Forex indicator is a series of calculations which may be used to predict fluctuations in the exchange rate for particular currencies. Professional Traders investing and trading in forex currencies use Forex indicators to establish their next ‘move’ (whether to buy or sell).
Forex Indicator : Relative Strength Index
There are several Forex indicators you can use to predict currency movements. Some you need to purchase and others are free. One forex indicator is the Relative Strength Index, or RSI. This index is a measure of the ratio of appreciations to depreciations expressed between the values of 0 to 100. If you take a look at an RSI graph and notice that the value is high (greater than 70 or so), this suggests that prices have risen higher than the market expected them to, or the currency was ‘overbought’. A low RSI value (lower than 30) suggests that the rate did the opposite, or was ‘oversold’.
Forex Indicator : Fibonacci Numbers
Fibonacci numbers is another forex indicator that can be used to make decisions on whether to buy or sell. Using a ‘Fibonacci retracement’ strategy, it is possible to decide whether a change in trend (a change from depreciation to appreciation, or vice-versa) is likely to occur, although the strategy involved in doing so is rather complex, and an explanation of the strategy is likely to be way beyond the scope of this article. If you are an experienced Forex trader, taking a look at the Fibonacci retracement strategy could be a great way to make buying and selling decisions.
Remember, Forex trading involves alot of risk, so it is possible to both gain money and lose money, so consider yourself warned about this fact!
written by Constantine Njeru
\\ tags: Buy Sell, Currency Movements, Depreciation, Exchange Rate, Fibonacci Numbers, Fibonacci Retracement, Fluctuations, Forex Indicators, Forex Indicators Explained, Forex Investing, Forex Investing Tips, Forex Trader, Forex Trading, Forex Trading Tips, Graph, Professional Traders, Relative Strength Index, Risk, Rsi, Scope, Trading Currencies
IPO Laddering was a practices that was common in the 1990s tech bubble. Laddering requires IPO investors to buy more shares once trading begins. Critics complain this can create false momentum.
IPO laddering was an IPO risk during the 1990s tech bubble.
A law website explains how Laddering tricks retail investors:-
Investors observe that an IPO stock’s prices are rising and join in the trading, assuming the shares are moving at an honest rate. Laddering artificially balloons the value of a stock, making it appear to be a hot pick before investors. After the IPO stock’s value rises, the client-investors often sell their shares and make huge profits. Those who are not client-investors of the underwriting firms, and thus not aware that the value of the stock has been inflated, fail to sell, and end up holding highly overpriced shares.
People whjo make money from IPO laddering
In the end the people who make money are the executives of companies that the underwriting firm does banking business with and the investment banks that boost commissions.
written by Constantine Njeru
\\ tags: 1990s, Balloons, Commissions, Investment Banks, Ipo Laddering, Ipo Stock, Momentum, Money, Profits, Retail Investors, Risk, Stock Prices, Stock Value
In January 2011 Groupon raised near $1 Billion from investors. In the same month dealbooks NYtimes reported Groupon was discussing with bankers about a possible IPO.
Groupon IPO Date.
The New York times reported Groupon may go public as early as this spring. (end of 2011). Making the young internet company one of the Tech IPOs of 2011.
Groupon IPO Price
The article further claim, bankers value the three-year-old online coupon distribution site at $15 billion. This figure is no too ambitious if you keep in mind Groupon, was profitable after just eight months of operations.
The major risk about Groupon is that many people believe their business model of making money can easily be copied. Group is minimising this by going for scale, it has bought copy cats all around the world.
written by Constantine Njeru
\\ tags: 1 Billion, Business Model, Copy Cats, Coupon Distribution, Eight Months, Internet Company, Investor, Investors, Ipo Price, Ipos, Making Money, New York Times, Nytimes, Risk
A reverse mortgage is a loan available to senior citizens above age 62. What happens is that the equity in a home is used to give a loan. The loan provides the borrower with an income stream. The loan amount paid out in a steady stream of payments or in a lump sum like an annuity.
What happens is that the Senior citizen gets an income to live on in his sunset years while the bank now owns the home. The reality of the situation will come clear when the borrower dies. The beneficiaries of the deceased estate will only be entitled to any equity that is left after all of the cash from the deceased’s estate has been used to pay off the mortgage. Sounds scary!
Risk & Disadvantage Of Reverse Mortgage
- Reverse mortgage is expensive because a borrower has to pay high upfront costs e.g. origination fees, mortgage insurance, appraisal fees & attorney fees.
- The borrower loses full ownership of their home.
- The family is left with a mess to deal with when the borrower dies.
written by Constantine Njeru
\\ tags: Amp, Annuity, Appraisal Fees, Attorney Fees, Beneficiaries, Deceased Estate, Income Stream, Insurance, Insurance Appraisal, Lump Sum, Mortgage Insurance, Mortgage Loan, Origination Fees, Reverse Mortgage, Risk, Senior Citizen, Senior Citizens, Steady Stream, Sunset Years, Upfront Costs
An adjustable rate mortgage is a mortgage that starts you off with a low interest rate for the first two to five years. After two to five years the interest rate resets to a higher market rate. But borrowers can just take the equity out of their homes and refinance to a lower rate once it resets.
Advantages Of Adjustable Rate Mortgage
They allow you to buy a larger house than you can normally qualify for and have lower payments that you can afford.
Disadvatage & Risk of Adjustable Rate Mortgage
When housing prices drop, borrowers tend to find that they are unable to refinance their existing loans. This leaves many borrowers facing high mortgage payments that are two to three times their original payments.
written by Constantine Njeru
\\ tags: Adjustable Rate Mortgage, Amp, Borrowers, Existing Loans, Housing Prices, Interest Rate, Low Interest, Mortgage Payments, Mortgage Rate, Risk, Three Times
When it comes to Forex Currency Trading the regulator sets rules on the amount of leverage or margin allowed for trading.
The new rules set by the U.S. Commodity Futures Trading Commission, or CFTC rules prohibit retail forex dealers from offering more than 50-to-1 leverage for major currencies such as the dollar and the Japanese yen or 20-to-1 leverage for more-exotic currencies.
This rule protects forex currency traders from taking large risk that may lead to massive losses.
written by Constantine Njeru
\\ tags: Cftc, Commodity Futures Trading, Commodity Futures Trading Commission, Commodity Trading, Currencies, Currency Traders, Currency Trading, Dollar And The Japanese Yen, Forex Dealers, Forex Traders, Forex Trading, Futures Trading Commission, Leverage, Massive Losses, Risk
If you are just getting started into the world of forex currency trading it is important you read as much information on how forex currency trading works.
One forex currency trading article I found useful in understanding how the world of currency trading works is Currency Trading Gets Easier but remains risky by Wall Street Journal.
The article does not teach you how to make money from currency trading but it is full of knowledge on the industry. These are benefits I found in the article:-
- Links to reliable forex brokers
- Rules governing trading in forex currency.
- Interview with a 53 Year Old Pro Forex Trader
- Risk of Forex Currency Trading
The article is not a tell all article but any beginner currency trader interested in the world of Forex currency trading will need to read alot more forex articles and books to understand currency trading.
written by Constantine Njeru
\\ tags: Articles And Books, Currency Trader, Currency Trading, Forex Articles, Forex Brokers, Forex Currency, Forex Trader, Forex Trading, How To Make Money, Money Currency, Read Books, Risk, Trading Currency, Wall Street, Wall Street Journal, World Currency
I was reading the latest quarterly report from Berkshire Hathaway, they just reported 40% profit decline for quarter ending June 2010.
The business remains solid but the company profits seem to be dragged down by its derivative contracts that the company signed in 2007.
The contracts are tied to equity indices. When the US stock market rises Berkshire gains but when the the stock indices slide down Berkshire looses.
In the last quarter the paper losses from this derivative contract was $1.5 billion.
In 2009 second-quarter the stock market soared & Berkshire recorded a mostly unrealized $1.5 billion gain on its derivatives in last year’s second quarter.
Warren Buffet himself correctly predicted the value of those derivatives would vary widely quarter to quarter.
How big a risk are this derivative contracts? Warren Buffet himself once referred to them as weapons of mass destruction. Only time will tell.
For a better understanding of this derivative contract read this article Berkshire misunderstood derivatives.
written by Constantine Njeru
\\ tags: Amp, Berkshire Hathaway, Company Profits, Decline, Derivative Contracts, Derivatives, Investing, Last Quarter, Paper Losses, Quarterly Report, Risk, Second Quarter, Slide Down, Stock Indices, Us Stock Market, Weapons Of Mass Destruction
I was over at Amazon online market and browsed some of the books on market Psychology. I read the reviews and the following chart sums up the psychology of the market.
 Copyright wallstreetfoollies.com Image source wallstreetfollies
Some of the books review on Market Psychology I read were
1. Art of Contrary thinking by Humprey Bancroft Neil
2. The Crowd : A study of popular minds by Gustva Le Bon
3. Speculation as a fine art of life by Dickson G Watts
4. Why You Win or Lose : The Psychology of speculation by Fred C. Kelly
5. The Nature of Risk by Justin Marris
written by Constantine Njeru
\\ tags: Amazon, Art Of Contrary Thinking, Art Of Life, Bancroft, Books Review, Books Reviews, Crowd, Dickson G Watts, Fine Art, Fred C Kelly, Humprey, Market Psychology, Marris, Psychology Books, Risk, Speculation, Stock Market, Sums
Mortgage owners who cant keep up with monthly payments are making a drastic decision by walking away from their mortgages. Mortgage companies refer to it as strategic default.
Walking away from a mortgage can be in your own best financial interest, after all big real estate companies do this every day. But before you make that decision make sure you are familiar with your states rules on mortgage defaults. Some states are pro borrowers while others are pro lenders.
Some Risks and Cost associated with walking away from a mortgage
- In certain states, a borrower can be sued and personal assets can be subject to a deficiency judgment.
- Once a mortgage goes into default, a borrower’s credit rating is severely tarnished, making it more expensive, if not impossible, to qualify for any new form of credit.
- anything that involves a credit review, such as obtaining auto insurance or getting a new job, can be complicated.
Before you make the decision to walk away from your mortgage consider the above cost. Everything in life has risk
written by Constantine Njeru
\\ tags: Auto Insurance, Borrowers, Credit Rating, Deficiency Judgment, Drastic Decision, Financial Interest, Insurance, Lenders, Mortgage Companies, Mortgage Defaults, Mortgage Mortgage, Mortgages, New Job, Personal Assets, Real Estate Companies, Risk
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