The Management Consulting Group

Okay, You’ve entered what you think is a low risk trade, having deduced that this was the perfect time to go long. Your indicators all line up, and CNN reports good 1st quarter results in the sector your trading. Now, you watch in utter dismay as it turns against you, hitting your mental stop, and you impulsively decide to ride it out, hoping (a traders worst enemy) it will reverse and make it to at least break even. Inexorably, it continues to head down, and you finally get out, looking at another gut wrenching loss.

You’ve just become a victim to the most common pitfall that befalls the majority of traders. Listen, most people, when they get involved with trading, imagine some barefoot maverick making million dollar trades from his dockside home on a laptop from a lawn chair, with a view of his yacht named “Shorted Gold”. And most traders subconsciously behave like that’s the way to do it. In reality, most million dollar trades are initiated by some MIT graduate math nerd, who talks to himself in a nondescript back room of a brokerage house, but no one can hear him over the racket the computers make as they crank out Black-Scholes estimations with Brownian probability curves tweaked for each market sector…You get the drift.

You can’t succeed against this kind of competition by letting your emotions get in the way. Most traders don’t get it. They flail around buying software programs, trading systems, stock market advisory newsletters and, you know, the thousands of come on’s sold on the internet and on the back of trading magazines.
Let me tell you a secret none (I would capitalize this but they won’t let me do it on this site, so I’ll say it again, none) of these sellers, Wall Streeters, or any broker will admit to.
Are you ready? Come closer so you’ll hear this.

It’s not the Trading system that matters.

Hoof, you say. I know it flies in the face of all the articles and advice you’ve read, but the most important piece of advice you’ll ever get, and don’t forget it’s from me, is to watch yourself, as you do what your doing. Watch yourself as you trade, watch your emotions, and have the discipline to override any impulse to do anything other than your pre arranged plan.Do me a favor, before you do your next trade, do this one thing and I guarantee you will be grateful. Get yourself a couple small 4×6 or so cosmetic mirrors from the drugstore or from around the house. Set them up in front up your computer in such a way as to see yourself as your watching your monitor, a side view. Now stay with me here, it sounds crazy…. before you click the next buy or sell, look at the mirror and ask these questions in the third person,

“Why is he buying (or selling) now?
Answer out loud so you can hear it.

“On what factual basis is he basing his decision on?”
Again, out loud.

“Is he letting fear or hope alter his view on this trade?
You have to answer this one out loud and truthfully.

“If it goes against him, at what point will he exit, and if it goes well, what is the profit exit? Ditto

You see the beauty in this? It helps you separate yourself from your emotions, so that you’ll never be hoping a trade will go well, or be in a trade because you just had a loser and you’re trying to get even before the market closes.

Okay, I lied a little. Some systems are somewhat better than others, but if you only do this one thing, watch your emotions as you trade, you will do ok. Without that no expensive software or newsletter is ever going to make any difference. What makes the difference is you and your ability to control your emotions. You must first deal with the most difficult thing we all have to deal with, which alas, is what makes us all human after all..

Before you lose another dime to Wall Street sharks and brokerage houses, check out Paul Nickel’s low risk trading strategies at http://lowrisktrading.info/ and learn about the best tool to becoming a shark yourself.

Spending a whole day watching stock indices, you get the same feeling as riding a roller coaster. It is always breathtaking whether you are going up or down.

On the way up you begin to feel uncertainty creeping in. ‘This can’t go on forever’, you think. Mr. Central Banker in the front car is already saying he’s worried, and the analyst beside you agrees. Just before the peak, you begin to feel the momentum subside. Somewhere behind you hear a worrying rattle, and for a moment everything stops. Your analyst is silent and looks pale.

One the way down your head can’t stand the drop, and the wheels seem to be coming off the car. Catastrophe seems imminent - the scale of which has never been seen before. Your stomach is turning. A prophet is sitting behind you screaming how capitalism and the market economy have come to the end of their road.

You open the local business paper, which tells of the roller coaster ride under the heading “Index may hit 11 000 - what then?” The index’s crazy black line runs across the paper from the start of the year to the current month. The future is uncertain. A number of experts predict the next turn, while a professor gives his own opinion. Beneath, a number of pedestrians are quoted on how a closing of 11 000 will affect their lives.

Luckily, the ride on the roller coaster is not mandatory. Those who don’t need the added tension in their lives can skip a turn or two. You invest only in quality companies at appropriate intervals. You keep your investment horizons open and enjoy the view from the average height of the ride. In a few years you have probably seen enough rises and falls. They no longer disturb your sleep. Prices change, but they always seem to develop positively over the years - and good companies even pay dividends.

To the prophets and analysts you wish success, as you yourself are not riding the roller coaster. If you want to cash in, you can always sell those shares you bought long ago for next to nothing. Are you getting the most out of the stock market? Maybe not, but at least you are sleeping better and living in peace.

Jouni Koistinen is the editor and publisher of Investori.com online magazine in Finland. He has written about investing since 1998.

This is a key part of the earnings-season dance that is often ignored by investors to their detriment. The company’s post-report conference call with analysts and other market insiders is what makes earnings such a nasty play.

For the most part a stock will move higher as its earnings release date approaches. During the “earnings run” about three-quarters of companies considered “good ones” will indeed move somewhat higher in the week preceding their actual earnings release. As the actual earnings date comes near, we have a significant problem: Do we hold through the earnings release hoping that the company will blow away the numbers and the stock will soar; or do we sell out in case the numbers are weak?

For years we have preached getting out ahead of the actual release. About 70% of the time a stock will sell off immediately afterward-even when the company
meets or exceeds estimates. We have seen that many times during the current earnings campaign.

Why? First, you get some of the old “buy the rumor sell the
news” theory that comes into play. Second, you never know what is going
to be said by company officials during the conference call that follows the earnings release. That’s where the rubber meets the road.

We used to see examples of a stock that is expected to make 45 cents and actually posts 52 cents and they get a big stock drop. The reason: During the conference call management said something like, “Going forward we don’t think we can sustain the growth level of the past quarter.” That is all traders need to hear. With stocks priced at high multiples of future sales and earnings, they don’t want to hear anything about future growth being unsustainable.

On the other hand, we have all seen a company actually miss the estimates but
explain during their call that it was just temporary and that going forward they expect to increase sales and revenues. The next day the stock flies. We never really know what is going to be said and therefore holding a stock through earnings is a poor risk-to-reward scenario. More times than not the stock is going to drop and you are going to take a hit.

So our best earnings play is to buy into your favorite company about 5-7 trading days ahead of the actual earnings release and sell out either the day before or the morning of the actual release (if the release is scheduled after the close). You may miss some upside, but you will be spared a severe spanking if they either miss or worse, say something stupid during the conference call.

If you want to listen to the conference call yourself, go to the company’s web site. They will usually announce the date and time of the release of the report and where to go to hear the chatter.

For a FREE report on HOW TO TRADE FAST, enter your email address at:

http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

Why is it that some people are successful in trading the markets? And why is it some people fail? Is it luck that determines if you are successful or not in making money from the market? Is it the system or strategy that a person use which determines their success?

A lot would say that it is the system or strategy that they employ which ultimately determines if they come out winning from the market.

Every system that exists on the internet will show you how to make money using it. Without a doubt, it will make money for you. The question is usually how much money will the system make for you. All the system that out there will show to you how their system has work base on historical data or activity and then at the bottom of the page there would be a disclaimer clause that states ‘.. Historical data does not determine or guarantee future earnings….’

So why is it that these sites or page include this disclaimer clause?

The disclaimer clause is incorporated in it because they know that there are certain elements which they can not control. Human emotions.

Human emotions are always the key to either success or failure in any business. And it is no difference when trading the markets. Read all the books about trading that you want, buy all the successful system that you want. If you can’t control your emotions, you can’t succeed in the markets.

That’s the reason for the disclaimers clause because the one thing that the author can not control is their subscribers or customers emotions.

In the market there are but only two main emotions that every trader will experience; GREED and FEAR. When this emotion appears it is not how we eliminate it but rather how we act on it. There are natural emotions that can not be eliminated. This emotions forces us to action, thus how we act on it will determine the outcome.

Like anger, when we are angry at someone, it’s either we say something nasty or we can just kick a bucket or we can just dive into a pool of water. Which ever action that we take, it produces a different outcome or result.

All too often when we begin to see two to three consecutive loses on our trading activities, we would begin to have doubt. When this happens we are already at the state of fear, we fear losing more of our money and thus begin to doubt that the system is working.

While no system is absolute, meaning no system will guarantee that you will make money ALL the time. The system seller would say that we would be able to make money consistently, provided we follow their system to the dot.

On the other hand, when we begin to see two or three consecutive we begin to feel on top of the world. We begin to feel that we can start making good money from the market and then start tweaking the system or maybe putting more money in the market to leverage our earnings or maybe begin to take on more positions, which ultimately make us deviate from the system which we were using. This is when greed has already stepped in to rule our thoughts.

There is saying ‘The system is only as good as the person using it’. So if we don’t follow the system either with we are making loses or when we are creating profits. We would ultimately fail. And to follow the system requires discipline. The discipline to act on our fear and greed when it sets in, will determine how well we do in the market.

Once again discipline is the key. We must have the discipline to say ‘I have reached my target. I should take profits now even though it may go higher’ when greed sets in. And when fear sets in one should say ‘I have to take a position even though the market does not seem to be moving in my favor’

While these are but two circumstances when greed and fears arises, there are, and will be many instances when we need to make a decision to either enter or exit the market. And these are very two most important decisions to take in order to succeed in the markets. The discipline to follow the system diligently no matter what happens to the market

So no matter how good the system is, the only and sure way is to lasting success in the market depend on the discipline to overcome our personal emotional to follow a particular system religiously.

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About the author

Casey Lim is a part time trader, who share his experiences in his journey into trading the markets while keeping a day time job. His objective is to make every trade a profitable trade every time which he believes is possible.

His site Celestial Trading is all about sharing information about trading the exchange markets; stocks, futures, commodities, and forex. There are articles and resources to help visitors make their trading journey a more successful and profitable experience.

Certificates of deposits (CD) are short to medium-term debt instruments issued generally by commercial banks and other financial institutions to investors. These deposits are issues by the banks in any denomination. Investors will lend money to the institutions for a certain amount of time in which investors cannot withdraw the amount. In exchange, the banks will pay a predetermined rate of interest to the investors called Certificate Of Deposit Rate (CD Rate). If the investor opts for a CD having longer maturity, the rate on interest that he earns will be higher. This is based on the logic that the investor will lose accessibility of his funds till maturity date and forego alternative uses of his capital.

The best feature of a certificate of deposit is lack of market risk. CDs in the U.S. are protected by the Federal Deposit Insurance Corporation (FDIC) if they are issued through a bank. This means its value won’t change based on fluctuations in the stock market. If we compare CDs with other investment instruments like Money Market Mutual Funds, the rates of return on CDs are reasonably higher.

Certificates of Deposit bear a fixed rate of interest, fixed maturity period and can be issued in any denomination. Generally, they are sold in the multiples of dollars. Early withdrawal of amount before maturity date will penalize the depositor. That penalty may be in the form of loss of interest for a few months. The investor can overcome this drawback by implementing the phenomenon called ‘CD Laddering’.

The amount of interest that an investor can get on a CD can be determined with the help of Certificate of Deposit Calculator which requires an investor to feed up some details regarding the amount of deposit, required rate of return etc. The two major factors that determine CD rates are the length of the maturity period and the current interest rate environment, which includes the rates offered by competitors. The history of CD rates reveals that the rates were between 2-16% worldwide during the last 30 years.

CD Rates provides detailed information about CD rates, CD rate calculators, CD rate comparisons, and more. CD Rates is affiliated with Online Brokerage Firms.

Eighteen months ago, the Federal Reserve embarked on a long, but predictable road of lifting short-term US interest rates, to reach an unknown “neutral rate,” that would neither stimulate nor weaken the US economy. Federal Reserve chairman Alan Greenspan did not know when the neutral rate would ultimately be reached, but after lifting the fed funds rate by a quarter-point to 4.25% on December 13th, the Fed did not mention the “A” word, or “accommodative” in its policy statement, a signal to the financial markets that the elusive neutral rate was near.

The US dollar fell sharply in the foreign exchange market, gold rose above $500 per ounce, homebuilder stocks pushed ahead in a knee jerk reaction, and global equity markets cheered with a big Santa Claus rally, since the end of the Fed’s tightening campaign is apparently on the horizon.

But Greenspan is still perplexed by what he calls the “conundrum” of the bond market. The central bank gradually lifted its overnight loan rate by 325 basis points to 4.25% over eighteen months, yet the Treasury’s ten year yield had barely budged. The ten year yield rose by only 15 basis points to 4.40%, since the rate hike campaign began in June 2004. Logically, the Fed might have figured that long term rates would rise by at least 100 basis points in response to tighter monetary conditions.

When the Federal Reserve lifts the fed funds rate by quarter-point to 4.50% in January 2006, as widely telegraphed, the yield on the Treasury’s two year note could be higher than ten year yields, producing what is known as an “inverted” yield curve. Usually, when lenders in the bond market are willing to accept lower interest rates for longer term debt than for shorter term debt, it is a signal that the US economy is about to experience a serious slowdown or even a recession within twelve months.

The last time the bond market witnessed an inverted yield curve was five years ago, at the height of the frenzy for internet and high tech stocks. Then, the bond market was inverted, but stock market investors were not afraid, and argued that its shape reflected the Clinton administration’s retirement of longer term debt from huge budget surpluses. But the Nasdaq and S&P 500 did begin to implode in 2001 and an eight month economic recession arrived in 2002. Today, in January 2006, there is speculation that the US housing bubble might deflate next, bringing on a recession and an easier Fed policy in the second half of the year.

But never before has the US bond market been so closely intertwined with the global money markets. In 2004 for instance, China and Japan bought a combined $300 billion of US Treasury bonds. While Japan moved to the sidelines in 2005, Arab oil producers picked up the slack and rolled about $115 billion of Petro-dollars into US Treasuries. China boosted its bond position by another $79 billion during the first ten months of 2005. So while the Fed was raising short-term rates, China, Japan, and Arab oil producers were putting a lid on longer term interest rates.

Once again, stock market investors say there is nothing to fear from an inverted yield curve, because it is simply distorted by foreign buyers of bonds, and does not signal an imminent bursting of the US housing bubble, which could crush the economy. But recent indications are ominous. New US home sales fell 11.3% in November, the largest monthly drop since 1996, and applications for home mortgages fell to a 3- year low. Existing home sales fell 1.7%, for a second month in November, while home prices fell $3,000 to an average $215,000, and the number of homes for sale rose to an annual 2.9 million, the highest in 20-years.

Then on January 1st, 2006, Yu Yongding, chief adviser to the People’s Bank of China warned for the second time in a month, that Beijing should scale down its purchases of US dollars and bonds. Yu warned that the new Fed chief Ben Bernanke might start lowering US interest rates in 2006 and start guiding the dollar downward, and putting upward pressure on the yuan. “More seriously, China’s economy would take a big hit if the US dollar weakened sharply due to such factors as a bursting of the US property bubble. The loss for China’s foreign exchange reserves would be extremely serious,” Yu said.

China owns $794 billion of foreign currency reserves and could acquire an additional $200 billion from foreign trade, direct investment and interest revenue on its bond portfolio, to reach $1 trillion of reserves by the end of 2006. If China slows its purchases of US Treasuries or becomes a net seller, US bond yields could rise, underming home prices. Also, Arab members of the OPEC cartel, who buy and sell US bonds through their London based brokers, could turn into sellers of US bonds, if the dollar turns south, to avoid possible foreign exchange losses.

Only time will tell how events unfold, and what the inverted yield curve is signaling, a distortion or danger ahead. But one should remember, that every Fed chairman is presented with a financial crisis or two during his tenure, and the former Princeton professor Ben Bernanke will probably be tested with some real world turbulence, far removed from the ivory towers of academia. But then again, the mythical retiree, Alan Greenspan is only a phone call away for some fatherly advice.

This article may be re-printed for use in other publications

Copyright ©2006 SirChartsAlot, Inc All rights reserved.

Gary Dorsch wrote a weekly newsletter from 2000 thru September 2005 called, “Foreign Currency Trends” for Charles Schwab’s Global Investment department, featuring inter-market technical analysis, to understand the dynamic inter-relationships between the foreign exchange, global bond and stock markets, and commodities. As a transactional broker for Charles Schwab’s Global Investment Services department, Gary handled thousands of customer trades in 45 stock exchanges around the world, including Australia, Canada, Japan, Hong Kong, the Euro zone, London, Toronto, South Africa, Mexico, and New Zealand. Extensive experience in trading Canadian oil trusts, ADR’s and Exchange Traded Funds. Currently he is editor of his own financial analysis web site:

http://sirchartsalot.com/

We spend a great deal of time trying to spot stocks heading in the right trend, or direction. Careful attention needs to be given to the support and resistance lines. These lines are also called trend lines. Here are seven reasons why the trend can be your friend in investing:

1. These lines draw the general trend, or direction, the stock is heading. They’re not used for daily tracking, they’re more of a longer-term direction that the stock, mutual fund or commodity is heading. If you are using a longer term approach, the trend is what you really want to know, not necessarily the day to day wiggles in a stock.

2. Often times, the trend line will give you guidance in a stock for years, not just weeks or months. But these support and resistance lines are often bumpers, or guardrails, along the way. Stocks often drift toward their support or resistance lines and then bounce back in the opposite direction.

3. If you can pick off a stock you find attractive as it is bounces off the support line, it could be a terrific time to buy. The reason is you have a strong, logical place for your stop point…just under the support line, which is really close by. This helps minimize the amount you have at risk.

4. Some of the best winners come from stocks that are purchased just as the stock breaks through overhead resistance and forms new patterns. Holding the stock until it breaks support line (which might be possibly many months, or even years later) can really help your overall performance!

5. The reasons behind why a stock jumps through a brick wall are often not clearly visible. The reasons for the move may emerge days or weeks (or even a year!) down the road. But when a stock or a mutual fund breaks through the trend line, either up or down, it’s important news.

6. If a stock or mutual fund we are following breaks through it’s overhead resistance, we have a high level of confidence that the stock will continue to climb upward.

7. Lastly, if the support line of your mutual fund or your stock is broken, beware! This is a very clear signal we should consider selling a portion (or maybe even the entire) position. Breaking the support line is the ultimate sign that supply is now clearly in command. Your principal is now at risk.

Thomas P. Mullooly, President of Mullooly Asset Management, LLC (http://www.mullooly.net) has spent over twenty years in the investment industry, as a broker and as an investment advisor. Feel free to contact us to check out the relative strength of your portfolio by sending an email to tom@mullooly.net or visiting http://www.mullooly.net/403b-plan.html or sign up to receive the market report and tips on how you can soundly invest your money at http://www.mullooly.net.

Investors often find it difficult to decide on the right time to invest. There is a tendency to invest when everyone else is investing. Mutual funds have devised a very sensible solution for investors to deal with the issue of timing - The Systematic Investment Plan. In SIP the investor buys units every month for a specific amount so his investments accumulate over time, and he is able to participate in the market regularly without worrying about the right timing.

Many investors seem to invest purely because the debt markets have under delivered in the last two years. If this is the reason for shifting into equities, then this reasoning is clearly flawed. Every investor must seek to practice asset allocation - whether equity or debt. It would be a good idea to be in both and investors who can’t determine the ideal asset mix, may want to see a financial planner.

Investors should also a being taken in by Credit as it could lead to investing in the right products at the wrong time. Investors should always try to keep a balance, instead of investing all the funds into one product. It is a good idea to have a core investment in a well diversified equity and debt fund and then add to it, the other funds like sectoral funds, specialized funds and the like. Equity funds focusing on different sectors and styles have both risk and returns. For Debt funds, the short-term funds would be less risky, but will have low returns whereas long-term has high risk and more returns.

Fund: Investing too little is risky, and too many is unwieldy. It is a good to invests across 3-4 funds, and buy the products of large, well known funds.

Investors have to review a mutual fund portfolio very often, most of them publish their portfolios every month. Investors can check for returns and performance of a fund to judge how well a fund is doing.

Staying invested pays better than churning too often.

Vinod Chavan

Obtaining mortgages and loans along with buying on credit all require that your credit impression is affirmative and that you aren’t a victim of bad credit. A progression of debt is experienced by a person with a low credit score as credit businesses will charge a heavy price for their service. Many people today think that the costly methods of obtaining credit repair service is the only way to repair bad credit, but with a little effort many simple and inexpensive tips can be implemented.

The fundamental step is to determine the reason of bad credit. If you can establish the ground of your negative credit status, only then can you rectify your status. Unforeseeable
predicaments such as job loss, funeral or hospital expenses, etc can be the main factors of bad credit. 

Next, a feasible explanation can be distinguished by going to the bottom of the difficulty. Your credit reports can let you know your up-to-date debts, credits and financial activities. Prior knowledge of your financial position can repair your bad credit which is why yearly credit reports should be studied.
Moreover, the latest credit actions can be tracked by maintaining a documentation of all the updated reports.

Organize and manage your expenses.Lower your credit card utilization and do not postpone your bill payments.
You will realize that a credit score can be attained and your reputation with your creditors will become favorable.If you are unable to resist the desire of using credit cards then think over the lives of early people which were better without credit cards. End moment bill payments are also a explanation for plunging into bad credit as numerous people have suffered an overdue payment because of a delay in the credit procedure. Repair bad credit by instilling stability in your payments.

It’s recommended to use the direct method with your creditors and have a talk with them. Better discounts can result by a competent discussion. compelling resolutions can accomplish your targets when talking to your creditors.

All such circumstances which can pose a threat to your credit status should be avoided to prevent you from gaining a negative credit score. Bad credit can be hazardous to your position in society which is why it is recommended to apply the methods outlined above.
Bad credit not only lays impediments in your way of getting a worthy job but also extend problems in getting loans or in the acquiring of a luxury. Prompt action to repair bad credit can ensure that your credit profile is secure and unharmed even after falling victim to bad credit.

Anxiety strategies are very helpful to have if you or a loved one experience anxiety attacks or panic attacks. They can lessen the severity, reduce symptoms, and help you to deal with the symptoms and even reduce occurrences of anxiety attacks.
For an in depth guide on strategies on how to deal with and stop anxiety attacks, get How to Stop Anxiety Attacks now.

It also provides some steps and preventative measures and how to deal with anxiety attacks and stop them.

Basic anxiety strategies include: Remind yourself that what you are going through is an out of context reaction of your body’s normal reaction to stress. Be concious of the fact that however frightening or scary your anxiety symptoms are, they are not harmful or dangerous.

Be aware of what the reality is of what is really happening to you, and don’t focus on your thoughts of what might happen, and don’t focus on how bad things may seem.
When your anxiety attack comes, let it. Don’t try to deny or fight it, just ride it through and acknowledge it for what it really is and let it run it’s course.

When you begin to snowball with fearful thoughts, focus on your immediate surroundings. Count objects in the surrounding space, count to 10, or distract yourself. These are of course easier said than done, but they work. With practice, they can become a normal part of your coping mechanism, and can become an almost natural reaction to your anxiety attack and panic feelings.

When you do obtain this level of comfort with implementing these ideas, it will make a big difference in your response and symptoms of anxiety.

How to begin investing is something that everyone should learn in these tough economic times. Most business common sense tells you to buy low and sell high to make a profit. Most people do the opposite when tough economic times hit.. When stocks begin to fall, they get out to “cut their losses.” Then, they wait for the market to come back before they buy again. This logic is basically flawed and goes against what is needed to learn how to begin investing.

Internet marketing can provide the quality of life that eludes most people, and if properly executed, can provide a new career and income source. Learn some of the best internet marketing tips, copywriting insight and tricks of the trade from internet marketing.