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Friday, July 24, 2009

The 3 Tools EVERY Real Estate Investor Needs

By Doc Schmyz

I am always being asked. "Doc what advice can you give me that will help me with investing. What tricks of the trade or inside tidbits can you share with me?? The best answer is you need to develop a "toolbox".

Now before you go nuts scratching your head, let me define the areas of the tool box. The tool box has three areas.

1) Mental tools: This is the part of the tool box most of us use the most. It is all about how we think about investing. Are you a outside the box type of thinker?? Or do you follow a set program to help guide you in your investment choices? It is how your brain reacts to the idea of a new investment...the mental aspects that make up the checklist in your head.

It is the results of the information you have taken in about investing.

IMPORTANT FACT: Any bookstore you go into has a billion books on Real estate investing. Buy them all...ok not all but you should have a EXTENSIVE collection of them. Why you ask??? Simply put...if you have a understanding of the information and tactics that are being read by other investors...you will actually understand the factors that they are using to buy/sell/screen potential investments. Knowing what information someone is useing to make a decision gives you and advantage.

The E-tool box: Your online tool box. What websites are you useing online over and over. Most real estate investors only use a few sites. I have found this can lead to a sort of tunnel vision or what I call "INFO INPUT SHUT DOWN".

The answer is very easy it's called the opt in newsletter/update. Here is how it works.

Just go to the free email server of your choice...create a new email address that you will use to collect email updates/newsletters from various websites. then go thru them at your leasure.

Once your on a email list I suggest allowing a few weeks before opting out of it. Just because it doesnt give you the "diamond in the rough" on the first email doesnt mean the newletter your getting is worthless. Newletters to look can originate from RE investment clubs, Blogs, News sites...etc

I ,myself, avoid most ad based emailing lists. however, that doesnt mean that all of them are a waste of time. review a few and decide for yourself if they are worth keeping.

My favorite online tools/sites are the ones that cost me very little to use/buy or better yet are free to me. I love to find good resource sites. ( I admit freely I normally link them to my own) A good web tool is a great thing to find. Im not refering to another mortgage calculator...I mena that online tool your just dying to try out. When you find them...bookmark them.

3) And last but not least... actual physical, hold in your hand, tools. It can be a great "go by list". A solid flash light. anything that makes the time in the field looking at investments easier.

So there it is..the outline to your toolbox. Build one...update it often..and USE IT DAILY. - 23159

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Two Numbers That Guarantee Your CFD Trading Success

By Jeff Cartridge

Understanding the relationship between two important ratios is the key to building a winning CFD trading strategy. The two key ratios are the risk reward ratio and the hit rate.

Risk reward is calculated by dividing the average win by the average loss. The hit rate is the number of winning trades divided by the total trades. So the hit rate is how often you are right and the risk reward is how much you win when you are right relative to how much you lose when you are wrong.

Is Trading CFDs Like Winning Lotto?

Do you really believe that lotto is the way to make money? The behaviour of millions of people would suggest that it is.

The risk is very low, lets say $10 for a ticket, while the reward is potentially huge, with first prize being many millions of dollars, say $10 million. The risk reward ratio of this investment is exceptional at 1 million to 1. There are very few investments that deliver this kind of risk reward.

However if it was that easy we would have all won lotto. This is not the case and while the risk reward is exceptional, the hit rate is lousy. Assuming that the lotto draw requires 6 balls out of 40 to win then the chance of buying the winning ticket are 3,838,380:1.

If you bought 3,838,380 tickets on average one ticket would win and the rest (3,838,379) would lose. This means on average you would have to spend $38,383,790 to win $10 million. Overall playing Lotto would cost you $28,383,790.

Winning Lotto is more about luck than probability as you may win before you buy you 3,838,380 ticket. But when it comes to building a profitable trading strategy it is not about luck it is about taking advantage of an opportunity that has a profitable edge.

Rugby Versus CFDs

The Crusaders have consistently won the Super 14 rugby competition in NZ managing to secure 7 wins over the last ten years.

A large bet of $100,000 was made that the Crusaders would win a particular game. The payoff if the Crusaders won was $108,000 so the gambler would receive a profit of just $8,000. With a downside of $100,000 the risk reward is very poor at 8:100 or 0.08.

However when you consider the odds of a Crusaders win they were very high. If the probability is high enough, more than 90%, then this could actually be a profitable strategy.

Calculating the probability of a team winning a game is not an easy task, but assuming the odds were 95%, then the gambler would win 19 times $8,000 and lose $100,000 just once. It could be that our gambler had a profitable strategy despite the lousy risk reward.

To trade CFDs successfully it is vitally important to have a strategy that overall you expect to win because the combination of risk reward and hit rate are in your favour. - 23159

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Mini Forex Trading - How Starting Small Can Mean Earning Big

By Bart Icles

Forex currency trading takes more time and effort to learn compared to other investment markets. With this in mind, why is it still gaining popularity, and with still so many new traders lining up to get into the action? Is it because it is the only investment scheme today that offers any one the chance to make big money with only minimal risks with just one successful trade deal? The answer is a resounding YES!

Mini-Forex trading market is very profitable way of trading since the lot size of a mini account is just one-tenth of a standard accounts lot size, so it gives the trader the chance to trade with lesser amounts with just a small initial capital fund, while controlling a larger currency position. An example would be if a $100,000 position is held in a 100:1 margin, the trader has only to put up $1,000, or 1% to control the position. In futures trading its about 5% of the total value of the holding, and about 25% for equities.

Although this type of trading is very profitable, it involves more risks if one does fully understand what is involved and at stake. Every trader has to have a clear understanding how their margin account works in relation to the margin agreement with their respective clearing firm. If you don't have a clear understanding or comprehension of how it works, it's best to consult with the account manager immediately.

Any investing trader's position in the account can be partially or fully liquidated if the available margin in the account falls below within a predetermined amount. Sometimes, positions are liquidated before any margin call can be obtained, but some have automatic stop-loss systems to close out positions before margin runs out. But its still best that you monitor your margin balance regularly and make use of your stop-loss orders when its time to do so, so as to limit the risk of losing your investment.

One of the glaring advantages of Forex trading over other trading markets is that its commission free, so you don't have to pay exchange and brokerage fees. Forex currency trading is done on a world-wide scale through interbank marketing where buyers and sellers abound, and in constant touch. Without payments for matching up with any buyer and seller, and with larger spreads, its a much better investment market to get into.

Mini Forex trading is the better alternative compared to futures and commodities trading. With its risks involved, understanding the market and having a trading system that suits your trading psyche would be most helpful to having a successful and profitable career in the highly vibrant and volatile world of Forex trading - mini or not. - 23159

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What Are Forex Signals? Do We Need Forex Signal In Forex Trading?

By Jon Nash

Forex signals are predictions (forecast) of the rate of each pair of currencies in the near future. It could be intraday forecasts daily, weekly or even monthly forecasts.

Forex Signals provide ordinary traders to see the market as experts does . It will make the trading process easier more profitable when you have enough knowledge of how the rate of each pair of currencies will behave in the next hours, days or week.

But forex signals were determined by human, and humans make mistakes, so dont ever consider those signals as a 100% accurate and risk free.

Some signals providers are more accurate than others, this you can find out by experience or by asking other users. Reviews of those providers on the net will give you no indication at all. So the best way for you to test some providers is by signing up with providers who offers money back guarantee for unsatisfied customers, or a free trail. This way you can test them up and see their service first hand.

I personally tested some of them and ended up with one service that provides the most accurate signals, you can find this service at accurate forex signals provider.

Some experts on the currency trading market share their knowledge with ordinary trader in two ways.

1. They can develop software, to analyze the market using their definition of the market and the changes, those software are known now as Automated forex robots. Those robots can automatically trade using the parameters the experts define and the inputs you choose.

2. Forex signals, experts have developed great talent in understanding and analyzing the currency market, they can predicts changes with any given pair of currencies related to any news, event or even by the behavior of the pair in the last couple days. So they share these forecasts with ordinary traders to give them better chance of making money online with forex trading.

Forex signals are great way to take advantage of the experience of other professionals, and its like making them help you and assist you to earn in the forex market . And if you are smart enough you can start analyzing those signals and start developing an ability to predict changes in the forex market by yourself.

Forex signals are in most cases offered by a monthly payment service, and sometimes providers ask for high membership fee. But it worth it for anyone serious to get a share of a multibillion dollar market; this fact had opened a new window to scammers. You will find hundreds of internet marketers who have no experience with forex trading developing some kind of useless products and services in to this market, So you need to be very careful what service and what product to chose.

You can trade in the forex market without any signals or software, but signals can improve your trading experience and you earning in this market. The average trader is having at most a 35% chance of earning money on the forex market; its not a 50-50 chance. Others who use good robot can get to 60% chance of winning. But using forex signals can push your odds to 75%.

Greed and lack of patience can cause of losing all your money no matter what you do and what signals you have. And dont blame the providers or the software for that. Before using any kind of assistance in the forex trading try to control yourself and your behavior first. - 23159

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Stock Indexes (Part I)

By Ahmad Hassam

There are 100s of ETFs and HOLDRS covering key industry benchmarks such as the various Standard & Poor Indexes, Russell Indexes or the Dow Jones Averages. There are ETFs that cover the other less well known narrow based sectors.

For example SPY tracks the Standard & Poors 500 Composite Index and is the largest of the ETFs. You should know the major indexes that are either key benchmarks or have ETFs tied to them.

Standard & Poor: Standard & Poor (S&P) has been providing independent and objective financial information, analysis and research for nearly 140 years. It is the financial services segment of the McGraw Hill companies.

It is also the provider of equity indexes. Investors around the globe use S&P Indexes for investment performance measurement. These indexes are also used as the basis for wide variety of financial instruments such as Index Funds, Futures, Options and ETFs.

S&P 500 Composite is one of the most popular indexes in the global financial markets. Hundreds of companies around the world have licenses with the Standards & Poors for their index products and the influence and name recognition of S&P 500 is unparalleled. S&P 500 is also used as a key benchmark for money manager performance.

The S&P 500 is a capitalization weighted index that tracks the performance of 500 large capitalization issues and each year thousands of money managers have the single minded goal of outperforming the S&P 500. S&P 500 represents more than 75% of the capitalization of the entire US Stock Market.

Over the years, the complexion of S&P 500 has changed. 30 years back most of the stocks were from the Industrial Sector. By 1970s, six of the top companies were from the Oil Sector. In 2000s, technology composed about one third of the capitalization of the index. The stocks in the S&P 500 are determined by a nine member committee in accordance with the general guidelines.

The other Standard & Poors indexes are the S&P Midcap 400 Index. It is based on 400 chosen domestic stocks and is also capitalization based. It measures the performance of the midsize companies of the US economy.

The S&P SmallCap 600 Index consists of 600 domestic stocks chosen for market size and liquidity. It is also capitalization weighted and is of interest to institutional and retail investors. There are also sub-indexes based on these S&P Indexes.

NASDAQ: You will often hear the Nasdaq market being up or down on a given day in the media. NASDAQ Composite Index contains more than 4500+ companies representing a market capitalization of trillions of dollars.

There is another Nasdaq Index called the Nasdaq-100. It is composed of the top 100 nonfinancial companies in the Nasdaq Stock Market. The QQQ is based on the Nasdaq-100 Index. NASDAQ-100 is a modified capitalization weighted index. - 23159

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