Money Advice Guide

The operatic fat lady is singing and she has many choruses to go. As you know an opera is a musical drama. Unfortunately the one we are watching has terrible screeching with discordant sounds. This opera is called The Market and the scene we are watching is called The Bear.

She started singing 3 years ago and is becoming worse and worse. Will she ever stop?

This act has followed a very long and pleasant act called The Bull. Everyone was beautifully dressed, lived in wonderful houses complete with giant TVs and 2 cars in every garage. The singer was on key and had a wonderful voice. From my experience with operas each Bull act is followed by a Bear act of equal length. I hope the fat lady will quit singing much sooner than that. Is there any way to escape that raucous sound?

Does the stock market follow the opera? Let’s look at the facts. From 1920 to 2000 there were 3 major bull markets that lasted about 16 years with each followed by a bear market that lasted about an equal length of time. Does it mean we have about 13 more years before the next bull move will occur? If you are a student of history and historic cycles the answer must be “Yes”. When you look within the economic and political machinations there doesn’t seem to be much hope for any kind of quick recovery.

Is the fat lady singing in other countries too? It seems she is. Of 34 countries only 6 had positive results for their market indexes that are similar to the New York Stock Exchange and none of these 6 were large countries. Many of the other 27 had losses greater than the U.S. In the chorus most of them were off key. In the stock market 96% of all stock mutual funds lost money during 2002. The opera is bad enough, but the stock market is worse because I am continuing to lose money. Is there anything I can do?

During the opera I can stuff cotton in my ears to stop the noise. Can I stop the losses in the market? Yes. And it is pretty easily done. On all stock you own whether it has a profit or a loss place an open stop loss order at the price you will sell it if it drops that low. Are you willing to lose as much again as you have lost so far?

Brokers will discourage you from doing this, but it isn’t their money. Ask them if they will guarantee it (in writing , of course). If they won’t, you will know what to do.

You may not be able to stop the fat lady from singing, but you can stop the noise (market losses) with a stop-loss order so you can sleep soundly once again.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy
It!” has helped thousands of people make money
and keep their profits with his simple 2-step
method. Read the first chapter at
http://www.mutualfundmagic.com
and discover why he’s the man that Wall Street
does not want you to know.

Copyright 2005

Tags: bond market, currency exchange, economics, forex trading, stock market, U.S. debt, U.S. economybond market, currency exchange, economics, forex trading, stock market, U.S. debt, U.S. economy

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For many people the difficult part of becoming a FOREX trader is initially getting started. It is something new and can be intimidating or even frightening. This article will be the first in a series aimed at helping you make the first steps to becoming a successful trader.

You will need to get yourself in to the proper frame of mind before you start. This is not a “Get Rich Quick” scheme despite all the hype that is floating around. You will not start with a mini account and make $50,000 in your first week of trading.

To be successful as a trader you will need to treat your trading like a small business. You need to have a plan and budget and that plan should include time-spent educating yourself about the market. If you want to make money with your trades you can expect to spend a lot of time learning in the beginning.

There are several different types of orders that you can use to open and close your trades; you will need to become familiar with them. You will need to learn to perform analysis and what type of analysis to use when. You will need to learn to read and understand various charts that will help you decide what currencies to trade when and at what prices.

There are a lot of news stories that can affect the price of a currency. You will have to know where you can find this news and how to interpret it and what effect it is likely to have on the market.

All brokers use software to perform the actual execution of your trades. You will need to become familiar with the software and comfortable using it. You will have to pick a good broker that has the services available to suit your trading style.

The most critical thing is that you will have to learn patience and discipline to become profitable in a timely manner with out losing money on your trades during the learning curve. The most important thing you can do to avoid costly learning mistakes is to spend significant time paper trading.

What is paper trading? Paper trading is a term used to describe opening pretend trades without any money. The term originates from the stock market where people would write on paper the trade they wanted and then watch the market and see how they would have done if they had actually executed the trade. This is the best way to learn the markets without risking any money.

Today almost all of your brokers have demo accounts that you can use for practicing. A demo account will act exactly like a real account except the money in the account is not real. This has the added benefit of using the same software that you will use with a real account. So not only do you learn how the market behaves you also get a chance to become familiar with the system you will be using. You should paper trade until you are turning a profit on a regular basis before you risk your money with real trades.

If you believe that you have the right mind-set to become a trader the next step is to select a broker and open an account. We will discuss this in the next installment.

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Tags: currency, forex, forex online, forex trading, investing, make money online, wealth buildigncurrency, forex, forex online, forex trading, investing, make money online, wealth buildign

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