10 MISTAKES EVERY INVESTOR MAKES (MY EXPERIENCE)\

10 MISTAKES EVERY INVESTOR MAKES (MY EXPERIENCE)\

Throughout my years of investing I have had the opportunity to be a
part of many different experiences – some good and some bad. What
I have learned by being trained and working with investors in all
different markets is that the discipline to follow the fundamental rules
to investing can make or break someone’s bank account. Sadly, I’ve
seen a lot of great investors go from multi-millionaires to dead broke
in a matter of minutes because they became foolish.
Whether I have seen a stock trader or someone who works in the
options and futures pits, I have found that when they lose their shirt it
is because they didn’t stick to the basics.
While even amateur investors know these basic rules to investing, it
is much easier said than done. Maybe this is because most investors
have a competitive edge, and we think we can out-perform or
outsmart the next guy. But the bottom line is it is pretty tough to
outsmart the market.
Investing is a zero sum game. For every winner there is a loser,
which is what keeps the market efficient. Knowing this, it is possible
to develop an edge in order to win more than you lose. This is why
some of the best trading systems make people so much money.
These systems have found a way to analyze trading opportunities
and automate the process so you can get in and out of trades quickly
and profitably.
However, many investors and professional traders still manage to
end up in the red. These investors are unsuccessful because they let
emotions get in the way, are too stubborn to be successful, or they
think they know something other people don’t. They can literally have
their trading system screaming at them to get in or out of a trade, and
yet they ignore all the signs.
What these losers fail to realize is that the market is irrational
because it is driven by emotion and institutional houses throwing

Forex Mistakes (Media Influence Decisions)

Forex Mistakes (Media Influence Decisions)

The stock market is partially driven by emotion. Many investors would
say in the short-term the market is entirely driven by investor
psychology. People hear a stock tip about an upcoming earnings
report, and they race to get in before everyone else does. An
earnings report disappoints Wall Street and the stock drops 10% in
after-hours trading, which keeps investors up all night in a panic and
they immediately sell first thing in the morning.
While psychology ends up being the primary driver for decisions for
individual investors, the assets you buy should not be an emotional
decision. This is why it is imperative for investors to create a strategy
with specific rules that they can stick to.
However, the media loves to drive this emotion. There are television
stations dedicated to the up-to-the-minute movements in the market,
rumors and other current events. This coverage keeps viewers glued
to the television, which drives advertising revenue.

China's Economy: Recovery Gains Momentum

China's Economy: Recovery Gains Momentum

Investors and economists are arguing about whether the U.S. economy has any "green shoots" signaling a recovery from the financial crisis, but when it comes to China's economy, there's little debate: Upward revisions to gross domestic product growth projections just keep on coming.
The latest revision comes from Frank Gong, JPMorgan Chase's (JPM) chief China economist, who expects the country's economy to grow 7.8% this year, compared with his previous forecast of 7.2% a few months ago. "The economy is doing a lot better than the market expects," says Gong. "The risk is on the upside." His prognosis for next year is even rosier, with an expectation of 9% growth, compared with his earlier forecast of 8.5%. If the rest of the world pulls out of its slump next year, China could even be looking at double-digit growth again, he says.
Many other economists are sounding bullish about China, where GDP growth bottomed out in the first quarter at 6.1%. Last month the World Bank upped its estimate for Chinese economic growth in 2009 to 7.2%, having forecast in March only 6.5% growth. A few days later the Organization for Economic Cooperation & Development weighed in with a prediction of 7.7%, vs. an earlier figure of 6.3%. Credit Suisse (CS) is calling for 8% growth this year and 9% in 2010.
For the moment, China’s exports continue to contract, although at a slower rate. On July 10, Xinhua News Agency reported a 21.4% decline in exports during June from a year earlier, continuing an eight-month slump. However, exports grew 7.5% from May, and some believe things have turned a corner. JPMorgan’s Gong notes that the export component of China’s Purchasing Managers Index in May was above 50 for the first time in a year, signaling an expansion rather than a contraction in new export orders.
What's surprising and encouraging about the strength of China's recovery is that so much of it seems to be fueled by Chinese consumers. To be sure, the $586 billion economic stimulus package unveiled by the government last November has helped prime the pump, as has a nearly $1.3 trillion expansion in credit since the beginning of the year.

Trade and Payments

Trade and Payments

Trade and Payments

Pakistan’s exports were growing at 16 percent per annum on the back of strong macroeconomic policies pursued at home and the hospitable international trading environment the period (2002-03 to 2005-06). The impressive export performance backtracked to dismal in 2006-07 when they hardly managed to grow at less than 4 percent. Overall exports recorded a growth of 10.2 percent during the first ten months (July- April) of the current fiscal year against 3.6 percent in the same period of last year. In absolute terms, exports have increased from $13847.3 million to $15255.5 million in the period. Although exports growth has remained far short of the average growth of 16 percent achieved during 2002-03 to 2005-06, but it was satisfactory when viewed in the backdrop of poor show last year.Imports during the first ten months (July-April) of the current fiscal year (2007-08) grew by 28.3 percent compared with the same period of last year, reaching to $32.06 billion. After growing at an average rate of 29 percent per annum during 2003-04, Pakistan’s import growth slowed to a moderate level of 6.9 percent in the last fiscal year (2006-07). Import’s growth exhibited a sharp pick up in 2007-08 on the back of an extra-ordinary surge in the imports of petroleum products, food and raw material. Non-oil imports were up by 22.5 percent and non-oil and non food imports spiked by 18.8 percent during the first ten months (July- April) of the current fiscal year.Imports of the petroleum group registered extraordinary growth of 47 percent and reached to $8670 million. The petroleum group accounts for 27 percent of total imports but contributed 39 percent in the overall growth of imports for the year. The rise in imports of the petroleum group has been the fallout of extraordinary hike in crude oil prices in the international market, as well as the substantial increase in its quantity imported. The imports of raw material contributed almost 21 percent to this year’s rise in import bill. This is followed by imports of food group which contributed 16 percent to the overall imports growth. Imports of petroleum products and edible oil contributed 47 percent to the additional import bill in FY 08. Additional 18.7 percent contribution came from the import of wheat and fertilizer. These four items accounted for two-thirds of imports growth. Consumer durables contribution was negative (0.4 percent) mainly on account of decline in the import of road motor vehicles.Pakistan’s current account deficit (CAD) widened to US$11.6 billion during Jul-Apr FY08 against US$6.6 billion in the comparable period of last year, showing an increase of 75.7 percent. Even when compared to the size of the economy, CAD was substantially high at 6.8 percent of GDP during Jul-April FY08 as against 4.6 percent for the same period last year. The deterioration of the current account deficit was mainly driven by sharp rise in the trade deficit along with an increase in net outflows from services and income account. Services account deficit widened by 44.2 percent during Jul-April FY08 to reach $5.6 billion. This deterioration was contributed by relatively high import growth and the decline in export of services. However, the strong growth in current transfers on the back of impressive growth in remittances almost entirely offset the deficit in services and income account thereby leaving the trade deficit as the fundamental source of expansion in the current account deficit. The current transfers witnessed an impressive increase of 16.4 percent during Jul-April FY08 on the back of strong growth in both private and official transfers.The Pak rupee, after remaining stable for more than four years, lost significant value against the US dollar and depreciated by 6.4 percent during July-April 2008. The fall in the value of the rupee is mainly attributed to rising oil prices in the international market, widening of current account deficit and the uncertain political situation in the country.Worker’s remittances registered commendable growth during Jul-Apr FY08 by growing by 19.5 percent on top of 22.7 percent growth in the corresponding period of last year. Worker’s remittance totaled $5.3 billion in the first ten months of (Jul-April) of the fiscal year as against $4.4 billion in the same period last year. Pakistan’s total foreign exchange reserves stood at $12,344 million as on end-April 2008, significantly lower than the end-June 2007 level of $15,646 million. Reserves peaked to $16,443 million at end Oct 2007, while they showed significant depletion of $4.1 billion during Nov-Apr FY08. During Jul-Oct 2007, reserves improved by 5.1 percent due to the relatively lower current account deficit and substantial inflows in the financial account. However, October onwards, net outflows from portfolio investment, and a steep rise in the current account deficit led to a sharp decline in the foreign exchange reserves of the country.

Analysis - Why It Can Sometimes Be CompletelyI personally believe that every forex trader should at least have a basic understanding of fibonacci analysis and the key levels to watch out for, which in my view are the 50% and the 61.8% levels. By plotting these two levels you can form an idea of what kind of price targets you should aim for whenever you trade any price reversals.

Analysis - Why It Can Sometimes Be CompletelyI personally believe that every forex trader should at least have a basic understanding of fibonacci analysis and the key levels to watch out for, which in my view are the 50% and the 61.8% levels. By plotting these two levels you can form an idea of what kind of price targets you should aim for whenever you trade any price reversals.

For example if the price has moved 1000 pips (from the low point to the high point) and is reversing back downwards quite strongly then a 50% retracement, ie 500 points, would be a good place to exit your position.
However some traders like to wait for these retracement levels to be hit before entering a new position in the direction of the initial trend. Now this is where fibonacci analysis can be a little bit hit and miss.
While you will find plenty of instances where the price has bounced nicely off of the 50% or 61.8% retracement levels and resumed it's trend, unfortunately there are just as many instances where the price has ignored these levels and just gone straight through them.
To demonstrate this point you only have to look at the recent movement of the GBP/USD pair. As you can see from the chart below the pair moved from a low point of 1.6339 all the way up to 1.7044.
It then reversed back downwards but although both the 50% and 61.8% retracement levels were both taken out (and therefore would have been good exit points), the price failed to bounce back upwards from either of these levels, so those traders who were banking on a continuation trend from either of these levels will have been left disappointed because the price didn't respond to them at all.
So the point I want to make is that although fibonacci levels are good for determining possible exit points, they are often nowhere near as reliable when you are looking for entry points for continuation trends.

Where to Invest ( Forex Investment Analysis)

Where to Invest ( Forex Investment Analysis)

It is one thing to choose a dealer, and quite another to choose the correct dealer. Dealers’ service offerings can take many forms, and each dealer usually has one or two major features that they highlight above all others. When analyzing dealers, first understand and rank all of their service offerings, then apply those findings to your trading style to arrive at your optimal dealer.

The Who’s Who of Forex

Each perspective carries a different attitude, goal, investment horizon, and market impact.

They key difference among these market participants is their level of sophistication, where the elements of sophistication include:
�� Money management techniques
�� Profit objectives
�� Level of computerization
�� Quantitative abilities
�� Research abilities
�� Level of discipline

Of course there are sophisticated and non-sophisticated banks, governments, corporations, investment funds, and traders. But among these segments it is the individual trader who has the least amount of external governance. Whereas governments, banks, corporations, and investment funds adhere to regulations and restrictions (to a certain extent), traders are only restricted by their level of capital.
In the absence of these external restrictions, traders fall into two groups: those who can impose internal restrictions – discipline - on their trading strategies and those who cannot: the fence-swingers, et al.
Those who can impose this discipline we will call the sophisticated investor. In the zero-sum game of forex trading, the sophisticated investor uses tools and strategies that emulate those of the highly sophisticated institutional participants to extract profits from the novice participant. It is only the sophisticated investor who has the ability to extract positive returns from the forex markets.