Sunday, February 18, 2018

Are You A Mean Reversion or Trend Following Type of Trader?

One of the first steps for beginning day traders is to determine one's trading philosophy. You should have an idea of how you want to approach your analysis and trading, develop a view of how the market behaves, and ultimately place trades based on this philosophy.

Generally speaking, there are two major philosophies in Forex trading: Mean reversion and trend following. Both are quite different, and the millions of Forex day traders around the world typically use one or both of these styles in their day-to-day efforts. Now, you might be wondering: What the differences between these two Forex strategies? Which one is best-suited for me? And what are their advantages? Here is a quick explanation:

Mean Reversion in Forex Strategy

The premise of mean revision trading is the idea that the markets fluctuate around a state of equilibrium. In Forex, that would be the exchange rate for a currency pair moves up or down around a mean average value, and ultimately returns to the mean average. To profit, mean reversion traders enter trades when values deviate up or down from the mean average. And when the currency pair reverts back, the trader exits the trade, hopefully taking a profit as a result.

In day trading, mean reversion is fairly common, because day-to-day currency values tend to remain fairly stable without large swings. In fact, it's estimated that the markets tend to stay in a specific range 60 to 70 percent of the time, and stability is the ideal condition for mean reversion trading.

In general, mean reverse traders look for indicators as to when a shift is happening, and two common types of indicators are Bollinger Bands and the Relative Strength Index (RSI). Both are used to determine when a currency pair is overbought or oversold. When a security is overbought or oversold, the idea is that it will move back to the average. It's reached a peak before returning to the median value. The biggest challenge is finding the perfect point to enter these trades as the pair deviates up or down, as it's sometimes unpredictable to determine how long a deviation will happen before the value returns to the median.

Trend-Following in Forex Strategy

Trend-following traders tend to look for trades that move away from the average for a longer period of time, and as such, it's typically a long-term trading strategy. Whereas with mean reversion, the idea is that the exchange rate of a currency pair is oscillating between two points, trend-following means the trader is betting that the trend will continue and not move back to the mean.

Because currency pairs tend to stay within a range for about 70 percent of the time, trend-following, in general, results in fewer winning trades. This happens because it's difficult to predict when a trend might occur. But, because trend-following includes the possibility of a large trend in one direction, the winning trend trades may have greater profitability.

Should You Use a Mean Reversion or Trend Following Strategy?

Now that you have the basic idea of both philosophies, you're probably wondering which one is better? Well, it depends. Market factors may be in place for relative stability in an exchange rate. In this case, it's likely that currency pair might enter a period of fairly stable ranging. In that case, a mean reversion strategy might be more beneficial.

Greg Sawyer discussed here about Forex currencies. To know more about Forex Master Levels, don't forget to visit

Forex Trading Ways for Prediction

Actually, Forex trading is like whether prediction. Currency doesn't change in random fashion. Instead it changes in predefined fashion that is defined by the market demand. Therefore trading is not impossible provided study and experience is performed correctly.

Currency prediction for Forex trading is performed in two major ways. First the technical indicators, second, the market analysis based on economical and news trends. Both must be done in concurrent fashion.

Beginners could predict only based on technical analysis but advanced traders must predict based on news heard related to economy trends.

Technical analysis is a smart way to predict currency change based on mathematical formulas. Users may not need to know mathematical details concerned with this type of analysis. They need to know only how those indicators used in correct way.

For instance, for stochastic indicators, this way to predict currency change implies that to see if the indicator number goes very low or very high for relatively long period. In this case a trading event appears and the trader may buy or sell the currency being traded.

On the other hand, economical analysis is used to predict for currency change based on the financial state of the country owning the currency being traded. This depends on the industrial level of the country and also the political state of the country. For instance, if the country is in war, it will affect the currency value of that country.

As mentioned above, this type of analysis needs advanced traders to be able to use it. The simpler is the technical indicators and even not all of them as some indicators may be difficult to use.

A Forex trading strategy is a way to predict currency change based on combination of technical indicators and news analysis. For instance a Forex strategy may have two technical indicators like stochastic and MACD and no news analysis included in the strategy.

For more successful strategy, the trader must use less amount of indicator for simplicity, as a general rule, more simple equal more success. This applies to many fields in our life and not only in Forex trading.

Predicting Currency change in more simple fashion, will give you rough idea to help make decision to buy now or sell now. The ability to well predict for currency change is the key to success in trading. In other words, failing to predict how the currency is going lead to failure in trading at all and lead to losses.

Greg Sawyer discussed here about Forex currencies. To know more about Forex Master Levels, don't forget to visit

Saturday, February 3, 2018

Self Directed IRAs: What They Are And How They Help

Retirement planning is very important, especially for salaried professionals. It's advisable to start early, but no time is a bad time, especially when we are talking of retirement plans. There are definite benefits of starting early, of course. It gives you time to look at your options and adjust. It sounds surprising but the fact is that a majority of the world's population doesn't plan for their retirement at all.

Where should you start? Make a plan, first of all. When you start with a goal in mind, it's always helpful. It gives you a sense of direction and you don't end up becoming a ship without a rudder. The retirement plan needs to figure in the retirement needs of yours.

On an average, you will need at least seventy percent of your current salary but that can differ based on the lifestyle you lead right now. By starting early, this is another advantage you get. You can easily know where you want to be so that you can actually go and meet that goal.

You may want to look into Individual Retirement Accounts, known as IRAs, as they have numerous tax benefits. You can get in touch with a financial adviser to know more about the tax benefits, and how they apply to you. You should also look for other options, options that most people don't consider.

What are those? Self directed real estate IRA, for example, is something most people don't take into account. I wouldn't be very surprised if the option isn't known to people here. Most people don't know but IRAs can include assets such as real estate. It's something that you can look into, if you want to.

The risks, however, are a lot higher if it's something you don't know anything about. In such cases, an expert can really help you. You should also try and understand how things work yourself. In the end, the more you know, the better your decisions end up being. So spend time on learning yourself even if it sounds uninteresting and technical.

Though research is important, it doesn't replace your own judgement. Ultimately, you may end up finding that while self directed IRAs are good, they aren't your cup of tea. That is fine-it doesn't have to be for everybody. You should talk to your financial advisor, see what he recommends, see what your options are and go ahead based on that.

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How to Live the Lavishly Without Breaking the Bank

Many of us have been negatively affected by the economy in recent years. Others have seen the effect that it had on individuals in their area, even if they were not affected on their own. As a result, a majority of the population has turned to a more frugal way of living and then tightened their wallets. It is important to note, just because you are living frugally does not necessarily mean that you want to miss out on life altogether. There are some things that you can do to help keep your lifestyle without breaking the bank in return.

One thing that is very important if you are planning on living frugally is to make sure that you are always using coupons. If there is not a coupon available, such as if you want to eat at a specific restaurant, try to at least save in some way or another. One school of thought is to go during happy hour so that you can have an alcoholic beverage but you do not pay full price. Of course, coupons are always going to be available for various grocery items and there are also buy one get one free deals in many grocery stores. When you take advantage of those savings, you will have more money in your pocket.

Scheduling yourself properly is also one way for you to save money. If you have an errand to run, tried to incorporate other errands or necessary tasks into the errand run. This is not only going to save you money, it is going to save you quite a bit of time. You may also be able to save further if you group your errands and then take a bike or walk instead of taking your car. This will help you to save money on gas and it has a positive impact on the environment as well as your health.

There are going to be some times when you want to splurge. How can you do this without going off of your frugal lifestyle? One way is to boost the amount of income that you have during the month that you want to splurge. This can be done by selling something around the home that is no longer needed. As an example, you may be able to sell a designer watch or perhaps sell gold jewelry for cash. You might be surprised with how much you are able to get, even for a broken piece of gold jewelry. Why not get an estimate today? You can be putting that cash in your pocket by tomorrow.

One other thing that you can do which will help you to save money consistently is to stop spending money on certain items. By looking for free offers, either locally or online, you can still live the same lifestyle at a much lower price. If you go for online freebies, you will find them in your mailboxes regularly. If you find them in your local area, you will be able to take advantage of what they offer easily and conveniently. Although you can't get everything for free, getting something for free can certainly help with the budget.

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Is It Always Less Risky To Invest In Stock Mutual Funds Than Directly In Stocks?

Mutual funds, are often claimed to have two major advantages over direct stock purchases:

1. They provide the benefits of diversification for small and medium investors, who would otherwise be unable to afford it.

2. They provide small and medium investors with professional management, they would otherwise be unable to afford.

Let's look at diversification first:

Mutual funds and stock investors face two kinds of risk. The first is nonmarket risk; risk their portfolio will underperform the market. The second is market risk; risk the market, as a whole, will perform poorly.

Diversification can reduce nonmarket risk, but it has no effect on market risk. Each unit of the fund, purchased by an investor, represents a diverse portfolio of stocks held by the fund. That's how diversification is achieved through mutual funds.

However, studies show nonmarket risk, through diversification, can be substantially reduced through owning as few as five stocks of companies in substantially different industries. When we invest an equal dollar amount in five stocks, nonmarket risk is only 14% above the minimum that can be achieved through diversification. In the case of ten stocks, nonmarket risk drops to just 7% above the minimum. This means an individual investor does not need to purchase a great many stocks to benefit from diversification. It is quite possible for small and medium investors to cut nonmarket risk without mutual funds.

Professional Management

The results of professional management are mediocre for most funds. As many as 75% of stock funds consistently underperform stock market averages. For this dubious performance, fund holders often pay sales and/or redemption fees and almost always pay management fees. It is very important for investors to watch management fees, in particular, and make sure they're justified. Here is why.

Studies show that over 25 years, a tax sheltered mutual fund with a 7% annual return and 2.l% annual management fees, will leave only 61% of the accumulated capital for the investor. The remaining 39% goes to the funds company! When you buy stocks directly, there are no management fees.

Former Magellan manager, Peter Lynch, one of the most successful fund managers ever, freely admitted that it is not unusual for individual investors to beat the returns of mutual funds.

Another risk is that your fund may purchase stocks you'd never purchase yourself.

I don't mean to disparage mutual funds. They definitely have their purposes. But are they always less risky than direct stock purchases? Not necessarily. The term "buyer beware" definitely applies to mutual funds.

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Friday, February 2, 2018

Saving Money By Keeping a Change Jar

In this tough economy, many are looking for ways to be more economical or save money in a manageable way. While many of us only use credit or debit cards to make purchases, there are still some people who prefer to use cash. If you are one of these people who prefer to pay cash, you probably end up with a lot of unwanted pennies, nickels, dimes and quarters in your pockets or purses. So, my suggestion and money-saving tip is to save this change. It will add up more than you think over time.

All through college, I worked in a restaurant, which means I always had cash and plenty of change. Using a large plastic pretzel jar that I converted into a change collector, I would save coins for a few months. Once the container was a couple inches full of change, I would take it to a coin sorter. These machines can be found in Meijer and many other large grocery store chains. The coin sorter was great at first because it quickly counts the change, which can be a tedious process, however, I noticed that it was taking $.09 per dollar. While $.09 per dollar does not sound like a lot, if you do that math, it adds up. So, my solution was to instead roll the change myself.

Rolling the change took a while, maybe an hour or so when the large container I had was a couple inches full, but that amount of change was usually $100-$150. Change really can add up fast.

Once I realized how much I could save up by just collecting change, I started to use this jar as a money-saving device. It started with the holidays. Every year about six months prior to Christmas In addition to saving change, I would also save $5 per shift I worked at the restaurant in order to have money for gifts. I would work on average about five shifts per week, which meat $25 per week or $100 per month on top of my savings in change. This was always more than enough money for gifts and would help with traveling expenses, like gas, during the holiday season. I even later used this technique of saving money to equate enough funds for a mini vacation.

So, how can you make this method of money-saving work for you? I suggest starting by finding a jar or other container that you will use to save any coins. You will want something at least the size of a larger 24-ounce Ball jar, for example. Even if you more commonly pay using a credit or debit card, there will still be occasions where you will use cash, which means you will end up with some change. Be sure to put all coins you have into the jar. When you are making purchases, refrain from paying in exact change. Think of breaking a dollar as an opportunity to add more to your savings. When your container is full, or if it is a very large jar like mine, mostly full, rather than taking it to a coin sorter that will take money out per dollar, dump out all your change, sort it and roll it. Then, take it to your bank and deposit it in your checking or savings account. You will be surprised just how much money you can accumulate just by saving your pennies, nickels, dimes and quarters.

To read more about this software, click here: Forex Master Levels. Greg Sawyer writes often on business, trading, and finances. For more on how this trading program works, visit

Contrary To Popular Belief: Money Can Buy Your Salvation

This morning while at the gym performing my cardio exercises I pondered over the many blessing I may have taken for granted throughout my life. As I thought back I realized that many of the comforts I've experienced where a result of things I have been able to buy and the lifestyle I live. The foods I eat, the clothes I wear, the home I live in are all the results of my ability to pay for these comforts. My vehicle, the schools my children attend, the trips my wife and I travel, and other luxuries have all been financed by the money that's spent to support these habits.

This revelation surprised me because for many years I was led to believe that "money was evil" or that "the love of money is the root of all evil". But as I contemplated, everything I own or have been given to me was done so because money was allocated for these things. If money is so evil then why do we each wish to have lots of it? If the love of money is so wrong then why is there a financial system in place that proves that those you don't have any suffer the most?

"The rich man's wealth is his strong city: the destruction of the poor is their poverty" (Proverbs 10:15). Without even dissecting this scripture, you can look around at your own life (and others who lives are the opposite of yours) to decide if this scripture is correct.

Rather a little or a lot, having money offers salvation from many of woes in life. It offers shelter, rescue from hunger and lack of clothing. It offers liberation, emancipation, and deliverance. The freedom of your automobile saved you from having to walk long distances or the discomforts of traveling via public transportation. Most Americans work 40+ hours a week for money so that they are emancipated from the agony that having no money causes. However, many of you work your job with the distorted belief that money is evil, or that loving it is wrong. Yet, scripture teaches that money offers deliverance from many trials and tribulations. "A feast is made for laughter, wine makes life merry, and money is the answer for everything" (Ecclesiastes 10:19).

You don't "love" money, but I'm sure you love what you're able to do with money. I can imagine that you love being able to shelter your family, and the ability to heat/cool your home from the harsh elements. You also love being able to give to charity, those who are without, or helping to finance the needs of your place of worship.

Money offered you salvation from ignorance because it paid for your education. It rescued you from sleepless nights and stress while you rest comfortably in your bed knowing that all of your bills have been paid. Each day of your existence has cost money for you to be alive. Rather it was your own money or that of someone else's, it would be extremely difficult for you to be reading this article if money hadn't saved your life.

If you are lacking in your finance and want more, here are a few things that you can apply to attract more money into your life:

A). "Do not revile the king even in your thoughts, or curse the rich in your bedroom, because a bird in the sky may carry your words, and a bird on the wings may report what you say" (Ecclesiastes 10:20).

This scripture simply means to guard your tongue and to be careful what you say. It's very difficult to attract lots of money if you dislike those who have more than you. Instead of envying wealthy people, learn from them instead. The easiest way to have what affluent people have is to learn from them and model what they have done.

B). "Ship your grains across the sea: after many days you may receive a return" (Ecclesiastes 11:1)

Save your money and research opportunities for investments. You have to diversify your income and allow money to work for you instead of looking for more ways to work for money. Make money a slave to you no longer a slave to it.

C). Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land" (Ecclesiastes 11:2).

Several researches have concluded that 80% of Americans hate their jobs. During this last recession many of the working class lost their "comfortable jobs"; they lost the security they thought their job offered. It is imperative that you find several avenues for attracting money. I recommend that you start by learning how to make money doing what you are most passionate about. If necessary, set up a strategy that will allow you to earn an income on the side doing what you love while working your current job simultaneously. Once you have supplemented the income from your principal employment you can fire that job if you so chose.

Money is NOT evil. The experience of not having money is what's evil!

To read more about this software, click here: Forex Master Levels. Greg Sawyer writes often on business, trading, and finances. For more on how this trading program works, visit