the difference between living from paycheck to paycheck your entire life and having financial freedom.
That's because by investing you will make your money works for you. You won't just let your money sits on the bank doing nothing. Instead, you make it work so that your wealth grows more and more. Eventually, your wealth will reach the point at which you achieve financial freedom.

But knowing how to invest is not enough, you should also start early. The earlier you start, the better you chance to achieve financial freedom. That's because by starting early you will have the compounding effect works for your advantage.
Since compounding effect has the potential to grow your wealth exponentially, the more time you have the more growth you can expect. That's why starting early is so important.

You need to start now. Don't wait until the situation is perfect for you to start investing. While waiting for the perfect time, you are actually wasting a lot of time to have the compounding effect works for you.
People who start earlier will have been far ahead of you by the time you find the "perfect" time to start investing.

Easy Way Trading For Futures

Trading orders, which in terms is the buy and sell, can originate from all the possible sources would then be channelled directly into the trading arenas, which means that this would be the place that most of the prices of these commodities would then be determined and thus investment choices would be made.
In the end of the trading day, this is where the orders are then converted into purchases all over the world and sales in the buy and sell environment. One of the major function of trading futures is the actual transfer and movement of risk.

There is an increase of liquidity in between investors and traders, who of course, based on their individual preferences would have different time preferences. Trading futures is a tool that most investors use to completely do away with the risks (which end up being minimised) that naturally occur when there are price and market fluctuations. While this is a way to remove the unpredictability of the price and market movements, futures are not 100% guarantees.
Basically, in the market, there would be two main and major groups of futures traders. One of them is the hedgers, who are more intrigued in low lying commodities and are looking to, in a sense, hedge out the risk when it comes to price changes in the market.

There are also the speculators, who make up a large part of the market when it comes to trading futures. They will try to buy a commodity in the hope that whatever system they have in place will be able to predict by buying a commodity on paper in the hope that the price will change (positive) in the future.
When you hedge, you are protected against major fluctuations in the prices on the market, and this is done actually by allowing the risks of these changes to be moved to the arenas of the 'risk takers' of the market. While this article will not get into the nitty gritty of hedging futures, just know that there are two types of hedgers, which include the sale and the purchase.
You might believe that this is laying a bet, but the piece of information is that conjecture refers to the state of a rightful venture based on the present state of the marketplace trends.

On the other hand, it is very dangerous for green futures dealers who try to forecast the marketplace and wonder without having sufficient capital or knowledge. Given that the prices are dispersed through tele-communications net and cyberspace, it creates online futures brokering very expedient and straightforward for a person.
These days a lot of agents proffer their provisions for trading commodity futures on the internet. Since additional danger is concerned in online futures trading when compared to stock trading, you have to critic for yourself whether or not it merits the additional jeopardy of trading commodity futures on cyberspace.

Buy Krugerrands Online or Buying From Dealer ?

Modern investors have more choices than at any time in history, and becoming an informed gold coin buyer can not only be an enjoyable hobby, but also save you some money as well.
Regardless of if you buy krugerrands online or from your friendly neighborhood dealer, you need to know how to determine krugerrand value on your own- don't just take a seller's word. Bullion gold coins are struck to be used as an investment medium in gold.
The majority of the coin's value comes from its gold content, or purity. Krugerrands are 22 carats, because they are alloyed with copper to make them more durable. If a kruger was 24 carats, or pure gold, it could be easily dented, and even scratched with something as soft as your fingernail. By adding copper (1/12 of volume), the Rand Refinery creates a more durable coin with the kruger's distinctive dark golden hue.
The coin is actually heavier than the denomination marked on it- for example a 1 oz gold krugerrand has one full ounce of gold and is heavier still by the added copper content. This ensures that buyers get what they want- a convenient, standardized method of buying gold. Your first task in determining how much a krugerrand is worth is to determine that value of that gold.
If you do a Google search on "Gold Spot Price" you will turn up a number of real time quotes for gold. Once you know the gold price, you can go on to determine what the premium for the coin is, and if it's a good investment.
Your next step is to determine what the current price for the size of krugerrand you are shopping for is. (A quick side note- premiums on the fractal krugerrands are higher. So if you are planning on buying five 1/10 oz gold krugerrands, you might want to consider just buying a 1/2 oz krugerrand instead, you can save a little money).
You can let your fingers do the walking- call a few local coin dealers and see what prices they are selling krugers for. Another convenient way to get an idea of what the krugerrand price is to go to eBay. You'll need to have an eBay account to do this- for some strange reason they won't let you see completed auctions without it.
If you don't have an account just sign up- they're free. Once you have your account and you have logged in, type the size of kruger you are looking for into the search box. On the left hand side, toward the middle of the page, you'll see search options. Be sure to click the tic box next to completed listing, and then search.
Completed auctions will show the listing price bolded in green. This is price that buyers are paying on the open market, and it's a good indicator of the current value of a standard, circulated krugerrand. Uncirculated or proof krugerrands will bring an additional premium due to their special nature (For example a proof is usually hand loaded on the presses, and double struck on specially polished blanks).
Okay, now you know your krugerrand value- let's talk about advantages of dealers versus buying online. When you purchase from a dealer, you are getting their expertise in addition to coin itself. You are less likely to get a fake krugerrand from a dealer, because they are in the business of dealing gold and it is in their own interest to protect their reputation.
Also, because they are experienced in dealing with gold coins (especially if you have a dealer who specializes in krugerrands), they are more likely to able to spot a fake than an amateur investor. A dealer is also a good bet if you want to buy a krugerrand for its numismatic value- or collectability.
So if you want a proof krugerrand, which is more valuable because of the special preparation and limited mintage numbers, a knowledgeable dealer is a good choice for getting good information and a fair price. There are some disadvantages. You may not have a dealer in your town- so there could be travel. Some dealers prefer to buy and sell in bulk, so they may not want to sell you a single coin.
Finally some dealers do charge a higher price than what you could get online. Speaking of buying krugerrands online, there are a few advantages to take note of. When you buy online, you have access to hundreds of coins- more than any dealer could reasonably stock. It's also very convenient- you can buy a coin from a collector in New York while sitting at your kitchen table in Texas.
In some cases if you're quick and bid at the right time, you can get a lower price than you would pay at a dealer. The down side of buying krugerrands online includes a greater chance of getting a counterfeit krugerrand. If you buy using Paypal you are protected up to $2000, but if you buy a lot of krugers exceeding $2000 you may be at risk.
You can also mitigate risk by buying from sellers with a large number of sales and a good feedback score. Finally selling krugerrands on ebay isn't free. As of this writing, it costs about $70 to sell a krugerrand. While the seller pays these fees, they are passed on to the buyers in terms of higher prices.
So what is the right answer- should you buy from a dealer or buy online? We recommend a hybrid approach. Find a dealer who sells online. This way you minimize risk, and you get all the conveniences of an online purchase. I
n absence of a dealer listing you like, do your research, determine the current krugerrand price, and check the quotes from both dealers and online, and then make your decision. If you decide to buy krugerrands online versus buying from a dealer, just make sure to do your research first!

Mutual Funds and Socially Responsible Investing

Socially responsible investments are analyzed on a global scale. The SRI agenda is to promote a set of values which are considered to be ethical and "Earth friendly" by investing in companies which exhibit these values in their corporate structure, in the workplace, in their labor practices, in their concern for the environment, and in their impact on the community (including respect for the rights of native peoples).
SRI intentionally excludes certain business sectors which are deemed to be unhealthy for the planet, such as weapons, tobacco and gambling.

Although socially responsible investing originally started a few decades ago with the religious agenda to avoid companies which promoted addictive behaviors (like alcohol, tobacco, and gambling), it evolved in the 1970s to include social and ecological agendas as well.
Today the social and ecological issues are at the forefront of socially responsible investing. Mutual funds which specialize in SRI usually focus on a particular agenda, and will only hold shares in companies that are in keeping with the SRI values.
For instance, some funds will only buy stocks in companies that manufacture and promote green energy products. Other funds will only buy stocks in companies which practice fair trade. Still others will actively avoid stocks in any corporations which are involved in the manufacture or sale of weapons, munitions or military products.

Fund managers screen prospective companies for their socially responsible practices in addition to their profitability. Once those criteria are met, the fund manager makes decisions about the characteristics of the securities that will be included. At this point, the SRI mutual fund begins to look like any other mutual fund.
The fund manager decides on small cap or large cap stocks, whether to invest exclusively in domestic companies or to go global, whether the investment goal will be for growth or income.

As for profitability, socially responsible mutual funds are comparable to other traditional mutual funds. When you stop to think about it, this makes perfect sense.

5 Trading Money Management Questions

Trading money management is fundamental if you are to achieve your goal of financial freedom. The first step you will take in setting your trade money management rules is to define your trading float, in other words, the amount of capital that you have to trade with.
In fact, one of the most commonly asked questions I get is, 'How much do I need to actually start? To help you answer that question you need to first define your objectives.
Here's 5 key objectives that you should follow to get your trading on track.

1) How much time do you have to spend trading? That might be full time, part time or hardly any time.

2) How much capital do you have to work with? Remember, you shouldn't trade money you're not comfortable losing.

3) How much risk are you comfortable with? As we all know, markets move. There'll be times when you have a drawdown. The question then becomes: how much of a drawdown are you comfortable with? 20%? 30%? You need to decide.

4) What annual rate of return do you want? This includes what you expect to make and in what time frame. Be realistic about this. Decide what you honestly think will be returned based on what you're willing to risk. For example, you're not going to have a system that will return 100% per year if you're only prepared to risk a drawdown of 5%.

5) How do you want to take your money from the market? Are you looking for cash flow (consistently taking profits out of the market) or capital growth (looking to grow your capital in the market over time, using the magic of compounding)?

All these decisions need to be based on your income objectives. Are you in it to make a steady income or are you looking at long-term growth?

And remember, there is no set pay cheque in trading. It's not a reliable income. You will have good months, even great months, but then a lull. So don't quit your day job just yet!

So many new traders set themselves unrealistic expectations. Different variations of the question "I want to make 200% a year - that isn't unreasonable is it?" are perennially fired my way. Now consider this.

Top 6 Investing Mistakes and How to Avoid Them

Investing is a skill and like all skills it takes some time to develop it. During this time many investors commit fatal mistakes that cost them a lot of money.Here are 6 mistakes that you should avoid:
Following the latest fad: buying what everyone else is buying won't make you rich. You will simply get the stock when its price is right at the top and just before it begins to drop.
Giving up too easily: many people abandon their investment plan, if they see even minor fluctuations in the market. The market tends to fluctuate a lot from day to day and watching it all the time will simply cause you unnecessary anxiety. Be prepared to make your investments for the long term.
Not diversifying: don't have so much trust in one stock. Spread your investments into many different sectors. This way if one stock doesn't do well, the other ones will cover your losses.
Investing without a plan: take you time to clearly establish a solid plan and define your goals. How many risks are you willing to take and what kind of returns do you expect from your investment?
Being in a hurry to make a profit: greed is a certain recipe for disaster. Don't get swayed by get-rich-quick schemes and options that promise high returns. Prefer slow and steady profits.
Invest only money you can afford to lose: many people borrow money or sell their house or their car to act on the latest fad. Using borrowed money can lead to serious trouble if your investments go awry. Making rash choices is something you may regret in the future. Start small, build up your capital and then gradually raise the amounts you invest.

How to Survive When Your Alternative Income is Gone

Many consumers looked at these alternative schemes as desperately needed sources of extra income to boost their budgets. They used the returns to fund school fees, car payments, mortgages and other expenditure that would otherwise be impossible to afford.
Others simply rolled interest over into their principal amount, hoping to attain a large enough lump sum to deposit on a house or to start their own business.

Despite their good intentions, however, many persons who put money in these funds took on risks they really could not afford. Some didn't even have the basic starting amount, so they pooled together with friends and family in order to get a piece of the high-yield pie. Even more disturbing are the cases where people sold cars and property or took out loans against their homes to get a large amount to invest.

Today, it's pretty clear that it's the end of the road for most of these high-return investment plans. The shut down of Cash Plus, Olint and the various other schemes will be financially stressful for those who took a chance with money that wasn't theirs, or sums that they couldn't afford to lose.
Those who borrowed to finance their investments are now facing loan payments without the income to pay. Some could even lose the homes or cars that they offered up for collateral.

So what can you do if you're one of those investors who are now suffering from the fallout in the alternative financial world? Here are some suggestions that can help you get back on sound financial footing:

1. Don't give up all hope, but be willing to accept the possible loss of your investment.

The reality is that most people knew that some of these schemes were very risky. When you take a gamble you should be prepared to live with the good and bad consequences.

2. If you've put your property at risk, find an alternate source to pay down your debt.

It doesn't make sense to wait in hope for these stalled schemes to re-start. It's crucial to find some source of income to pay your loan every month. If you have little hope of getting back your money, you may be forced to sell your property if the income is just not there.

3. Don't try to recover by jumping into another risky scheme.

Gamblers on a losing streak think that if they keep going, they'll eventually win back what they lost. The reality is they usually lose it all. Don't throw caution to the wind in your desperation to re-coup your losses. Make sure that you understand how the investment works, and that you can really afford the risks involved.

4. Create another plan to earn extra income to meet your needs.

What if the alternative schemes had never existed? Would you have given up all hope of buying your own home or starting your own business? In the past others have built wealth, not through get-rich-quick schemes, but by cutting back on spending and saving more, or by working hard and consistently in a business of their own.

Make a Lot of Money Investing

I am sure that you have explored many investing options, such as hedge funds and other managed investments, or you have probably settled for a bank CD. The problem with all these options is that the yields are simply too low, and in order for you to really make money out of your investment you have to be already rich.

For example, let us say you want to invest $500. If you get a 5% annual yield (which is very good), those $500 would grow up to maybe $2,100 in 20 years, which is not exactly a great figure for a retirement fund.

The conventional investing options are simply unable to deliver the kind of growth you need to really help you build a future starting with a small investment. Therefore, in order to break the mold and really open the door to alternatives that can actually put you on track to a consistent and significant increase of your equity, you must explore investing options that you can manage yourself. This way, every single penny you make by investing you hard earned money will go to your pocket instead of those who claim to be the experts.

Of course, this does not mean you should go right now and use all of your savings to start buying currencies, stocks and commodities like crazy, and then cross your fingers to see what happens. No, the idea is is for you to diversify and prepare yourself with the right tools and resources, because unless you are a pro, you will need those tools and resources in order to perform like one and really see your money grow.

Indeed, nowadays you will find basically two kind off investors:

1) The professional investors or financial experts -you decide how to call them- who invest based on their extensive knowledge of the different markets and their behavior.

2) The small investor or amateur investors, who invest and trade by using trading tools like software, signals and other services, or by educating themselves within a particular area of investment.

Unless you are a financial expert, you fall into the second category, which means that you can invest safely and achieve high returns on your investment, but only as long as you are prepared with a well balanced trading toolbox.

For example, if you use a reliable software to trade the forex markets, you could achieve monthly returns of 30% and even higher. If you do the math, this would allow you to turn $500 into $10,000 within a year, and with the compounding effect such a small investment could quickly turn into a small fortune after just a few years.