Forex

Trading Tips

2008-04-01T21:09:00.000-07:00

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.
Any attempt to trade without analysis and studying the market is equal to a game. Game is fun except when you are losing real money...

Tip 2. Never invest money into a real Forex account until you practice on a Forex Demo account!
Allow at least 2 month for demo trading. Consider this: 90% of beginners fail to succeed in the real money market only because of lack of knowledge, practice and discipline. Those remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for years before entering the real market.
A good demo account to start practicing with could be, for example, FXGame from Oanda.

Tip 3. Go with the trend!
Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals.

Tip 4. Always take a look at the time frame bigger than the one you've chosen to trade in.
It gives the bigger picture of market price movements and so helps to clearly define the trend. For example, when trading in 15 minute time frame, take a look at 1 hour chart; trading hourly would require obtaining a picture of daily, weekly price movements.

If a trend is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Always make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying big trends, what's happening in the market here and now (during 5-10 minute time frame) should be of only importance to a Forex scalper.

Tip 5. Never risk more than 2-3% of the total trading account.
One important difference between a successful and an unsuccessful trader is that the first is able to survive under unfavorable conditions on the market, while an unsuccessful trader will blow up his account after 5-10 unprofitable trades in the row.

Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in money management approach. To introduce you to money management, let's get one fact: losing 50% of total account requires making 100% return from the rest of money just to restore the original balance.

Tip 6. Put emotions down. Trade calm.
Don't try to revenge after losing the trade. Don't be greedy by adding lots of positions when winning.
Overreaction blocks clear thinking and as a result will cost you money. Overtrading can shake your money management and dramatically increase trading risks.

Tip 7. Choose the time frame that is right for you.
Choosing wise means that you are comfortable and have time enough to analyze the market, place and close orders etc. Some people can't wait for hours for the price to make a move, they like action and therefore prefer smaller time frames. On the contrary, for others 10-15 minutes is a hustle to be able to make the right decision.

Tip 8. Not trading or standing aside is a position.
When in doubt — stay out. If it is not clear where the market will move — don't trade. In this case saving present capital is and absolutely better choice than risking and losing money.

Tip 9. Learn to use protective stops. Respect them and don't move.
Hoping that market will turn in your direction is a very delusive hope. By moving a stop loss further a trader increases his chances to end up with much bigger loss.

When holding to a losing trade too long, and even if funds permit, traders as a rule are very reluctant to accept big losses, thus often continue "hoping for best". In the mean time invested money is stuck in the open trade for unknown period of time (weeks and even months) and cannot be used for opening new positions. Not working money — dead money. Also this will result in constant interest payments for holding open positions.

Tip 10. "Keep it simple, stupid" — applies to indicators, signals and trading strategies.
Too much information will create a controversial picture of where to trade and when not to. To avoid lots of confusion create a simple but working method of trading Forex.

Tip 11. Think about risk/reward ratio before entering each trade.
How much money can you lose in this trade? How much can you gain? Now, make a decision if the trade is worth entering.
Example: if trader is looking for possible 35 pips gain and possible 25 pips of loss, such conditions are not worth trading. Compare it with the situation when a trader has 100-120 pips of potential gain and only 10-20 pips of possible loss. This is the trade to open!

Tip 12. Never add positions to a losing trade. Do add positions when the trade has proven to be profitable.
Don't allow a couple of losing trades in a row become a snowball of losing trades. When it is obviously not a good day, turn the monitor off. Often not trading for one day can help to break a chain of consecutive losses. Trying to get revenge can often make things worse.

Tip 13. Let your profits run.
Let your position be open for as long as the market wishes to reward you. Of course, for this traders need a good exit strategy, otherwise they risk to give all profits back...
Running two or more open trades gives an option to close some positions earlier and keep others running for higher profits.

Tip 14. Cut your losses short.
It's better to finish unprofitable trade quickly than wait for the situation to get worse. Don't put a stop loss too far — it's your money you risk. Better calculate the best spot to enter when a potential loss would be minimized. Again: respect your stop and don't move it "cherishing hopes".

Tip 15. Trade currency pairs in respect to their active market hours.
Learn about overlapping market hours: when two markets are open and highest volume of trades is conducted.
For example, Australian and Japanese trading sessions are overlapped from 8pm to 1 am EST. At that time trader can successfully trade AUD/JPY currency pair.

Tip 16. Choose the right day to trade.
This recomendation is often wrongly taken as an optional thing, because everyone knows that Forex market is open 24 hours a day 7 days a week. Yet, choosing the time to trade can make a difference between successful and hopeless trading.

It's proved and highly recommended not to trade on Mondays, when the market has recently awaken and is making first "probation steps" to form a new or confirm a current trend; and on Fridays afternoon, during the huge volume of closing trades. The best days to trade are Tuesdays, Wednesdays and Thursdays.

Tip 17. Learn about Fibonacci levels and how to use them for trading.
Fibonacci can be very helpful in trading, even partially using the study, for example, to determine the best exit, can bring traders to a new edge of trading.

Tip 18. Always ensure that a signaling bar/candle on the chart is fully formed and closed before you enter a trade.
A golden rule of trading: "Always trade what you see, not what you would like to see" is the best explanation here.

Tip 19. If you ask for someone else's advice as about how and when to trade
in other words, choose to rely on live trading signals from other traders, make sure you do it for your benefit, not for disaster. If you use such signals to discover how other traders do analysis and study on the price — you are on the right track and soon you'll be able to do analysis yourself.
But if you're just blindly following recommendations and your only task is to push the correct button... think again.

Tip 20. Using a highly leveraged account comes at a cost.
It will, of course, give a trader more financial gear to trade, and also trader's broker will be happy as it will mean higher spread income for him. On the other side a trader signs up for additional risks that multiply with higher leverage in a "friendly tight" proportion.

Tip 21. Learn to measure trading success by the end of the day, week and then month and year.
Do not judge about your trading success on a single trade. To be successful traders don't need to win every trade, they also don't become rich in one trade — they need to be profitable in a long run.

Tip 22. There is no such thing as a secret approach to understanding the market.
Take the time to develop a solid trading system and find out that the secret to trading success lies in hard work and constant learning.

Will Americans get stuck with the $30 billion credit bailout tab?

2008-03-27T02:31:00.000-07:00

by Ryan Teeples

Have you ever felt a charitable desire to help a poor soul who is losing his Maserati? Have you ever welled up inside with compassion for an industry which just had an unfortunate run of bad luck and made too many bad business decisions?

No? Well you have no soul then. And if a Fed Historian is right, you will be forced to "donate" your hard earned dollars to help these needy banks.

"Officials are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. "With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it,'' he said in an article on Bloomberg this morning. (http://www.bloomberg.com/apps/news?p...2GQ&refer=home )

He, and many other economists are not optimistic that the government will be able to recover its $30 billion "investment" in the banking industry bailout, and that money will basically come out of the taxpayer pool.

Granted, the economy will benefit, but I'm of the school that the market needs to correct sometimes, and a little recession now and then is a good thing.

I'm interested to know what the rest of you think about this. It's certainly more a social and political issue the way I've presented it. But it leaves underlying questions crucial for forex traders to understand, as they may dramtically impact the US ecomony.

Will this bailout strategy work?

Will a failure of the plan cause consumer and investor sentiment to spiral further?

Will Batman and Robin be able to escape the grasp of the Joker and his men?

Looking forward to hearing your thoughts.

By the way, as equities remain uncertain, we are watching the USD/JPY S&R levels very closely. Check out what we have: http://www.pfxglobal.com/usd-jpy/usd...ard.html#step3.

We do this kind of analysis with video explanation for all major pairs at www.pfxglobal.com

Has Dollar Turned The Corner?

2008-03-25T03:51:00.000-07:00

After relentless selling for the past month which culminated in a spike top of 1.5900 at the start of trade this week, the EURUSD dollar finally turned the corner dropping below 1.5500 by Good Friday. As we wrote in our daily, “The market appears at a standstill as EURUSD consolidates its gain in the 1.5300-1.5500 area and traders wait for the next theme to develop. The collapse of Bear Stearns has left the market wary, but with no additional news of serious trouble in the US financial system, dollar shorts have run out of fresh reasons to sell the greenback. Meanwhile evidence of a potential slowdown in EZ economy is starting to mount, raising concerns that ECB may have to shift its hawkish posture relatively soon”.

Has Dollar Turned The Corner?

After relentless selling for the past month which culminated in a spike top of 1.5900 at the start of trade this week, the EURUSD dollar finally turned the corner dropping below 1.5500 by Good Friday. As we wrote in our daily, “The market appears at a standstill as EURUSD consolidates its gain in the 1.5300-1.5500 area and traders wait for the next theme to develop. The collapse of Bear Stearns has left the market wary, but with no additional news of serious trouble in the US financial system, dollar shorts have run out of fresh reasons to sell the greenback. Meanwhile evidence of a potential slowdown in EZ economy is starting to mount, raising concerns that ECB may have to shift its hawkish posture relatively soon”.

Next week the calendar hardly looks friendly to the dollar as nearly every event from Existing Home Sales to U of M Confidence survey are expected to print lower that the prior month. However, after so much bad news, the greenback may benefit from diminishing expectations staging a rally simply if the data does not show any further deterioration. In any case the market appears to be trading less on economic news and more on risk version concerns. If currency traders see some stabilization in US financial sector some flows may return to the buck, on pure short covering dynamics alone. Therefore, while the rally in the dollar may continue, for the time being it is still nothing more than a correction in ongoing bear market. -BS

Visit our recently updated EUR/USD Currency Room for more resources dedicated to the US Dollar.

Daily Report: EUR/USD Rebounds, Correction Completed?

2008-03-25T03:50:00.000-07:00

Daily Report: EUR/USD Rebounds, Correction Completed?

Markets focus turns back to strength in Euro and weakness in dollar as traders are finally back from vacations. Overall direction is not clear at this moment as different contradicting forces are driving the forex markets. On the one hand, commodity markets remains generally weak, with oil dropping close to $100/bl level and gold hovering near to recent low. On the other hand, carry trade unwinding cools on strong rebound in Asian stock markets. Nevertheless, the more noticeable movements are the broad based weakness in dollar and broad based strength in euro which is also reflected with EUR/USD topping the top movers chart of today so far.

Technically speaking, dollar's rebound is still retreated as a correction only, as least against Euro, yen and Swissy. Meanwhile, Euro's retreat against dollar as well as against Sterling is also treated as correction. These pairs remain the better bet on next round of dollar weakness.

Looking ahead, with an empty economic calendar in European session, focus is on Canadian retail sales, US consumer confidence in the US session. Retail sales in Canada is expected to rise 0.9% mom in Jan, up from 0.6% in Dec. Ex-auto sales is expected to rebound by rising 0.5% mom, up from -0.4% fall. Conference Board Consumer Confidence in US is expected to drop from 75 to 74 in Mar.

Morgan Stanley 1Q Profit Tops Estimates

2008-03-20T01:13:00.000-07:00

Better-Than-Expected Morgan Stanley Results Help Reassure Investors Amid Credit Crisis

NEW YORK (AP) -- Morgan Stanley posted better-than-expected quarterly earnings on Wednesday, joining those from two of its rivals and indicating that Wall Street may be getting a better grip on the credit crisis.

The nation's second-largest investment bank was able to parlay aggressive stock and bond trading into offsetting more losses linked to subprime mortgages. Morgan Stanley -- like Lehman Brothers and Goldman Sachs on Tuesday -- was also able to top Wall Street's reduced expectations by a wide margin.

Morgan Stanley's results came during a tumultuous week. Just a few days earlier, rival Bear Stearns Cos. sold itself at a fire-sale $2 per share price to JPMorgan Chase & Co. in order to avoid declaring bankruptcy. That sent a shockwave through Wall Street as investors wondered if other investment banks might be in the same predicament.

But the strong results from Morgan Stanley, Goldman and Lehman helped assuage fears of a wider meltdown in the financial system -- at least for now.

"Fact is, like it or not, this is an inherently risky business where the returns will shift to those willing to take the most leverage," said Jack Ablin, chief investment officer of Harris Private Bank. "Expectations had us in a tailspin."

The earnings results not only helped shares of the investment banks recover from the lows they hit Monday in the aftermath of Bear's sale, but also backed claims by the companies' chief executives that they could take advantage of the market's dislocation.

John Mack, Morgan Stanley's CEO, said the investment house known for its trading prowess "effectively capitalized on market opportunities and aggressively managed our positions." The company had about $2.3 billion worth of write-downs linked to the credit and housing market crisis, but one of its best trading performances in history.

Morgan Stanley wrote down about $9.4 billion during last year's second half. Global banks and brokerages have so far claimed about $200 billion worth of write-downs since last year.

"While many of our businesses are facing challenging market conditions that we expect to continue in the months ahead, we are satisfied with how Morgan Stanley navigated the ongoing market turbulence," Mack said in a statement.

The company said it earned $1.53 billion after preferred dividends, or $1.45 per share, down 42 percent from $2.66 billion, or $2.17 per share, a year earlier. Revenue fell 17 percent to $8.3 billion from $10 billion a year earlier.

But the lower results easily topped analysts' expectations for a profit of $1.03 per share on $7.19 billion of revenue, according to Thomson Financial.

Its shares closed up 59 cents at $43.45, following a 17 percent gain in Tuesday's market rally.

Morgan Stanley's institutional securities business -- which includes investment banking and trading -- posted $6.2 billion of revenue. The results marked the division's third-best quarter ever.

Meanwhile, volatility in the bond market pushed fixed-income sales and trading revenue to their second-best showing with $2.9 billion of revenue.

Though offset by mortgage write-downs, Morgan Stanley relied on robust commodities and currency markets to drive results.

"We believe (Goldman and Morgan Stanley) have shown their ability to trade challenging markets this quarter," said Roger Freeman, an analyst with Lehman Brothers. "There is hope that the Federal Reserve's aggressiveness will begin to unclog the fixed-income markets. ... This could push the group still higher over the next few sessions."

Goldman Sachs, Lehman and Morgan Stanley said they began to test a new program this week that allows them to borrow directly from the central bank to help improve the financial market's liquidity. On Sunday the Fed gave investment banks permission to borrow from its discount window, which had previously been restricted to commercial banks.

The Fed also cut the rate at which financial institutions borrow at its "discount window" to 2.5 percent from 3.5 percent in two separate actions this week.

Though all seemed to be positive steps for Wall Street, that doesn't mean the concerns about the rest of the year have been alleviated.

The fiscal first-quarter for the three banks ended Feb. 29, before most of the market turbulence that rocked Bear Stearns last week. Investors are also still waiting for Merrill Lynch & Co. to finish its first quarter at the end of the month.

And then there's the biggest worry on investors' minds.

"We remain concerned with the deteriorating economy and its impact on the results at these firms, despite (the Fed's) aid with near-term funding," said Standard & Poor's equity analyst Matthew Albrecht.

Visa Stock Soars in Market Debut

2008-03-20T01:07:00.000-07:00

Shares in Visa Inc. Soar 28 Percent in Stock Market Debut, the Biggest IPO in US History

SAN FRANCISCO (AP) -- Catapulted by the biggest IPO in U.S. history, Visa Inc. shares soared 28 percent in their stock market debut Wednesday as investors bet an accelerating shift to electronic payments will enrich the world's largest processor of credit and debit cards.

After being priced above expectations at $44 per share in an initial public offering that raised nearly $18 billion, Visa shares finished at $56.50 on the New York Stock Exchange Wednesday. The run-up gives the San Francisco-based company a market value of about $45 billion.

"This is an exciting and historic day for Visa," said Chairman Joseph Saunders, who received a $10.2 million bonus last year for laying the IPO groundwork.

Investors believe Visa is in a lucrative position as more people rely on its electronic network to make payments instead of using cash and checks. The company is expected to milk the phenomenon to become an even bigger cash cow than it already is.

Visa generated $5.2 billion in annual revenue last year as it handled more than more than 44 billion transactions totaling more than $3.2 trillion. The volume puts Visa far ahead of its main rival MasterCard Inc., whose own shares have more than quintupled from their May 2006 IPO price of $39.

Making Visa even more alluring to investors, the company is well-insulated from the credit problems that have scarred many of the lenders that issue the cards bearing its brand.

Unlike those lenders, Visa doesn't carry any consumer debt on its books. It depends on transaction fees, which have been steadily rising for years, including the past two U.S. recessions in 1991 and 2001.

Since the last recession, Visa has enticed consumers to use its credit and debit cards more frequently to pay for staples like groceries, gas and even utility bills. Visa estimates about 42 percent of its transactions fall into this "nondiscretionary" category, up from 27 percent in 2000.

"Visa enjoys one of the widest economic moats that a company can desire," Morningstar analyst Michael Kon wrote in a Wednesday research note.

Reflecting management's confidence, Visa anticipates annual earnings growth of at least 20 percent for at least the next two years. The company got off to a fast start in its fiscal first quarter ending in December with a $424 million profit, up 70 percent from the previous year.

Visa overcame turbulent market conditions to shatter the previous U.S. record IPO of $10.6 billion raised by AT&T Wireless eight years ago.

"To sell 400 million shares at a time like this is Herculean," said David Menlow, president of IPOfinancial.com

Investment bankers could still exercise an option to buy another 40.6 million Visa shares during the next 30 days. If that happens, Visa's IPO will end up raising $19.7 billion before expenses.

Visa has earmarked nearly $12 billion of the IPO proceeds to buy back shares from the banks that helped build up its network over the past 50 years. The biggest chunk, about $1.36 billion, will be paid to its largest customer and shareholder, JPMorgan Chase & Co., according to an updated breakdown filed late Wednesday.

Other major banks cashing in on Visa's IPO include: Bank of America Corp., National City Corp., Citigroup Inc., U.S. Bancorp and Wells Fargo & Co.

The windfall comes a propitious time, given the banking industry's wobbly condition as billions of losses pile up from the housing market's worst downturn since the 1930s.

Another $3 billion from the IPO is being deposited into an escrow account to cover potential liabilities in lawsuits alleging Visa conspired to stifle competition and fix prices.

Those legal problems represent one of the biggest risks to owning Visa stock, although the company's management maintains the escrow account and contingency measures should adequately protect investors. Visa paid more than $2 billion late last year to resolve a suit with American Express Co., but a similar case brought by Discover Financial Services LLC is scheduled for a Sept. 9 trial in New York.

Visa's dependence on only a handful of banks that issue most of its cards poses another possible downside, said Aite Group analyst Gwenn Bezard. The company's five largest customers accounted for $1.2 billion, or 23 percent, of its revenue last year.

Big card issuers like JPMorgan already get special discounts and the pricing pressure on Visa could intensify if more industry mergers further decrease the number of banks using its processing network, Bezard said. That might crimp Visa's profits.

For now, Visa is planning to trim about $300 million in expenses during the next two years to boost its operating profit margin from 37 percent.

Menlow and other analysts don't view Visa's blockbuster IPO as a sign that jittery investors have suddenly become more interested in taking chances on companies going public for the first time.

"This is more like an oasis in the desert," Menlow said.

The arid conditions have produced just 22 IPOs far this year, down from 47 at the same juncture in 2007.

New High-Yield Accounts Come With Plenty of Restrictions

2008-03-20T00:39:00.000-07:00

With the Federal Reserve cutting rates six times since September, the days of tidily earning 5% on your cash appear to be a thing of the past. Since last June, yields on online savings accounts at HSBC and Emigrant Direct have dropped from just over 5% (among the highest yields at the time) to 3.55% and 3.3%, respectively. The returns on high-yield savings and money-market accounts are even more meager — averaging just 2.64%, according to Bankrate.com.

But there's a small segment of the banking world that is bucking this low-yield trend. Some little-known community banks and credit unions are offering accounts that carry yields as high as 6.26%. Better yet, these so-called reward checking accounts (they're also referred to as maximum earnings accounts) have no monthly fees, and deposits are insured by the FDIC or its credit union counterpart, the NCUA. In order to earn these higher annual returns, however, account holders must meet certain criteria each month, such as paying bills and banking online, using direct deposit and making a set number of debit card transactions.

These banks aren't just being generous — reward checking and maximum earning accounts are one way that the smaller banks are trying to weather the current economic downturn, explains Aaron McPherson, a practice director at Financial Insights, a financial services market researcher. Not only does the bank attract new deposits at a time when many consumers are draining their accounts to settle debts, but it also profits from the monthly requirements it imposes on these accounts. Each debit transaction generates merchant interchange fees, for example, while a paperless account reduces costs.

"[The banks] may not in fact be making much money, but they feel they have to offer these accounts to hang onto consumers," says McPherson. "This is a loss leader to sell you on other products and a long-term relationship with the bank."

Although the high rates are tempting, questions remain about the value of such accounts for consumers."A checking account is like a spouse: You need real compatibility," says Greg McBride, senior financial analyst with Bankrate.com. Some consumers will find it easier to work within the confines of such accounts than others. Adds Rob Shevlin, a senior analyst with market researcher Aite Group: "There are just so many rules, requirements and restrictions."

Here's what you need to consider before abandoning your current account for a reward checking or maximum earning account:

Large yields won't last forever
"Rates are not going to stay at 6%," warns Jim Bruene, publisher of Online Banking Report. Most banks began marketing these accounts before the Fed took an ax to the federal funds rate. As reward checking accounts become more popular, odds are good that these smaller banks will have to lower their yields to retain a profit. At the same time, big bank chains are already muscling in on the market. Washington Mutual, for example, is testing a "Savings for Success" account in Georgia, Illinois and Texas that earns 6.5% when consumers make monthly deposits from a linked WaMu checking account.

You'll need to keep score
Fail to meet just one of the many conditions of your account, and you'll earn a significantly lower rate on your balance for that month. At Arkansas-based Heartland Community Bank, the rate of 6.01% drops to 0.30% if you don't make at least 10 debit transactions and one automatic deposit or online bill payment, among other conditions. "That may not be a fun game for you to play," says Bruene. "Is that something you want to be thinking about each month, making sure you make a dozen debit transactions to get a few extra bucks in interest?"

Only locals need apply
Because most banks limit access to reward checking options to in-state residents, where you live will determine just how good of a rate you can get. For a list of the highest-yield accounts, visit Money-rates.com.

Fees may eclipse extra interest
A major disadvantage to banking with an independent bank is that they have fewer ATMs. "If you're an ATM junkie and you don't plan your cash needs, you could find yourself losing that extra interest — and then some — in ATM fees," says Linda Sherry, a spokeswoman for Consumer Action. Look for rewards checking that offers reimbursement of these fees. Colorado-based New Frontier Bank, for example, refunds all ATM fees customers pay to other banks.
Copyrighted, SmartMoney.com. All Rights Reserved.

A Bear Market for 401(k) Plans

2008-03-20T00:35:00.000-07:00

There are a lot of things wrong with JPMorgan Chase's (NYSE: JPM - News) $2-per-share bid for Bear Stearns (NYSE: BSC - News), including increased government intervention in the marketplace, an increase in the moral hazard by the Fed assuming the riskiest assets, and the potential liability taxpayers face from allowing JPMorgan to virtually steal the choicest cuts of Bear's hide.

Yet while pundits will be questioning the rationale behind the maneuver for years to come, investors need to take away one important lesson from this debacle: Don't invest too much of your retirement nest egg into your company's stock.

We've heard that British billionaire Joseph Lewis has lost about $1 billion on Bear's implosion, and Chairman James Cayne, who owns around 5% of his company's shares, has lost about $400 million. But it's tough to feel too sorry for them. It's easy to imagine they'll land on their feet just fine after the smoke clears.

Pity instead the rank-and-file employees of Bear Stearns, who collectively own about a third of the company's stock. They've just witnessed the loss of their life savings. Dreams of homeownership, college for their kids, and early retirement have all flown out the window.

Rooting for the home team

Unfortunately, it's not a new phenomenon. After Enron collapsed in late 2000, a study looked at concentrations of employer stock within retirement plans. According to the study, nearly a full year after Enron, many company plans still had the vast majority of assets invested in employer stock. For instance, Procter & Gamble (NYSE: PG - News) employees had 94% of plan assets invested in P&G stock. Pfizer (NYSE: PFE - News) came in at more than 85%, while both Anheuser-Busch (NYSE: BUD - News) and Coca-Cola (NYSE: KO - News) were above 81%. In comparison, Enron's level was just 62% when its stock crashed.

Of course, there are no hard-and-fast rules for how much to put into your employer's shares, but if you limit your contribution to at most 10% of your total retirement funds, you're giving yourself enough exposure to benefit from any appreciation your company might enjoy while protecting your downside should it be your turn for the bear to eat you.

Striking out the side

When a stock is rising, it's easy to get caught up and think you should be putting more into it. It was only a year ago that Bear Stearns shares were trading at $150 a stub -- and just earlier this month that they were near $80.

Here are some alarming statistics from FINRA:

* One-third of employees eligible to invest in company stock through their 401(k) have more than 20% in their company's stock.
* Almost 9% of them have more than 80% invested in their employer.
* For employees in their 60s, almost 20% hold half of their 401(k) savings in company stock.

How is it, though, that so many employees have such large stakes in their companies? For many workers, their 401(k) plan will be their biggest investment vehicle -- and since it's run through the company, investing in shares becomes easy. According to a study by Hewitt Associates, 23% of companies offering matching contributions do so in company stock. A 2006 study by the National Center for Employee Ownership found that 25 million Americans own employer stock through ESOPs, options, stock purchase plans, 401(k) plans, and other plans -- while 10.6 million hold stock options (often in addition to outright shares).

Foolish final thoughts

Protect yourself from becoming one of those employees who risk losing their life savings because they have too much tied up in their company's stock. You already count on your job to provide you with a paycheck to pay living expenses. Don't put your whole financial future in your employer's hands as well.

Pfizer, Coke, and Anheuser-Busch are recommendations of Motley Fool Inside Value. Pfizer and JPMorgan Chase are Income Investor selections.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.
Copyrighted, The Motley Fool. All rights reserved.

Shanghai Index Down More Than 6 Percent

2008-03-20T00:14:00.000-07:00

China's Main Stock Index Down More Than 6 Percent; Hang Seng, Kospi Also Lower in Early Trade

HONG KONG (AP) -- Asian stock indexes fell in early trading Thursday as investors took a cue from overnight losses on Wall Street.

China's benchmark Shanghai Composite Index was down 6.5 percent to 3,516.33 amid mounting worries over the likely impact of a U.S. recession on China's own booming economy.

Hong Kong's blue chip Hang Seng index fell 4.4 percent to 20,896.14 after the market opened Thursday.

Elsewhere in Asia, South Korea's Kospi Composite Index fell about 1.6 percent. Japanese markets are closed for the Vernal Equinox holiday.

The Asian markets tracked weakness on Wall Street, where the Dow Jones industrial average fell 2.4 percent to 12,099.66 Wednesday.

Base Technique Analysis of Elementary *part I

2008-02-27T04:44:00.000-08:00

News…News…..News…your require news

of basal analysis is information. Information which quickly, many and from trustworthy sources. Where information which you can use to analyse to movement of currency, that is coming from :

1.Instansi a[n state. You need policy soybean cake – policy of government in this time to issue – Economics issue, growth of Politics, Social and it is of course issue – Security issue.

2. Media Print, E – Media, and Television. You feel in era in this time, very easy to get news. My suggestion to get to news quickly is by follow some milis which studying concerning economicses of United States state as well as bevy milis all trader in indonesia * Register your enamel lah with local media a[n state, especially United States state, Europe and English, and it is of course register also your enamel to situs – Forex situs to get to news which later will be sent [by] lansung to your mail Ad for lah wake up morning, see television event lah loading concerning news – economic news and issue – important issue from an state * And still many possible other ways is you can find later along with time. Of so much many informations which you accept every day him, you will be able to find a or pattern of tren which now again in cermati from a[n state. Of pattern – news or pattern which you accept you can do analysis basally to know to movement of currency. Ambilah a example [of], when in july 2006 government of israel attack libanon. Is so that pursued by him of pasokan crude oil to whole world and this matter cause the price of raw him of world go up until will come near USD 80 per barrel. Increase of price of this him, causing the going up of exchange rate to dollar.

3. Analysis a expert or consultant. Though you is a expert is you also there is obliged to to listen expertly – ad for other economics when conversing, though that oppose against your patterned thinking even if. Use lah idea of them as your consideration in analysing a[n movement of currency, it is of course for the purpose of patterned thinking from all expert do not influence your own patterned thinkings as determinant of decision.

EUR/USD, 20 days later: Breakout or bounce?

2008-02-27T04:24:00.000-08:00

A couple weeks ago, Wade posted an article about the EUR/USD, and asked you to speculate whether the chart showed a triple top, or an ascending triangle. (http://www.pfxglobal.com/index.php?o...091&Itemid=188)

The results were mixed, as you might imagine, but the bias was toward a triple top, 11-7 by count in the post at this forum. The best prediction was SeekingLight, who said: "I suspect a fourth touch and retrace then breakthrough/new high, exhaustion, gasp, descent."

Like Wade and SL said, there was the touch and retrace, and now we are left to consider more closely a breakthrough and a new high (a descent after the high is another story for now :)

Fast-forward to today, and we see a Pair at a Crossroads. Right now, it looks a lot more like an ascending triangle. A fibonacci retracement study tells us we're in for a bounce off resistance for the short term, but the bias is, in my opinion, still very much long.

Let's talk about the charts below. I'm planning for a short term bounce off resistance at 1.490 at the 0% fib line, followed by a quick bounce off support to complete that ascending triangle, followed by a break out of the pattern to the long, up to 1.500.

Don't be surprised though to see the breakout come without one more bounce off of resistance. That's why, as a new trader, I keep my positions long-term and avoid trying to trade those short moves. I may miss some of the quick profits, but I also avoid the hard losses.

Whether you agree or not, the next few days are going to be key for the EUR/USD, as that channel is getting ever tighter.

Check out more of our videos, education and analysis at www.PFXglobal.com. It's all 100% free!

London Gold restruktur of price champion

2008-02-27T04:23:00.000-08:00

LONDON: Price Gold in London yesterday went up came near highest champion, in the middle of speculation will weaken ACE dollar exchange rate him. This Condition is estimated push investor buy up that commodity alternatively invesment besides obligation and share. Gold price have mounted till 14% in this year and at last week have time to reach champion on course US$953,91 per ounce, when ACE dollar touch weak by level of him in three week to euro. All organizers of global aggresive fund have boosted up long-range position of them at contract expect in stock of New York. " In this time have been formed by new tren and all that ideas cause investor await tired gold price of US$1.000 level per ounce" word of Frederic Panizzutti, Senior of Vice of President MKS Finance, one from four processor of biggest gold of Swiss, like cited by Bloomberg.Dolar AS kemarin kembali menjadi patokan utama terhadap pergerakan harga sejumlah komoditas global.

Contract value expect gold for delivery immediately yesterday mounted US$6,96 or 0,7% becoming US$952,16 per ounce in commerce of time morning session of London. Price Gold for the delivery of April in division of Comex New York Mercantile Exchange go up US$3,20 become US$951 per ounce. Gold Pasokan have gone down equal to 79 ton in the last year. In this year lacking of that gold pasokan is projected go up to become 100 ton effect of degradation of production of African South and deceleration of sale a number of global central banks. Opportunity penetrate Related to opportunity of penetration of gold price in US$1.000 level per ounce during near by, according to analyst assessed big enough, along with crude oil increase of price potency to position of US$105 per barel. This condition [of] diprediksi trigger investor to continue to to hunt gold as covert instrument [of] value of impact of inflasi.(Bisnis, 23 February) this Pressure Inflation, have also triggered a number of central banks specially The Fed continue to clip rate of interest him. All investors of memprediksi at March will happened again degradation of rate of interest become 2,5%. By Adhitya Noviardi Business Indonesia All organizers of global aggresive fund have boosted up long-range position of them at contract expect in stock of New York. " In this time have been formed by new tren and all that ideas cause investor await tired gold price of US$1.000 level per ounce" word of Frederic Panizzutti, Senior of Vice of President MKS Finance, one from four processor of biggest gold of Swiss, like cited by Bloomberg.

FLUCTUATION Reinforcement of platinum price desisted by TOKYO: Reinforcement of platinum price which continue happened in last one months desisted by in Tokyo, after have time to touch highest champion at commerce of day before all. In commerce of month;moon before all, all merchants have time to pocket up advantage till 29%. Kazuhiko Saito, strategic expert of commodity of Interes Capital Management, telling all merchants have sold the him of because triggered will fall due contract him expect platinum [in] Tokyo Commodity Exchange during near by. Platinum price for the delivery of December 2008 [in] Tokyo yesterday went down 55 yen or 0,8% becoming 7.125 yen per gram (US$2.066 per ounce). ( Bloomberg)

LME launch contract expect steel of LONDON: biggest Stock Metal of world, Metal London of Exchange ( LME), yesterday launched contract transaction expect steel. That thing is done as product development form, along with tired steel price gambol 30% in last three months. Berencana LME focussed transaction plate of steel coming from Malaysia, South Korea, Turki, and Uni Emirate Arab, nations commercializing steel this type of till reach 160 million ton per his year. Two contract expect new steel will use delivery of Mid-East and Far East, passing electronic transaction and telephone. that Commodity transaction will use commerce floor just started [at] 28 April 2008. " In this time is right time to launch contract expect steel. Plate become militant still booming in some times forwards and pasokan in global markets also show tren decrease," Jim word of Lennon, analyst of Macquarie Group Ltd, London. Price Platinum for the delivery of December 2008 [in] Tokyo yesterday went down 55 yen or 0,8% becoming 7.125 yen per gram (US$2.066 per ounce). ( Bloomberg )

Lennon add steel contract transaction success to be able to, LME have to sign up this become more likuid and get support of producer, consumer and merchant. Nicola Davidson, mouthpiece of Arcelormittal, pemasok 10% world steel, telling his side pessimistic of contract transaction become militant in LME will give benefit for industrial and monetary institution of steel on a long term. Wall Street Journal express contract transaction expect steel in LME will give benefit for producer, pemasok, and consumer to become covert medium of value to metal price gambol which cannot diprediksi. That media also write down this commodity contract enable consumer lock or accomodate the advantage and expense of easierly, even increase of price influenced by the level of supplies amount or annual price negotiation between company of mine and company of processing. ( bes)

LOSING ON CALL LOANS

2008-02-25T11:42:00.000-08:00

New York Banks Hold Too Much Public Money. HIGH INTEREST ON DEPOSITS How Trust Companies Can Pay 3 Per Cent a Mystery -- Stagnation in Stocks One Reason for Low Interest Rates -- Clever Trick by Foreign Exchange Banker -- Consolidated Tobacco 4s.

The Washington Post (1877-1954) - Washington, D.C.
Author : Special to The Washington Post. ROBERT N. BURNETT
Date : Mar 13, 1904
Start Page : A11
Pages : 1
Text Word Count: 1713

New York, March 12. -- It is a very curious situation when some of the big banks -- perhaps many of them -- would like Secretary Shaw to withdraw $20,000,000 or $30,000,000 more of public funds, in addition to the $30,000,000 which he has already called for in connection with the Panama Canal payment.

See more articles from Futures (Cedar Falls, Iowa)

2008-02-25T11:33:00.000-08:00

Forex trading has found its way onto the screens of many traders looking for alternatives to interest rate and stock indexes, but like any market, trading forex requires research, reliable quotes and education. Many forex platforms offer multiple services including trading education.

One such platform, www.finifx.com, was launched in mid 2005 after five years of preparation, offering multiple resources for new and experienced forex traders.

The Fini Fx Pro trading platform is an Internet-based currency trading system for self directed and managed forex trading. The platform provides traders, trading advisers, pool operators and brokers with the tools for account

A Little History of Forex

2008-02-25T11:32:00.000-08:00

orex allow its visitors to learn at their own time and pace every details and information concerning the art of forex trading and day trading. http://www.10forex.com is an easy to navigate web site featuring useful link. Information as forex market history, forex forecasting and news can be found quickly and easily.
Forex traders often ask for free markets overview and market snapshot. http://www.10forex.com supply real time information allowing traders to stay updated with the current status of their financial investments. This information is not limited to a single market but includes a summary of European markets and Latin markets among other. 10 forex also provide many useful charts displaying current and past movement in currency's rates.

The most beneficial tool http://www.10forex.com presents is the comprehensive glossary. Since forex trading often result a major losses it is important that those who want to trade would be able to understand every basic concept. Whether it's a pip or a point, or a zero coupon bond, It's all in the glossary. Beginners, doing their first steps in the forex trading world wold highly benefit from reading the glossary. All this knowledge makes 10 forex .com a great resource for forex traders.

Forex trading is a stressful activity. Traders risk their money, often gaining loses. One helpful way to decrease stress and increase chances for profit is gaining as much knowledge as possible. 10 forex .com helps traders all around the globe increase the ability to understand forex and to have all the tools needed to trade. Connect now to http://www.10forex.com, start learning and improve your trading skills.

Hungary move to prompt C. Europe forex rethink

2008-02-25T11:26:00.000-08:00

By Sebastian Tong

LONDON, Feb 25 (Reuters) - Hungary's surprise move on Monday to abandon its currency band is unlikely to derail plans by its central European peers to adopt the euro but could prompt some of them to switch to more flexible exchange-rate systems.
Analysts say Hungary's sudden decision to replace the forint's trading band against the euro with a free-float regime underscores the difficulties faced by some euro zone aspirants in meeting inflation targets set by the European Union.
Faced with a slowing economy and rising inflation, Hungary ditched the forint's 30 percent trading band against the euro -- an arrangement in place since 2001 -- saying that the change would enable the central bank to use its monetary policy more effectively to manage inflation. [ID:nL25162043]

Some would-be euro zone members face similar, though not identical, exchange-rate constraints but further inflation shocks could nudge those with exchange-rate bands or currency pegs towards greater flexibility.
Bulgaria, Estonia, Latvia and Lithuania, which have currency pegs to the euro, could consider a currency adjustment if inflation were to rise further, analysts said.
"If inflation is due to external factors then you need an exchange rate mechanism to deal with it but countries don't have any tools to deliver a response to domestic inflation if their currencies are pegged," said Commerzbank strategist Barbara Nestor.
Ratings agencies have warned Bulgaria and the three Baltic states that they face an abrupt and painful slowdown because of their rapid growth and huge current account deficits.
Bear Sterns' Emerging Europe Economist Tim Ash said the Hungarian move could intensify a brewing debate within Ukraine -- which has declared its interest in the currency union -- over its exchange-rate band for its hryvnia currency.
"Ukraine might come under pressure to widen its trading band more towards appreciation, in order to deal with its inflation," said London-based Ash.
NO EURO WAVE
However, analysts don't see immediate currency regime changes among these countries as policymakers are more likely to allow the expected global economic slowdown to work its way into their economies and dampen price rises.
The Hungarian move is seen having minimal impact on euro zone candidates that have more flexible exchange rate regimes.
Slovakia, which has enjoyed strong economic growth, remains on track for euro accession, analysts said, and is expected to reach an end-July agreement with the European Union on its currency conversion rate to the euro.
However, Lars Christensen, Stockholm-based head of emerging markets research at Danske Bank, said Hungary's surprise decision on its currency suggests that inflation is likely to trip up euro zone ambitions.
"Having admitted countries in the past with monetary policy that was too loose -- Slovenia, Spain and Ireland -- the European Central Bank is now looking for real convergence rather than nominal convergence."
"We have to face up to the fact that we're not standing in front of a wave of countries adopting the euro." (Reporting by Sebastian Tong; Editing by Ron Askew)