Frenday.com

By Stera on Feb 9, 2010 | Reply

Killian is right in that 95% of all new forex traders lose their money, usually within 3 months.
The reason is that it’s a market made for the big players who have millions of dollars behind them. They can afford to ride the volatility of this unpredictable market.
Say, for example, the GBP is increasing in value against the USD (which it has recently), it won’t go up in a straight line. It will go up a few pips, then down a few, then up a few more, and so on. Sometimes it will completely reverse and go right down by dozens of pips before reversing again and resuming its upward trend.
This is what catches nearly all small traders out. They usually have limited capital and therefore small stop loss levels (at which they will automatically have their positions closed in order to avoid a disastrous loss). This makes them very vulnerable to the volatility.
Yet most sellers of forex trading “systems” will advise you to have tight stop loss levels! This is a recipe for disaster. On the other hand large stop loss levels, though safer on most trades, leave you open to the occasional large loss that can more than wipe out a succession of modestly profitable trades.
There is actually a little-known alternative to trading forex through spread betting, which is much safer, and you can read about it at the resource listed below.
Philip Gegan

By magnetic on Feb 9, 2010 | Reply

Since you are asking this question, I’ll suggest that if you are a business person you hire a good accountant.
In general, businesses have 6 main activities that are recorded in accounting.
Sales – what did you sell today
Expenses – labor, taxes, insurance etc (Cost of goods for merchandise is also another category)
Income – the difference between sales and expenses
Assets – What you started with for money, equivalents, and hard assets
Liabilities – Indebtedness to vendors and lenders
Equity – Net worth (if the assets paid all the liabilities, this is how much would be left)
As you sell stuff, you spend money for expenses to conduct the sales and you end up with income.
The classic lemonade stand example. Mom lends you $10 for supplies.
Assets – $10 cash
Liabilities – $10 owed to Mom
Equity – $0
You buy $10 supplies from the supermarket. Set up your stand on Wall Street and sell $100 of lemonade in 4 hours.
Sales – $100
Expenses – $10 + plus your time
Income – $90 – your time
End of day – no supplies left
Assets $100
Liabilities $10 owed to Mom
Equity $90
If you are spending money on a project. Those expenditures could all be for assets (you built a building or purchased machinery), or expenses (you hired a chemist to develop a new hair shampoo).
Your accountant will advise you along the way.
Good Luck!! ;-D

By Edoardo At TheMarketFinancial on Mar 6, 2010 | Reply

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