Financial News Hub

Charting:

The time frame used for forming a chart depends on the compression of the data: intraday, daily, weekly, monthly, quarterly, or annual data. Traders usually concentrate on charts made up of daily and intraday data to forecast shorterm price movements.

The shorter the time frame and the less compressed data is, the more detail that is available. While long on detail, short term charts can be volatile and contain a lot of noise. Large sudden price movements, wide high-low ranges and price gaps can effect volatility, which can distort the overall picture. Long term charts care good for analyzing the large picture to get a broad perspective of the historical price action. Once the general picture is analyzed, a daily chart can be used to zoom in on the last few months. Four of the most popular methods of displaying price data are by the following charts: line bar, candlestick, and point & figure. The line chart is one of the simplest charts. It is formed by plotting one price point, usually the close. For that matter, I don’t favor them because I personally consider the open, low, and high to be as important as the close in technical analysis. However, at times, only closing data are available for certain indices, thinly traded stocks and intraday prices. Bar charts are perhaps the most popular charting method. The high, low, and close are required to form the price plot for each period of a bar chart. The high and low are represented by the top and bottom of the vertical bar and the close is the short horizontal line crossing the vertical bar. On a daily chart, each bar represents the high, low, and close for a particular day. Weekly charts would have a bar for each week based on Friday’s close and the high and low for that week. Bar charts can be effective for displaying a large amount of data.

Using candlesticks, 200 data points can take up a lot of room and look cluttered. Line charts show less clutter, but do not offer as much detail (no high-low range). The individual bars that make up the bar chart are relatively skinny, which allows users the ability to fit more bars before the chart gets cluttered. If you’re not interested in the opening price, bar charts are an ideal method for analyzing the close relative to the high and low. In addition, bar charts that include the open will tend to get cluttered quicker. If you’re interested in the opening price, candlestick charts probably offer a better alternative. The beauty of Point & Figure charts is their simplicity. Little or no price movement is deemed irrelevant and therefore not duplicated on the chart. Only price movements that exceed specified levels are recorded. This focus on price movement makes it easier to identify support and resistance levels, bullish breakouts and bearish breakdowns. Contrary to this methodology, Point & Figure charts are based solely on price movement and do not take time into consideration. The topic on candlestick charting is broad and beyond the scope of this article. This method of charting originated in Japan over 300 years ago, and have become quite popular in recent years. For a candlestick chart, the open, high, low, and close are all required. A daily candlestick is based on the open price, the intraday high and low, and the close. A weekly candlestick is based on Monday’s open, the weekly high-low range, and Friday’s close.

Trendlines:

Trendlines are an important tool in technical analysis for both trend identification and confirmation. The general rule in technical analysis is that it takes two points to draw a trendline and the third point confirms the validity. An up trendline is formed by connecting two of more low points. The second low must be higher than the first for the line to have a positive slope.

Up trendlines act as support and indicate that net-demand (demand less supply) is increasing even as the price rises. A downtrend is formed by connecting two or more high points. The second high must be lower than the first for the line to have a negative slope. Down trendlines act as a resistance and indicate that net-supply is increasing even as the price declines.

The Securities Investors Protection Corp. (SIPC), often assumed to be analogous to the Federal Deposit Insurance Corp. (FDIC), insures retail brokerage accounts for up to $500,000 each in the event of a catastrophic firm failure. The SIPC is non-profit organization funded by its member securities brokers, created by congress in 1970 to promote confidence in the US securities markets. The coverage is event-neutral in the sense that it replaces missing securities and cash whether they disappeared in an earthquake, fire,flood, or were stolen by a broker. Missing securities are replaced at their current market value which may be a fractionof their previous value.

To meet its obligations, SIPC currently has $1.25 billion of capital which invested in US Treasuries as required by law. It also has a $1.0 billion private syndicated line of credit to draw on should its capital be exhausted. On top of that, it has $1.0 billion in line of credit from the US Treasury.

To cover losses beyond that, brokererage firms have arrangements with the following insurers:

1. CAPCO (Customer Asset Protection Co.), which is a insurer of 14 brokerages, claims that it has no dollar limit on excess SIPC coverage; yet, if you desire to specifically inquire what the financial backing is for each customer coverage, president Frank Lagerstedt labels such information as “proprietary.” Lagersterdt has legal backing for withholding the information. The New York State Insurance Dept has repeatedly denied my Freedom of Information Act (FOIA) request for CAPCO’s financial information.

In fact, CAPCO declines to provide any information about its capitalization. The New York State Insurance Department denied Bloomberg Wealth Manager’s FOIA to see the firm’s financail statement, citing New york Insurance Law, section 7003 (c) (3). Under New York Insurance Law, section 7003 (c) (3), the information filed by a captive insurer in its application for licensing is “given confidential treatment and shall not be the subject to public inspection… except to the extent the superintendent finds release of information necessary to protect the public…”

Furthermore, it is not known how much reinsurance CAPCO has or how much of the member premiums go to boosting the company’s capital. Also, CAPCO won’t disclose whether memeber firms are required to ante up addtional capital if a large claim drains its resourses. Moreover, none of the company’s officers explain how its “risk remote” potential liabilities are quantified. It is strongly believed that CAPCO is unable to quantify the risk for the same reasons the commercial insurers couldn’t. For that matter, the company is most likely undercapitalized.

Member firms belonging to CAPCO are: Robert W. Baird, Bear Stearns, Credit Suisse First Boston, A.G. Edwards, Goldman Sachs, Edward Jones, Legg Mason Wood Walker, Lehman Brothers, J.P. Morgan Chase, Morgan Stanley, National Financial Services, Pershing, Raymand James Financial, and Watchovia Securities.

2. Lloyd’s of London offers $150 million per customer but no more than a total of $600 million per broker-dealer for customer losses. Its client firms are Ameritrade, E*Trade, Merrill Lynch, Charles Schwab, Smith Barney, Citigroup, T.D. Waterhouse.

3. XL Insurance insures for up to $600 million in total customer losses. Its member firm is UBS Financial Services.

If brokerages are going to use excess SIPC coverage for their customers, don’t they owe an explanation of how they intend to provide it? It is highly suggested that excess SIPC coverage is little more than a marketing tool for brokerages that say they offer it. Most brokers claim that they purchase insurance for the sleep-at-night factor, and that excess SIPC has always been a nice enhancement for clients.

It is my personal adamant belief that rather than considering the amount of excess SIPC coverage a firm carries, an investor should place more emphasis on its financial strength.

When people feel like their financial situation is spiraling out of control, they often quickly seek out a debt consolidation loan. Although that may be the correct choice to make, these 8 options should be considered first.

1) Selling assets to pay debt should be done first. There may be a way for you to pay your debt without a consolidation loan if you can create more money. This additional money can come from selling assets that you already have and don’t need anymore. Amazon, Ebay and the local newspaper classified ads are a great way to make a few extra bucks from items that you can sell. If you are a homeowner with a large debt, you may even consider selling your house or renting out a spare room.

2) Pay as much as you can towards your credit cards. If you are able to make your minimum credit card payments you should consider how much additional money you can pay off each month. Reduce excess spending wherever possible and pay as much as you can on your credit cards. If you don’t settle for making just the minimum payment, you can make a significant impact in your debt over the course of 12 to 24 months. If your debt situation makes it difficult to meet the minimum payment, a consolidation loan may be easier for you to manage.

3) If you own your own home, the lowest interest rates are obtainable by taking out a new mortgage to pay off your existing mortgage (if any) plus enough funds to repay you other debts. If repaying your existing mortgage will result in penalty charges consider a 2nd mortgage with your existing lender. The interest charged will probably be slightly but not significantly higher.

4) Take out a secured loan with another lender. If you have already missed or been late with any payments, and as a result your credit score is too low for your mortgagor, consider a secured loan with another lender. Secured loans in these circumstances are more expensive and the lenders are quick to repossess your home if you miss payments. Only take this route if you are certain that you can make the repayments.

5) A loan secured on other assets. If you have an expensive car, boat or plane you will probably be able to obtain finance using these assets as security. The rate of interest will be higher than a loan secured on property. If you do not have property or it is fully mortgaged securing a loan on other assets may be an option.

6) Consider loan that is unsecured. Although a secured loan will typically have a lower interest rate and can be repaid over a longer period of time, you may not have anything to use as security for a loan. Additionally, you may not want to risk having your property repossessed if you miss a payment. In this case an unsecured loan will be worth considering.
Low interest credit cards. When your debt is not too high and your credit score is pretty good, you will probably be able to apply for a credit card with a low interest rate or even a 0% rate on balance transfers. A credit card may actually be able to offer a better rate and you would find on any loan. However, be prepared to pay off the balance of during the transfer period or you could end up with an even higher rate.
Do your own research of the options. There are many possible courses of action that you could take to get out of debt. Some are better than others, some may be obvious and others can be confusing. Thoroughly research the choices for your own situation before making a final decision. Talking to different lenders and banks may be able to help give you more information so that you can compare your choices. Asking a bank for advice won’t commit you to anything, but it might help you get out of debt.

Debt consolidation can be a great choice for many people when burdened by debt. However, it is not the only solution and getting out of debt will take a little determination, effort and some time no matter what course of action is used. The benefits are worth it though and your life will be much less stressful and enjoyable when you are not overwhelmed by debt.

Advancing computer software technology has lead to a lot of interest in automatic forex system trading robots. After all, what could be better than to place a relatively small amount of money in a forex brokerage account, say $1000 to $5000 dollars, and see your account balance double every month or two while you are busy enjoying life? Is such a happy result possible or is it just another Internet dream?

It is important to realize that the forex market itself is huge and very genuine. The forex market is by far the largest financial market in the world and involves the world’s major banks, brokerage firms, and trading houses. The forex market is open 24 hours a day, 5 days a week. The trading volume is usually 3 to 4 trillion USD a day. There is always the opportunity for a competent trader to take a juicy profit from this huge pool of liquid capital. Unfortunately, even with all of the opportunity to prosper probably a good 95% of forex traders fail.

Why is the failure rate among forex traders so high? A few reasons follow:

1) Many traders completely lack discipline. Being unable to keep your emotions under firm control and especially over trading can result in a series of losses that can add up to disastrous losses.

2) Forex traders tend to use too much leverage. When you trade at 100 to 1 leverage, which many forex dealing firms offer, just a 1% adverse market move will wipe you out. You would be wise to trade at no more than 10 to 1 leverage or even 5 to 1, but few forex traders are able to contain themselves and trade at the maximum (and dangerous) amount of leverage offered.

3) Most traders have a poor money management strategy. They enter the markets far too often and at price levels where they take on poor risky trades.

4) They lack a solid forex education. Many beginners believe that they can open an account, throw a couple of thousands dollars at it and easily make a profit. Usually this is not the case. In order to become a successful trader, you need to educate yourself in every aspect of trading, like learning how to read charts, practicing in a demo account, computing the risk of entry, and others.

5) Novice forex traders don’t use the right trading tools. It is essential to follow a solid well developed trading plan and to use reliable forex software and a trading platform that can help you to determine the direction of the major market trend for the currency you are trading. You will need help in determining pin point high potential, low risk, entry points.

One very serious problem in trading forex markets is that they are open continuously from early Sunday evening (in the USA) until late Friday afternoon. No one can stay sharp and focused over that long of a time period.

A good automatic robot forex trading system will trade with better results than the majority of traders. For one thing the robot is not at all influenced by emotions. For another, a good automated forex robot will only enter the market when there is a good chance of a profit on the trade. Trying to monitor the forex market 24 hours a day is crazy and nearly impossible. For a human, that is. By using an automated forex robot trading system and following a sound money management plan most traders will stand a much better chance of trading 24 hours a day at a profit. Another big plus…once set up the forex trading robot is a tireless unselfish worker who toils away 24 hours a day and yet turns over all of the profits to you.

One old expression claims that if you don’t break a dollar, you won’t spend it. And it’s true, especially when it comes to larger denominations of money. Many people find it easier to spend smaller amounts of money, thinking that they will save money since they are not spending a lot at once. In the end, though, they spend a lot anyhow. Controlling those small purchases, however, is one great way to save a substantially large amount of money. Think about how you can do it.

Cut the coffee shop out of your day, or break that smoking habit that you’ve been promising to break. Take that $4 and put it into a savings account at the end of every week. By the end of the year you will have added around $1000 (depending on how many weeks you have off each year).

Bring lunch to work instead of buying it. Not only will your meals be more varied and healthier if you do this, you will also save quite a bit of cash, roughly $5 a day. That adds up to $1,250 in a year.

Eat in more often. If you are a regular at dining in restaurants then you are probably wasting a large sum of money each year. By giving up just one meal out each week for you and your family you will probably be able to add another $2500 to your savings.

Cut your hair at home. Big families with lots of girls can save around $30 per person by caring for their hair at home instead of the salon.

Give up the cable. The television is only eating your valuable time and it doesn’t give you anything in return. By cutting the cords you could save $60 a month. That means you would be building your savings by $720 each year.

Once you build up your savings, switch them over to a higher interest rate investment option. CDs are one of the most secure, higher rate investments on the market. As you continue to grow your savings, you can seek professional advice about the best way to invest that money.

The money you save can be used to pay off your home mortgage before you normally would which will in turn save you money in interest each month. Some mortgages, though, have prepayment penalties that should be considered. Don’t accept a penalty that will cost you more than you interest payments would.