Minimising your Forex Investment Risks

The release of the FOMC minutes on Wednesday once more showed the risks involved in forex trading. Primarily, however, it showed us the lack of predictability in the market, proving that literally anything can happen.

Investors and brokers the world over were blogging about their apprehension over the announcement, but almost all predicted that tapering (on some scale at least) would happen at the September meeting.

The announcement that we would see no tapering came as a complete shock to many and once more highlighted the risks in the forex markets. There are, however, ways that you can navigate and minimise these risks.

 Leverage Cuts Both Ways

Always remember that leverage can cut both ways when you’re trading currency. Put simply, this means that although winnings are incredibly high, losses can be extremely high as well. This is a factor that many people simply overlook, making dangerous wagers as a result.

 Don’t Believe the Hype

People who trade in the world of forex are often attracted to it after hearing about the exceptionally high winnings of other punters. On almost every forex internet forum, there seems to be the story of someone who started forex trading and has since made enough money to retire. Now, although this is possible, it is also incredibly unrealistic and will only account for a very minimal percentage of the market.

 In addition, although that person represents a great success story, he has also taken an incredible gamble; a gamble that he may have been unable to repay if the tide had turned the other way.

 Gains like these are also unsustainable and, just because you won big once does not mean that you’ll win big again. In order to limit these risks and in order to keep your profits, you will have to learn to be a prudent trader.

 Carefully Consider your Stake

Just because you have a large amount of money does not mean that you should invest it all in one fund. People who do this are often blinded by their potential winnings rather than being realistic about their investment. When you trade through a broker, it is easy to get carried away as you are simply moving digits around on screen. Always remember that this is real money though, and never get carried away. A helpful tip is to imagine the money you’re investing as a pile in front of you, would you invest it then?

It is vital to control your stake in order to ‘stay in the game’ even if you  incur losses. If you only risk 3 percent for example, and you lose 3 trades in a row, you’ve still lost less than 10 percent of your original balance.

To conclude, there are a number of ways that you can minimise your forex risks. You must, however, be aware that it is impossible to eliminate risk entirely and that there will always be a potential for losses as well as gains.

If you follow the above steps and become a prudent trader then you will minimise these risks, increasing your chances of generating a profit.

Miserable Monday myth?

Ever feel like you just can’t stand Mondays?  That’s a fairly common feeling, but a recent study says that nobody gets any relief from “hump day” on Wednesday – it takes a Friday afternoon to start feeling happier.

We may say we hate Mondays, but research suggests Tuesdays, Wednesdays and Thursdays are equally loathed.US investigators who looked at a poll of 340,000 people found moods were no worse on Mondays than other working days, bar Friday.People were happier as they approached the weekend, lending support for the concept of “that Friday feeling”.

via BBC News – Scientists dispel Miserable Monday myth.

What does it mean if almost half of Americans die with less than $10,000 in assets?

A new study finds that many Americans die with “virtually no financial assets.” For more than 46% of us, that translates into less than $10,000.The study – put out by a nonpartisan outfit called the National Bureau of Economic Research – finds that many Americans spend their golden years dependent on the government.

via What does it mean if almost half of Americans die with less than $10,000 in assets? – Cafferty File – Blogs.

High Frequency Trading and the Future

Click through on the link below, and be patient….


This article shows the increasing randomness of high-frequency trading:

…what we see here is relatively low levels of high-frequency trading through all of 2007. Then, in 2008, a pattern starts to emerge: a big spike right at the close, at 4pm, which is soon mirrored by another spike at the open. This is the era of traders going off to play golf in the middle of the day, because nothing interesting happens except at the beginning and the end of the trading day. But it doesn’t last long.

You have to consider the fact that, when investing, you are competing against super-intelligent artificial intelligence.  That AI is taking millions of news articles, trends, data points and even seemingly unrelated data (weather, time of day, movement of other stocks) and trading on that information.  You’ll never compete with that.  Your best bet?  Join the party…. invest in broad-based mutual funds.

Via “Chart of the Day, High Frequency Trading Edition”,

Workers Volunteer an Extra Two Months Each Year

smart phone

One of the ugly aspects of the smart phone revolution has been the always-connected-to-work phenomenon.  Once mobile phones become common in the workplace, you could always be reached.  That was bad enough, but smart phones meant you could always be reached by email.  Once that idea took hold, people started proactively checking to make sure they DIDN’T have email, just to make sure they weren’t needed.

Some 68% of us check work email before 8 a.m., with half of us doing so before our heads leave the pillow. (The average check-in time of the 1,000 randomly-selected respondents: 7:09 a.m.) At the other end of the day, 69% of us can’t slip into slumber unless we’ve checked that old work email one last time.

But perhaps the most eye-popping part of the survey is how much all that extra time adds up to. Simply by answering work-related calls and emails when we’ve left the office, the average respondent is working an extra seven hours a week. That adds up to 365 hours a year.

Assuming eight-hour days and five-day weeks, that’s around two months per year of unpaid overtime — and you’re putting it in voluntarily.

All of this in the midst of a recession.  Try to calculate your average salary based on a 14-month year working 10+ hour days.  It’s frightening.

via Why You’re Probably Working an Extra Two Months This Year.

Why Women Still Can’t Have It All

An interesting read for both women and men, primarily because it’s a good examination of what it takes to have a super-high-powered career (hint:  it tends to be at the expense of a family life).

It’s time to stop fooling ourselves, says a woman who left a position of power: the women who have managed to be both mothers and top professionals are superhuman, rich, or self-employed. If we truly believe in equal opportunity for all women, here’s what has to change.

via Magazine – Why Women Still Can’t Have It All – The Atlantic.

What’s the Future of Work?

Brian David Johnson

As Intel’s chief futurist, Brian David Johnson spends much of his time ‘living’ in the year 2022, about 10 years ahead of our time. He studies what life will be like, how technology will change, and how people will feel about those changes.

Many people ask him questions about the future, including whether they’ll still have to work. His take? Work isn’t going anywhere. But how, where and with whom we work will undergo some big changes. Here’s a look at the future of work according to Johnson:

via What’s the Future of Work? – At Work – WSJ.