Forex and Stock Trading - Are You Trading To Your Strengths?

by BriNIV810

In your trading, are you playing to your strengths, or are you simply being an "opportunity seeker"? There is a huge difference between the two and if you're just an opportunity seeker, then you are leaving yourself open to frustration and losses.

There are many parallels between trading, business and gambling, and your ultimate success long-term will be determined by how you approach any of the three. Playing to your strengths is critical in all three. In any of the pursuits, there is competition and you always want to make sure that you're playing to your strengths and not your weaknesses. The objective is winning, that is profiting, and you want every advantage that you can get.

Too often, the opportunity seeker will go after an opportunity just because they see that there 's money to be made, and they figure that they can shore up their weaknesses (learn more) enough to go get that money. Let 's take a brief look at how this applies in each area, keeping in mind the parallels between them.

In business, the long term successes are built by those with an end goal in mind, a vision of what the business will look like when it 's mature. This is critical because the company must stay on a course that is consistent with its vision while it is growing.

Distractions and deviations from the path only serve to slow it down or even take it backwards. Successful business leaders know when to pursue an opportunity and when to say "no". Saying "no" is essential to keeping the company 's activities (investments of time) focused where competitive advantages exist and avoiding those where the company is at a disadvantage.

In gambling, the poker player will stay at the BlackJack table and make his money there. He won't jump up and run to the Roulette table just because he heard somebody just won $50,000 over there. He knows what he 's good at and will only venture over to other tables for entertainment, not to make money.

In trading, let 's say investing for the sake of argument, a good real estate investor that knows how to make $1 million a year isn't necessarily going to do well in trading. They are completely different games. Just because a person knows how to buy properties right, increase their value through rehab or raising rents, does not mean that they will have the talents or skills to make money in the Futures or Forex markets.

Even an experienced trader should be hesitant to jump from one game to the next. A buy-and-hold position trader should exercise great caution before jumping into day-trading, and a spread better should hone his skills before thinking about buying (or selling) outright futures contracts. Each strategy (or game let 's say) has different skills associated with it, and different emotional requirements.

The other serious consideration is your proficiency level - period. This combined with your ability to devote time to trading. If you are completely new to trading or you haven't yet become proficient at the necessary skills to trade, then you definitely should seek out help. The learning curve can be very costly in trading, and if you don't have the time or a plan to become proficient, how do you ever expect to make regular profits from it?

If you don't have the proficiency, the strengths, needed to be a good trader, nor do you have the time and resources to become one, you may want to consider other choices available to you. If you have neither the skills nor the time to develop them, but want to take advantage of the nice money to be made in trading, you may want to consider a managed account. Why settle for an amateur trading with your money (YOU), when you can have a pro do it for you? Do your Due Diligence first though!!! Ask for the track record and the plan going forward.

Your next option if you're "starting from scratch" is to trade with the assistance of a seasoned broker. That 's what they are there for. Of course you can find very low commission brokers to deal with, but you may get just what you pay for. A good broker can be found for $50-$100 round turn commission, and they'll give you the best advice they can. In the long run, you're likely to be way better off - if you'll follow their advice! Again, ask for their track record, and check with the NFA to see if they have any complaints.

It wouldn't hurt to see if the broker you're considering is recognized within the trading community as being good. Many very good brokers publish regular articles or advisory columns on respected websites and in established periodicals. Generally, if you see that the person has been published for a period of years, then that is a good sign. The wackos and charlatans bounce around too much and aren't allowed to stay in one place for long before their reputation catches up with them.

Until you have the strengths yourself, borrow them from someone who has them while you're developing. When you have the proficiency, the skills, and the resources, only then should you venture out on your own. And that is only if you are so inclined to actually becoming a trader and doing it all yourself.

If your true objective is to make money, then play it smart. Make use of other people 's knowledge and skills until you have developed your own. Of course, if you really don't want to devote the time to being a full-time or highly active trader, but still want trading to be part of your income portfolio, consider your other choices. Whatever you do, don't simply chase another "opportunity" to make money if it doesn't play to your strengths.

For Trading, those strengths need to be discipline, emotional control, coach-ability, ability to focus, follow-through, decisiveness, understanding of probabilities, dealing with uncertainty, and a slew of others. There are activities for entertainment and others for making money. Trading can be both, but if it is not taken seriously, with a sincere review of your own characteristics and desires, then it can wind up being neither.

In any endeavor where money is the end result, get help rather than go it alone. Remember, a good mentor is there to show you the right steps to take and those to avoid.

About the Author
Are you struggling with your trading psychology? Have your emotions been causing you losses and costing you profits?
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The Economic Crisis-A Chronology

by AnthonyWayne

The current financial crisis has been years in the making and the crisis is the product of years of reckless and irresponsible behavior by both government and financial institutions. Warning signs were clearly present in 2007 when the subprime mortgage 'bubble' burst. Throughout 2007 several major mortgage companies filed for Chapter 11 Bankruptcy and several venerable Wall Street firms found themselves in financial difficulty.

The troubled housing market sent warning signs to Washington and Both Fed chairman Ben Bernanke and Treasury Secretary Hank Paulson expressed alarm about the dangers posed by the bursting housing bubble. Paulson stated, "The housing decline is still unfolding and I view it as the most significant risk to our economy. The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."

Fast forward to 2008 and the crisis rapidly escalates. In March Bear Sterns, one of the oldest firms on Wall Street gets federal funding as shares plummet. Bear Sterns was acquired by JP Morgan Chase for $2 a share. In September rapidly deteriorating conditions prompt the Federal Government to take over Fannie Mae and Freddie Mac which at that point owned or guaranteed about half of the U.S. 's $12 trillion mortgage market. In mid September the crisis spiraled out of control with catastrophic events occurring daily.

On Sept. 14th Merrill Lynch was sold to the Bank of America, and the next day Lehman Brothers filed for bankruptcy. On Sept. 16th Moody 's and Standard and Poor 's downgraded ratings on insurance giant AIG 's credit on concerns over continuing losses to mortgage-backed securities. The next day the Federal Reserve loans AIG $85 billion dollars to help the firm avoid bankruptcy.

After a dismal week for markets Treasury Secretary Paulson unveiled his plan for a bailout. The plan was put to a vote in the House and failed 228 to 205. On October 1st the Senate passes a revised bailout bill laden with tax breaks for special interests. On Oct. 3rd the House passes the revised bill and President Bush sign the bill into law.

Conditions continue to deteriorate and on Oct. 6th the London market declines by 8% the largest fall in 20 years. Other European markets fell by a similar amount. On Oct. 6th several other countries take drastic action to prevent financial collapse and unfreeze credit markets.

The short-term lending market had frozen, and companies began to worry that they would not be able to get the loans necessary to pay their bills or make payroll. On Oct. 8th Central Banks in Europe and the Federal Reserve announced coordinated rate cuts of half a percentage point. Despite early optimism the coordinated move did little to boost investor confidence and markets continued their decline. On Oct. 9th the Treasury Department announced it was seeking equity stakes in some of the country 's banks, in order to inject capital directly into the troubled financial system. This move would partially nationalize banks, something that was unthinkable in the United States.
Despite Action Markets Down

Despite drastic action by governments, credit markets were still frozen and the effects of the crisis started to creep into the day to day economy. Probably the most stunning news was that General Motors was considering bankruptcy. The already troubled US auto makers depend on consumer credit accessibility and frozen credit markets could spell doom for the auto industry.

The only good financial news in these troubled times is the fact that the US dollar continues to hold its value in Forex markets and Forex trading. The dollar continues to hold steady against most world currencies and has gained against the troubled Euro. It would appear that Forex investors and traders are the only ones making any money in these troubled times.

About the Author
Anthony Wayne works in the marketing department of the Forex Interbank site Interbank-FX in Pennsylvania. He is also editor of the Forex Network Site a network of Forex information and news sites.

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World Stock Markets Remain Volatile

by AnthonyWayne

Stock markets remain volatile with investors unsure whether the market has bottomed out or will decline even further. Last week Wall Street suffered its worse week in history with massive selloffs on world markets. Investors are waiting for the effects of the $700 billion dollar bailout to be felt but credit markets remain unaffected so far.

Amid the chaos some saw reason for hope. U.S. stock futures indicated a sharp rebound in store for the major indexes ahead of the market 's opening bell on Monday. Dow Jones industrials futures rose 235 points, or 2.8 percent, to 8,605. Nasdaq 100 futures rose 38.5, or 3 percent, to 1,321.00; and Standard & Poor 's 500 futures added 31.8, or 3.5 percent, to 922.80.

Asian markets were slightly higher as the week began with indicators higher in most Asian markets. Despite the week 's positive start it is still too early to predict how western markets will react. Investors will be closely watching to see if the Treasury Department 's plan to buy equity in troubled banks, rather than just their bad assets, will be enough to halt the decline on Wall Street and unfreeze credit markets which are essential for the function of the everyday economy.

Despite drastic and unprecedented actions by governments, investors remain uncertain about the future of markets. Chuck Gabriel, managing director of Capital Alpha Partners in Washington stated, "We're running out of arrows in the quiver, there 's just not much left after this, and at some point we're going to find a bottom." The Dow had its worst week in both point and percentages and blue chip index has lost an astounding 22.1 percent of its value. US stocks have declined $8.4 trillion in the past year, measured by the Dow Jones Wilshire 5000 index. It is easy to see why investors are fearful.

History has not been helpful in predicting market directions. During the 'crash' of 1987 the market posted huge losses over the course of two days but stabilized quickly. The current crisis has played out over a period of weeks with each drop in the Dow greater than the last. Said market strategist Steve Goldman, "I have hundreds of indicators that I follow, and we're in an environment where standard indicators tested throughout history should not be applied. We've never seen this kind of volatility, these kinds of declines, and it 's a market not to be a hero in."

The Treasury 's plan to buy shares in several troubled banks may have had a somewhat calming effect on Wall Street but there is some resistance to the plan by some bankers. Said David Kotok, chairman and chief investment officer of Cumberland Advisors, "What banker, if they can avoid it, wants to have the federal government as its partners after witnessing the results over the past year? In the US the government is entering uncharted waters with the bailout and the plan to acquire shares in banks which adds to the uncertainties faced by markets.

One would think that the financial crisis in the US would adversely affect the dollar but the US dollar remains steady against major world currencies on Forex markets. Historically, investors turn to the dollar in times of crisis because of its perceived stability and the fact that the US has the word 's largest economy. Hopefully it can continue to fulfill its historical function in Forex exchanges.

About the Author
Anthony Wayne works in the marketing department of the Forex Trader Information site FX-trader in Pennsylvania. He is also editor of the Forex Network Site a network of Forex information and news sites.
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