Disadvantages of airbags kill Japanese company Takata

TAKATA, Japan's largest airbag maker, has been bankrupt for billions of dollars due to defects in its products, the biggest bankruptcy of a Japanese company to date.

The company said in a statement that the decision was taken by its board of directors and led to a freeze on trading of the company's shares on the Japanese stock exchange, after the accumulation of the decline of shares by about 80% since the middle of this month.

The company's obligations exceed $ 8 billion and $ 988 million, making Takata's bankruptcy the largest ever for a Japanese company.

The company's bankruptcy in Tokyo is aimed at facilitating debt restructuring, securing protection of Japanese legislation and avoiding default, according to the company, which said it would seek emergency funding from Japanese agencies to continue its activities.

The company's president, Shigihia Takada, apologized at a press conference for creditors, asking them to "understand and support" the "restructuring" process, according to local media.

For his part, Japanese Economy, Trade and Industry Minister Hiroshiji Seko said bankruptcy was "inevitable."

Established in 1933, Takata is one of the world's leading suppliers of airbags and other road safety devices and has been experiencing economic difficulties since 2008 due to defects in its airbags

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Canadian Life Insurance

Canadians are realizing the need for life insurance and for more people, there is good news as the insurance companies have substantially lowered their rates over the past several years. Further more, Canada has a very sound financial services industry with the life insurance industry, having an excellent record for being able to keep its promises to consumers.

Canadian Life Insurance Buyers

The Canadian Life and Health Insurance Association works to ensure the health of the Canadian Life insurance industry through advocacy and lobbying activities and more. The association represents most of Canada's life and health insurance companies, puts out industry publications, and it also runs a Consumer Assistance Center (CA), which provides information to regular folks who come to them with questions. The Canadian Life and Health Insurance Association also operate an OmbudService complaints line and has been in existence since 1894.

Canadian Life Insurance Buyers Are Well Protected

Policyholders of Canadian life insurance companies are unlikely to have cause for concern about a company's ability to pay promised benefits. Life insurance companies licensed to write life insurance in Canada are required to be members of Assuris. In the unlikely event that your company becomes insolvent, your benefits are protected by this organization, an industry funded plan backed by the entire life insurance industry in Canada. When benefits are covered, Assuris will ensure that you will continue to receive the covered benefits under substantially the same terms and conditions that you were originally promised.

How To Shop For Canadian Life Insurance

Canadian's seeking life insurance are encouraged to comparison shop for the best life insurance rates with a reputable life insurance broker. This broker will "shop" the market for you as he has access to the database of all the life insurance companies. For whatever reason you are buying, make sure you get a good reputable company because at the end, your beneficiaries will thank the day you bought them some life insurance.

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Can You Protect Your Portfolio from the Sales Teams?

When you make an investment – from a simple bank certificate of deposit to a large shopping mall – you are going to be buying from someone whose greatest skill is employing sales closing techniques. Their skill in closing a sale will not include safeguarding your money or earning you any profit. And their number one priority is to make their sales quota to keep their job. It is only your personal education, experience and due diligence that can protect your money from the numerous people on the other side of the table.

It is a dilemma that in order to invest, you’ll be face to face with professionals who do not have your financial interest at stake – but they will all appear to be. Sales people will appear to be on your side right up until the moment you write a check or sign a commitment. Then any problems are yours alone, their verbal promises go up in smoke, they stop returning your phone calls and the fine print suddenly negates the possibility of getting a single dime back from your investment. In my experience, a salesperson’s top priority is never your best financial interest, and you need to realize this no matter how friendly they are or how polished their sales pitch appears. As you walk into a bank or brokerage office, or call a broker, you need to keep in mind that their personal goal is not in alignment with yours. To see past their sales routine, you need specific education, experience with the industry, and, hopefully, a knowledgeable mentor.

For example, I once received a solicitation from a loan broker who wanted to get me into a triple-net lease commercial building with a million-dollar loan. After a few questions it was clear that he was acquainted with lending, but not very experienced. But continued questioning revealed that his knowledge of commercial real estate would barely fill a thimble. And he was the principal agent trying to slam me into a million-dollar loan so he could collect a commission check and move on to the next deal. Although he sounded quite confident on the phone, his responses destroyed my trust in his ability to maneuver through the numerous issues and problems in my best interest. By studying an industry and talking to experienced players, you’ll be better able to ask questions with impact. And in this case, it was the difference between me keeping my money or locking myself into a contract guaranteed to be a huge financial disaster.

To inoculate yourself against sales pitches, you need to do a lot of comparison shopping or at least become a semi-professional in the industry you want to invest in. Develop a healthy amount of suspicion and skepticism of any sales claim, and hire experienced professionals to assist you on your side of the table. These would be attorneys, accountants, financial and operational experts that are being paid directly from you to assess every aspect of a complex transaction. He or she will support you in areas that you may be weak, and ask all of the confrontational questions that need to be addressed before you sign anything.

Due diligence acts as a barrier between your money and all the people that want some of it. I personally want Fort Knox around my money, so I make the effort to educate myself as to what is going on in the areas that I want to invest in. I take some facts that are offered to me and verify them independently, and then I get more facts and continue the process until I feel comfortable enough with the people I am dealing with. If I depend upon the sales people to perform due diligence for me, it is no better than throwing money into the wind and hoping for the best.

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Can Health Savings Accounts Bring Down High Healthcare Costs?

More and more people now have the opportunity to choose Health Savings Accounts (HSAs) over other, more traditional, health insurance coverage – more companies and financial institutions offer this option than ever before. For the healthcare consumer, this is good news. When the community as a whole is given more choice when it comes to healthcare options, everyone benefits. HSAs let you decide how to manage your own medical needs and work out a financial plan that works best for your specific circumstances.

An added advantage of Health Savings Accounts is the prospect of lowering the nation’s rising healthcare costs, and making the price of medical care more affordable for everyone. But how can revamping the current health insurance system affect healthcare from a financial standpoint? More to the point, how can a different kind of health insurance make it easier for most people to pay for required medical expenses?

In 2003 the Medicare Modernization Act introduced the concept of HSAs to the American public for the first time. A Health Savings Account is meant to encourage people to invest in their own healthcare through personal savings, and reduce health care costs at the same time; a revolutionary idea that has the potential to be the starting point for positive changes in healthcare. Health Savings Accounts have sparked a lot of debate amongst those who believe in the idea and those who are wary of its ability to change the face of healthcare as we know it.

When you get down to the fundamentals, HSAs are truly designed to improve healthcare and make it accessible to the vast majority of people. For the individual, HSAs make it easier to pay for medical expenses when they arise. Coupled with a high-deductible health insurance policy, a Health Savings Account allows you to save pre-tax money and earn interest tax-free.  This allows you to have money set aside to cover a whole host of medical bills, including items that aren’t necessarily covered by traditional insurance plans, such as dental expenses or alternative treatments. Individuals and employers can deposit up to $2700 per person and up to $5450 for a family, and any time you need to withdraw any amount to pay for qualified healthcare costs, you can do so tax-free. In addition, premiums for high-deductible insurance policies can be as little as half the amount of traditional PPO policies.

And because a Health Savings Account is tied to an insurance policy, more expensive treatments are covered, usually 100%, after you’ve met your deductible. When you turn 65, any savings remaining in the account can be withdrawn tax-free to be used for medical expenses you incur in your senior years. In addition, the savings you accumulate in a HSA work like a retirement fund. The money grows tax-deferred like an IRA, and you can withdraw the money after age 65 to pay for non-medical expenses without penalty, although you will be required to pay taxes. It is important to note, however, that amounts withdrawn prior to age 65 are subject to penalties and taxes.

Giving the individual more consumer power when making healthcare decisions not only helps you and your family save money, but also creates an environment in which healthcare costs in general become more reasonably priced. Essentially, the price of healthcare is so high because free market forces have little sway in the realm of healthcare products and services. Insurance coverage causes a disconnection between the consumer and the item purchased. When you visit the doctor or purchase a prescription from the pharmacist, you don’t know the real price tag. All you see is your insurance payment and the price you pay at the cash register, after your insurance company pays the balance.

This lack of price transparency has led to less competition within the marketplace. People have traditionally chosen their doctors, health products, and other medical items based on location, convenience, or other factors not related to price. When people have the choice to compare different health care providers based on quality of service and price, soon overpriced healthcare will become a thing of the past. People will shop around and force providers to price healthcare more competitively.

As more and more people turn to Health Savings Accounts, medical providers will feel the pressure to post their prices and compete for the consumer's business. Armed with the knowledge of what healthcare actually costs, individuals and families will be less willing to overuse the system, which also drives up prices. (When healthcare appears to cost little or nothing, most people are prone to make use of services even though it may be unnecessary).

At the same time, HSAs naturally promote the use of preventive care. When people understand the true costs associated with healthcare, they will be willing to pay a little more up front to keep their engine running smoothly rather than pay a lot more at a later date to fix a problem they could have avoided.

Health Savings Accounts have also put affordable healthcare within reach for more people, who were previously paying medical expenses out-of-pocket due to inadequate or non-existent insurance coverage. The low premiums of a high-deductible HSA plan together with the option of putting your money in a savings account that earns interest has already encouraged large numbers of people who previously went without coverage to purchase a health insurance plan.

Only time will tell whether or not Health Savings Accounts can drive down skyrocketing healthcare costs, but the system created by such accounts, which affords the individual more freedom to control his or her own financial and medical destiny, bodes well for the future of healthcare in America.

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California Refinance: What You Need To Know

So what’s the best deal now with California refinance? Getting your dream home is one and paying your debts is another. A refinance will require your careful planning and budgeting if you want to succeed with your new loan.

What’s The Deal?

The deal is paying a lower monthly payment without having to increase your interest rates. As a rule, 2% off from your usual loan interest will make California refinance a better option.

California is still the best place to be and lower interest rates may attract you get a California refinance. There are several lenders vying for your business. They will offer you attractive interest rates. Be vigilant, though, in choosing your lenders if you wish to have a successful refinance program.

What You Should Know

Any refinancing means a longer new loan. If you have a 30-year fixed rate mortgage with just 20 years remaining but you want more cash flow monthly and you think you’ll be saving more by refinancing into a new 30-year agreement, you will erase 10 years of payments.

Given this scenario, you have to have a very good reason to get a California refinance, like lowering your monthly bills, paying off big debts, sending your child to college, and other big expenses.

But wait, do you know that your loan can be tax deductible? Make inquiries about the State’s policies on this matter. This will help you lower your expenses further.

What Happens When You Apply For a Loan?

When going for a California refinance, here’s what happens after you fill out a loan application form: the loan consultant has your application pre-approved, and before your application file reaches the closing, it goes through a series of steps.

Be ready with a copy of the title of the subject property and your income tax payments. The loan consultant will review these, including other documents. Afterwards, you will receive the loan disclosures which you will sign and return to the loan consultant.

Property appraisal and the review of documents by the processing department and the assigned underwriter will follow. Upon the final approval made by the underwriter, the closing date is finally scheduled. The final documents will be sent to the title company, notary public, or attorney who will close the loan. At this point, be ready with your state issued identification prior to signing the loan document.

Copies of all the documents signed during the closing will be provided. This will be followed by the three-day rescission period – time enough for you to change your mind. If you don’t cancel, a new title will be recorded and you are provided with the California refinance funds.

Double Check Rates Before Getting a Loan

Take the time to review the going rates and compare them with your existing loan. Lowered rates does not mean you’ll be paying lower monthly payments with a California refinance or a re-mortgage. You might end up paying higher monthly bills. If the monthly payment won’t be lowered, a refinance is worthless. So do your homework.

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California Real Estate

The process for purchasing a home in California is different from the procedures that are used in other states. Unlike the East Coast, attorneys are not used  to complete the sale of real estate. Instead, an escrow is used. Once you have located a home you want to buy, you will begin hearing people talk about the escrow. In California, there are no closing meetings. It is not common for sellers and buyers to meet each other on a regular basis. If you want to buy a home in California, you will want to make sure you have a loan before you begin the process of looking for a home.

All real estate agents in California must be licensed to buy or sell real estate. Every agent you deal with should either have a Salespeople or Brokers license. Brokers are allowed to receive payment for the sale of a property, while salespersons must work under the broker. Multiple brokers are allowed to work together, and are called sales agents. Sales agents must answer to a Broker of Record, and this is the person who will supervise them. There are three agencies that will be found in California, and these are dual-agencies, buyer's agencies, and sub-agencies. 

Before you decide to get a loan or broker, you will first want to find the right home in the best possible neighborhood. You will also want to consult an agent to find out what type of home is best for your income level. The agent will want to know what home you're interested in. You should always be ready to buy a home when you visit the agent. If you are truly ready, you will be given a better deal, because agents will often have to deal with people who are just "looking," and are not commited to making a purchase. Once the agent knows what type of home you want, they will begin driving you around to show you the different homes that are available.

The agent will not want to drive you around until after they've interviewed you. As the buyer, you will want to make sure the agent is experienced. When you deal with agents in California, they should put you in the loan qualification process as soon as possible.  By getting approved for a loan, you will be placed in a powerful position where you can negotiate. Once you have found the home you want, you will want to make an offer to the agent. In California, the offer should always be made in writing. The paper that it should be written on is named the Deposit Receipt.

You will want to place all the information about your offer on the Deposit Receipt. The agent will help by providing you a list of homes that are much like the one you're interested in. When an offer is made, it is also customary to write a check which is about 3% of the offer that you are making for the home.

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California Mortgage Company

Mortgaging your house is a big project. It might as well be one of the biggest investments that you are supposed to make. If you are in California and you want to invest in real estate you should spare some time for a California mortgage company. The right mortgage company will help you acquire the right deal. A reputed company will go through your profile, check your qualification and give you the option which will suit your financial situation best.

The basic objective of opting for a professional is guidance. While we want to own our homes and have healthy savings as well, the entire process of going about it could be confusing and cumbersome since we are not experts. And following the wrong advice could be disaster. There are many reputable California Mortgage Companies out there whose primary objective is to fulfill the customer's demand. They value every customer need and idiosyncrasies and provide solutions which match their myriad dreams of a home. 

The more professional California mortgage company will be able to provide you with the best of the deal by analyzing your personal profile. This would of course include your financial profile which is the biggest asset or curse for a borrower depending on his or her spending habits. The deal would be consisting of terms, rates and closing costs. Self-employed people can also get loans from a reputed company. 

There are many loans on offer for your special needs. For example, some California mortgage company might be giving no documentation loans, Debt Consolidation Cash Out, Borrower programs for self-employed, challenged credit loans, loans based on low FICO score. One of the main criteria of finalizing a good deal is to have a high FICO score. A low FICO score means chances of getting a best rates are low. 

Before you search for a California mortgage company you need to know about some basic terminologies and become familiar with the procedure. 

Adjustment period: It is the frequency of adjusting the rate of an adjustable rate mortgage with the base rate.

Annual Percentage Rate: This one is the annual rate, which is the effective interest rate to be paid on a loan. 

Base rate: In the mortgage industry, an underlying rate of interest is taken as an index. This is the base rate. 

Cost analysis: It is the subtraction of homeownership benefits from homeownership costs taking all the factors like mortgage interest, closing costs, homeowner's interest & property taxes and PMI. 

Equity: It is the difference between the market value of a home and the total amount of debt. 

Term: The loan is taken for the time, which is referred to as the term. General period of a home mortgage loan is about 15-30 years. 

Before you look for your suitable California mortgage company, just have a glance on the terminology and look out for the professional company that is offering you the best of the term. There are a number of ways to check your FICO rating also. You can improve your transaction history by paying all your credits on time.

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California Home Mortgage Companies – How Much House Can You Afford?

Because of rising home prices, many homebuyers are forcibly purchasing homes they cannot afford. While many are able to handle the mortgage payments, they are unable to keep up with utilities and other household expenses. There are ways that you can avoid being “house broke.” Before applying for a home loan, it is wise to consult a mortgage professional and determine how much you can realistically afford to spend on a new home.

Live Within Your Means

To receive the most enjoyment from owning a home, it is essential to live within your means. Sadly, many people splurge on new homes. When this occurs, you must either find a way to generate extra cash or downside to a smaller home.

Then again, some homebuyers do not fully understand how much money it takes to run a household. However, it is important to remember that bigger homes require more electricity and so forth. Take this into consideration before buying a new home. If you can afford the mortgage payment, but have little disposable cash for utilities and other unexpected expenses, it may be wise to select a less expensive home.

Take Advantage of Mortgage Calculators

Various mortgage lenders offer online mortgage calculators to give future homebuyers an idea of future mortgage payments. These calculators are not exact. Most do not calculate taxes and insurances. If using a mortgage calculator, simply input home price, interest rate, and loan term. Instantly, the calculator will provide an estimated monthly payment. Usually, taxes and insurance are about an extra $200 to $250.

Use a Reputable Mortgage Broker

Due to steady rises in home prices, many mortgage companies and lenders will approve homebuyers for loans that do not fit into their budget. Purchasing a home that you cannot afford creates many problems, especially if you are a first time home buyer. Some lenders will advise clients wisely. On the other hand, there are lenders who have a practice of persuading homebuyers to purchase homes that are way beyond their means. If a mortgage broker or loan company appears too pushy, deny their offer.

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California Home Mortgage

Mortgage is a financial program that involves borrowing money from the bank with the condition of keeping a valuable asset as a collateral security. Home Mortgage as the name suggests involves keeping the Home as the collateral security. There are quite a many banks in California that are offering the California Home Mortgage program. 

Before applying for the California Home Mortgage one should have a proper discussion with the best California lenders, as they can clarify all the confusions. One can also contact California Mortgage Brokers also in order to get more information. Before applying for the program one should find out about the California based bank/ company’s credibility after all not all places in California offer good programs. 

Apart from that one also requires to find out about best California Home Mortgage Quotes and rates. Only good places in California offer affordable quotes and rates. One can go through the bank/company’s catalogues and read carefully the terms and conditions as it sis important on the part of the borrower to know about the same. 

To apply for the best California Home Mortgage program one has to fill in an application form and provide information such as the social security numbers, marital status, current address, birth date, employment and salary information etc. All the information given by the borrower is evaluated carefully in order to see if the person is suitable for getting the money. 

When applying for a California Home Mortgage program its important on the part of the borrower to know if repayment of the loan is affordable. As incase the borrower fails to make the repayment then bank/company would have full control on the person’s home! One can pay back the Mortgage loan amount either all together or in monthly installments according to the repayment procedure being followed by the bank or company.

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Golden Tips To Organize Your Business Finances

Whether you are a new entrepreneur or a more experienced business owner, taking control of your finances can feel like a part-time job.  Some simple tips can help you streamline your time, organize your finances and reduce the stress of business money matters.

1.  Keep Your Bills in One Place 

When the mail comes, make sure it goes in one place.  Misplaced bills can be the cause of unwanted late fees and can damage your credit rating.  Whether it's a drawer, a box, or a file, be consistent.  Size is also important.  If you get a lot of mail, use an area that won't get filled up too quickly.

2.  Pay Your Bills on Schedule 

Bill paying can be simplified if it's done at scheduled times during the month.  Depending on how many bills you receive, you can establish set times each month when none of your bills will be late.  If you're paying bills as you receive them, chances are you're spending too much time in front of the checkbook.  Although bills may state "Payable Upon Receipt", there's always a grace period.  Call the creditor to find out when they need to receive payment before the bill is considered late.

3.  Read Your Credit Card Statements 

Most people take advantage of low interest credit card offers but never read their statements when paying the bill.  Credit cards are notorious for using low interest as bait for new customers then switching to higher rates after a few months.  Make a habit of looking at your statement carefully to see what interest rate you are paying each month and if any transaction fees have been applied.  If the rate increases or a transaction fee appears on your statement, a simple call to the credit card company can oftentimes be beneficial in resolving the matter.  If not, try to switch your money to a more favorable rate.

4.  Take Advantage of Automatic Payments 

Most banks offer a way to automatically deduct money from your account to pay creditors.  In addition, the creditors usually offer a lower interest rate when you sign up for this payment option because they get their money faster and on-time.  Consider it as one fewer check to write, envelope to lick and stamp to buy.  Just make sure you record the deduction when the automatic payment is scheduled or you run the risk of bouncing other checks.

5.  Computerize Your Checkbook 

Using a software program is a handy way to organize your finances.  Whether it's Quicken(r), Microsoft Money(r) or another package, these easy-to-use programs make bill paying and bank reconciliation a cinch.  Computer checks can be ordered almost anywhere and fit right into most printers.  Once the checks are printed, all of the information is automatically recorded in your electronic checkbook.  Furthermore, many banks have direct downloads into these software packages so when money is deposited or withdrawn, the transaction is entered immediately onto your computer.  And, when it comes time to do taxes, it couldn't be easier.

6.  Get Overdraft Protection 

Most banks have a service where, if you run the risk of bouncing a check, the money will come from another source.  For a nominal fee, the bank will link your checking account to either a savings, money market, or credit card so the embarrassment of bouncing a check will be avoided.  Call or visit your bank to learn about this convenient feature.

7.  Cancel Unused Accounts 

Whether it's a credit card or bank account, write a letter requesting that the account is formally closed.  Not only will this improve your credit score, it is a useful way to avoid money from being scattered all over the place.  Don't let department stores and credit card companies lure you into opening new accounts by offering favorable interest rates and purchase discounts.  It's easy for credit to get out of hand by taking advantage of every credit offer that comes your way.

8.  Consolidate Your Accounts 

If you have several credit card accounts with outstanding balances, try to consolidate them into one.  Be careful and check the balance transfer interest rates and one-time fees.  Also, make a list of all your open Money Markets, Savings, CDs, IRAs, Mutual Funds, and other accounts to see if any consolidation can be done.  Keeping your money in fewer places eliminates all of the guesswork involved and reduces errors.

9.  Establish Automatic Savings 

Create a link from your checking account into a savings account that will not be touched.  This can usually be done through the banks and automatic amounts will be transferred over each month.  Most people will not put money into a savings account on a regular basis.  They may wait until a large tax refund check arrives or some other event to actually deposit money into savings, retirement or other accounts.  If you establish an automatic savings deposit every month, your accounts will begin accumulating money faster than you think.

10.  Clean up Your Files 

Make sure your paid bills are organized in a filing cabinet.  Keep individual files for paid bills.  Go through your files at the end of each year and throw out bills and receipts no longer needed for auditing purposes.  Contact your local IRS office to see how long records need to be kept for audits.  Usually federal tax return audits can be done three years back but cancelled checks may need to be kept for seven.  Consult the Internet for auditing and records-keeping procedures for your state or region.

(c) 2005 DebtGuru.com(r). This article may be freely distributed as long as the signature file and active link are included.

Michael G. Peterson is the Vice President of American Credit Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling organization that has assisted thousands of individuals and families with their financial situations through seminars, education, counseling services, and, debt management plans. For more information, and free consumer resources visit <a href="http://www.debtguru.com">http://www.debtguru.com</a>.

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10 Golden Rules for Stock Trading Success

Your stock trading rules are your money. When you follow your rules you make money. However if you break your own stock trading rules the most likely outcome is that you will lose money.

Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one discipline that can reap rewards. Read these rules before your day starts and also read the rules when your day ends. 

Rule 1: I must follow my rules.

Naturally if you develop a set of rules they are to be followed. It is human nature to want to vary or break rules and it takes discipline to continue to act in accordance with the established rules.

Rule 2: I will never risk more than 3% of my total portfolio on any one stock trade.

There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your capital base is fundamental to successful stock market trading over time.

Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.

Some traders have an even lower tolerance for loss. The key point here is to have set points (stop loss) within the limits of your tolerance for loss. Stay informed about the performance of you stock and stick to your stop loss point.

Rule 4: Never set price targets.

This is a style that will allow me to get the most out of rising stocks. Simply let the profits run. Realistically, I can never pick tops. Never feel a stock has risen too high too quickly. Be willing to give back a good percentage of profits in the hope of much bigger profits.

The big money is made from trading the really BIG moves that I can occasionally catch.

Rule 5: Master one style.

Keep learning and getting better at this one method of trading. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.

Rule 6: Let price and volume be my guides.

Never listen to any opinion about the stock market or individual stocks you are considering trading or are already trading. Everything is reflected in the price and volume.

Rule 7: Take all valid signals that show up. 

Don't make excuses. If an entry signal shows up you have no excuse not to take it.

Rule 8: Never trade from intra-day data. 

There is always stock price variation within the course of any trading day. Relying on this data for momentum trading can lead to some wrong decisions.

Rule 9: Take time out.

Successful stock trading isn't solely about trading. It's also about emotional strength and physical fitness. Reduce the stress every day by taking time off the computer and working on other areas. A stressful trader will not make it in the long term.

Rule 10: Be an above average trader.

In order to succeed in the stock market you don't need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer is no then you are in trouble and it's time to recommit yourself to your stock trading rules.

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How To Start Trading The Forex Market? The Analysis (Part 8)

HOW TO predict the Future ? 

by studying the Past (Technical Analysis):

1) The best traders don't discount one or the other but understand that having an understanding how the fundamentals influence market sentiment gives him/her an edge over those traders who don't.

2) In my opinion, TECHNICAL analysis is the easiest and most accurate way of trading the FOREX market.

3) "The number's don't lie" - all available information and its impact on the market, are already reflected in a currency's price.

4) Prices move in trends - the foreign exchange market is mostly composed of trends and therefore a place where technical analysis can be very effective.

5) History repeats itself - over time, certain chart patterns become consistent, predictable and very reliable. The question is SEEING them.

PRICES MOVE IN TRENDS

The traders who don't believe this obviously have no need to implement a trading methodology on technical analysis. But, research has shown that those who trade "with the trend", greatly improve their changes of making a profitable trade.

Finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility,especially when shorter-term movements tend to clutter the picture.

HOW does technical analysis help to determine what the trend is and HOW to trade with then trend versus against it?

Even though, you learn you how to use and read various technical indicators to identify a long- term trend, spot predictable chart patters and use certain rules to enter and exit a high-probability trade, and even though a ll this involves sound logic, parameters, methods, formulas, data, and research, these technical indicators, by themselves, are not the Holy Grail of FOREX trading.

It takes discipline and emotional control to stick with trading following through the inevitable market ups and downs. Keep in mind, good technical traders expect ups and downs.

Which technical indicators are the BEST?

NONE - technical indicators should simply be components of your overall customized, personalized trading system, and not a stand alone system.

The objectives as a FOREX Technical Trader are:

1) To figure out the price action of the currency pair. Price is the main concern. If the EUR/USD is at 1.2224 and goes to 1.2020, 1.1980, 1.1940- the market is in a down trend.

Despite what every technical indicator might predict, if the trend is down, stay with the trend. Indicators showing where price will go next or what it should be doing are useless.

A trader should only be concerned with what the market is doing, not what the market might do. The price tells you what the market is doing.

2) Always remember that technical indicators are only giving you confirmations based on what the market is telling you. So listen to the market and let it tell you which method, strategy or techniques you should use.

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How To Start Trading The Forex Market? Indicators (Part 6)

HOW DO Economic Events impact Global Currencies:

When I asked several traders about their thoughts about using fundamental analysis as a part of their trading decisions, I have received two opposite responses.

RESPONSE of Trader A

Fundamentals that you read about are typically useless as the market has already discounted the price. I am looking at (1) the long term trend, (2) the current chart pattern and (3) identifying a good entry point to buy or to sell.

RESPONSE of Trader B

I almost always trade on a market view. I don't trade simply on technical information alone. I use technical analysis and it is terrific, but I can't initiate or hold a position unless I understand why the market should move.

There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. 

Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders say about the future activity of other traders.

For me, technical analysis is like a thermometer. 

Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature. If you want to be a successful trader in the market, you always want to know where the market is- up – down- trending or choppy .You want to know everything you can about the market to give you an edge.

Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual.

It is very important to study the details of price action to see and observe. Studying the charts is absolutely crucial and alerts to existing disequilibrium and potential changes.

For forex traders, the fundamentals are everything that makes a country tick.

The release of economic & inflation indicators (i.e., consumer spending, employment cost index, government spending, producer price index, etc.), political actors, government policy or an individual event can set the market in a frenzy. These have to be considered when making the decision “ to trade or not to trade.”

Technical analysis, is a way of using historical price data in different ways to predict the future price of a currency pair.

Fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices, and you SHOULD trade in agreement with the supporting technical indicators.

Foreign exchange traders put the most emphasis on technical analysis, because traders around the world use similar charts and tools in predicting market trends.

The reason the FOREX market can be so predictable some times is that if the majority are using the same graph for determining patterns and trends, then it is highly likely that they will act in a similar manner.

So several thousand traders who have all charted the same resistance line, for example, will most likely either set their trades and direction conform to that line. 

When fundamental data is made available to the public there is a reaction from investors and speculators.

Information in the form of news and economic indicators is more vague than that of technical indicators. There is a lot of gray area in this type of analysis. The market will ultimately react to how people think the economic data compares to the current market situation. 

Economic indicators usually reveal information that "Should cause a currency to go up in price" or "May cause a currency to go down". The words “SHOULD” & “MAY” in the quotes above reveal the ambiguity of the fundamental data.

Here is an example of what analyzing fundamental data is like. Let's suppose there are six economic indicators (there are a lot more).

Let's call our six indicators 1, 2, 3, 4, 5, and 6. Now we wait for the data from our indicators to be published in a financial magazine or at an online source. We get the readings for our economic data for the EURO as following:

Indicator 1: is in a range where the Euro may go up

Indicator 2: is in a range where the Euro should go up

Indicator 3: is in a range where the Euro could go down

Indicator 4: is in a range where the Euro usually goes down

Indicator 5: is in a range where the Euro could go up

Indicator 6: is in a range where the Euro may go down

By looking at the above indicators, you don't know what the Euro is going to do. Furthermore, currencies are always traded in pairs. So you would have to get the fundamental data for another currency pair and compare it with the EURO. I think you can image that this is not a simple task.

I do not want to discourage you away from fundamental data. The best way to learn is to learn about one piece of economic data at a time. Eventually you will build a puzzle from all of the fundamental and technical data and make more informed trading decisions.

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How To Start Trading The Forex Market? (Part 5)

What are *PIPS* ?

Currencies are traded on a price/ point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you'll see something listed like this:

EUR/USD 1.2210/13

Explanation:

a) If you want to BUY the EUR/USD ( meaning you BUY EUROS and SELL US$ ) you buy 100,000 EUROS and you SELL 122,130 US$, or in other words you receive 

122,130 US$ for 100,000 EUROS.

B) If you want to SELL the EUR/USD ( meaning you SELL EUROS and BUY US$ ) you buy 122,100 US$ and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US$.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. 

For example a quote of USD/CHF 1.3000 means that fore one U.S. dollar you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US$.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/CHF quote above increases to 1.3050 the dollar is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as EUR/USD 1.2080, meaning that for EURO you receive 1.2080 U.S. Dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one Euro, British pound or an Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the calculation is the same. For example, a quote of EUR/JPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going “ LONG ”)and SELL ( going “ SHORT ”) in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don't keep losing money. Most of the novice traders are lowering their stop loss just to “prove they are right” or “hoping that the market will reverse”. 99% of these trades, are ending up with more losses. Most of the profitable trades are usually "right" immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses. 

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going "long") or a *sell position* (known as going "short").

As an example let's assume you've been studying the EURO. The EURO is paired first with the U.S. dollar or USD. 

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EUR/USD pair meaning you will simultaneously buy EUROS, and SELL dollars).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EUR/USD pair is trading at:

EUR/USD: 1.2010/1.2013

As you you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market. 

As an example, lets say you bought one lot EUR/USD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS? 

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bid/ask price for USD/JPY is 107.50/107.54, meaning you can buy $1 US for 107.54 YEN, or sell $1 US for 107.50 YEN.

Suppose you think that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US $100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be $ 250.)

As you expected, USD/JPY falls to 106.50/106.54, meaning you can now buy $1 US for $106.54 Japanese YEN or sell $1 US for 106.50.

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US dollars, divide 100,000 by the current USD/JPY rate of 106.54

Total profit = US $938.61

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