- RT @mymoneyshrugged: The government breaks your leg, and hands you a crutch saying "see without me, you couldn't walk." #
- @bargainr What weeks do you need a FoF host for? in reply to bargainr #
- Awesome tagline: The coolest you'll look pooping your pants. Yay, @Huggies! #
- A textbook is not the real world. Not all business management professors understand marketing. #
- RT @thegoodhuman: Walden on work "spending best part of one's life earning money in order to enjoy (cont) http://tl.gd/2gugo6 #
Top 7 Reasons To Trade Forex Over Other Financial Instruments
This is a guest post provided by ForexTraders.com
The foreign exchange market has literally exploded over the last 10 years. Before the 1990’s, the only players allowed to speculate in the forex market were banks, large hedge funds, and very wealthy individuals. The reason was simple. The minimum contract size was usually $100,000 and it ranged up to $1,000,000; therefore, most traders simply could not afford to trade in the market. The advance of technology and internet changed that. Today, traders can open an account with as little as $100 and begin trading in the spot fx market. This change has caused traders around the world to rush into the market and the Bank of International Settlements now estimates that average daily turnover in the fx market is around $4 trillion! Let’s examine a few of the top reasons why the fx market is drawing so many traders.
Leverage
In the United States, traders that engage in fx trading can leverage 50:1. Leverage was much higher in recent years, but government regulations have now capped leverage at 50:1 effective late October. This means that a forex trader can control a position of $50,000 with only $1,000 on deposit with his broker. Leverage is definitely a two-edged sword that can help a trader garner very quick and substantial profits, but it can also lead to debilitating losses and should therefore be used with caution.
Liquidity
The huge amount of volume that is present in the forex market each day makes it basically impossible for any single financial institution or even group of market participants to manipulate price movements. It also makes it much easier for large traders to enter and exit the market without trading against themselves, which is a common problem in the stock and commodity markets.
24 Hour Market
The forex market is a loosely connected network of international banks; therefore, the market never closes from Sunday evening until Friday afternoon. Liquidity simply flows from financial center to financial center as time zones open and close business operations for the day. This is a huge advantage for small, retail traders because those who still have full-time jobs can trade at night.
Small Initial Account Size
Traders can open accounts with as little as $1 at some brokers, and then trade positions where each 1 point movement is equivalent to $0.01 (in the U.S. this would be lower since the leverages are capped at 1:50). This will obviously never get a trader rich, but it does allow traders a very low risk entrance into the market. Traders generally need $20,000 in order to day trade the stock market. This very low account size at an online forex broker is a big draw for many traders.
Long Trends
The currency market tends to develop very clear, long trends. It is not uncommon for specific currencies to head in the same direction for 5+ years. Of course, there are many dramatic price swings that make real-time trading difficult and challenging, but a quick look at longer-term currency price charts makes it clear that currencies develop strong trends.
Macro Economics
The currency market is very big picture-based. This means there are not a million and one little things that a trader has to track as is common in other financial markets. Currencies react to major macroeconomic developments around the world. Seasoned fx professionals argue that this makes the job of economic analysis much different in the currency market.
Continued Growth and Volatility
The foreign exchange market is expected to continue to grow in coming years, and volatility is expected to remain quite strong as the world continues to move toward a more globalized economy. As globalization continues to change the world economy, investor interest in currencies will most likely continue to grow steadily.
Jason’s commentary: I’ve never looked into forex trading, mostly because I’m not in the “invest & grow rich” stage of my financial life. Have you invested in the forex market?
30 Day Project – January
This month, I have two 30 Day Projects.
My first project is to start waking up at 5am. This will add an extra 90 minutes to my day, which will give me time to manage all of my other 30 day projects. I’ll be able to wake up to a quiet house, walk the dog, eat breakfast and not start every day in a rush to get out of the house. Today was my exception. After watching 2010 arrive, I didn’t get up early.
The second project is to start reading to my children every night before bed. We read to the kids often, but not every day. That’s going to change. We are also working on breaking the girls of the family bed. If I can read them to sleep each night, it will help. Good, educational family time that makes it easier to sleep every night.
These are both habits I want to keep long after the month is up.
Failure! 30 Day Project Summary – March
My 30 Day Project for the month of March has been to do 100 sit-ups in a single set. Based on February’s results, I had a plan.
I will be doing 5 sets, morning and night, as follows:
Set 1: Half of my maximum amount.
Sets 2-4: 3/4 of my max.
Set 5: Do sit-ups until my abs start to cramp, thus setting my max for the next session.
I failed miserably.
It started off perfectly. My base amount was 20 sit-ups. I had a plan. I’d proven, at least to myself, that I was able to follow an intense workout plan, even through pain. I was encouraged by February’s results, so I dove in.
The first 3 or 4 days went well. I had some muscle strain, but that was expected. I hadn’t done sit-ups for years. I discovered muscles I actually hadn’t known existed, just from how they hurt. This was the good pain, the pain that shows progress. After doing the push-ups in February, this pain wasn’t as bad as I had expected. Push-ups are an excellent ab workout.
Maybe I became complacent. Either my form slipped, or I was going too fast and “bounced” through the sit-ups, but I pulled a muscle in my back. This was the bad pain, the pain that warns of fundamental problems. My form, my size, my history of back problems, who knows? One or more of those possible problems reared up to turn an excellent idea into a disaster. March’s plan got sidelined for a few days.
When my back was better, I started again. Again, everything was fine for 3 or 4 days. Then my back betrayed me, again. Another break, another try, another strain and I gave up. I made it to 50, then just stopped. Too much more, and I wouldn’t be able to tolerate sitting at my desk. Or maybe I just wimped out, afraid to hurt my back again.
I’m disappointed. I haven’t done a single sit-up in the last week.
To make matters worse, without the sit-ups to do in the morning, I’ve been letting myself snooze my alarm clock instead of getting up at 5. March has been such a slacker month.
Lesson learned: Always listen to your body. Don’t get tied into a specific routine–even one you created for yourself–if your body is demanding to stop. Watch your form and make sure you aren’t putting undue strain on anything that can cause long-term damage.
Lesson learned, part II: Push-ups are more fun and less painful than sit-ups. They will be getting incorporated into my ongoing routine.
Ending the sit-ups did leave me enough energy to get an early start on April’s 30 Day Project. The goal for next month is to declutter every room in the house: Every closet, every dresser, every drawer.
To start, we replaced our son’s dresser, bed, and desk with a loft-bed that combines the three. While transferring items from the desk and dresser to the new bed, everything was sorted to make sure it still fit and was used and useful. If it didn’t meet those criteria, it was either tossed or priced and boxed for a garage sale.
In the girls’ room, we removed a dresser, the changing table, a toddler bed, a convertible crib/toddler bed. It all got replaced with a set of bunk beds and the dresser we took from our son. Everything got the same garage-sale check before it was put away.
Both of these changes easily tripled the usable floor space in each room and all of the kids love their new beds. Using the magic of Craigslist, I think we got the new furniture for 10-15% of retail, and have old furniture to add to our sale, which will further defray the cost.
This leaves the master bedroom, the bathroom, the front closet, the kitchen and our entire basement to go. Shoes and jackets that have never been worn. Books that will never be reread. Bye-bye. Some of it will be painful, but we all realize it’s necessary. We’ve already filled more than 2 dozen boxes of stuff to sell. None of it is coming back in the house. If it doesn’t sell, we’re donating it.
More to come as we progress through the mountains of crap.
Side Hustle: The Garage Sale Preparation
We had a garage sale last week, as a wrap-up to the April 30 Day Project. We got rained out halfway through the first day of our 3-day sale, but we still managed to clear $1500. We held the sale in our neighbor’s garage because it had more space and better visibility.
Wednesday night, while carrying boxes over, I missed the step to their property from our driveway and crashed while carrying three boxes. That’s a twisted ankle and a bleeding knee. Naturally, while I’m hopping and swearing, everyone is concerned that I’m okay. The worry-warts. Anyway, it hurt, so we stopped setting up while we still had a few boxes left in the basement.
[ad name=”inlineleft”]Thursday morning, I decided to show them all. At 5:30AM, before anybody else is strongly considering the possibility of maybe thinking about getting ready to hit the snooze button, I decided to get the rest of the boxes ready. They’d all wake up, worried about how I’m feeling, asking if I’m to stiff to carry boxes. The best way to show them they don’t need to worry would be to have all of the boxes dealt with before they woke up. So I started. Up and down the stairs, with a stiff, twisted ankle, gloating to myself about how tough I was…BOOM, down the stairs. I was on my back, sliding down the stairs. I caught a stair-tread in the small of my back and another on the point of my tailbone. Mommy?
After I stopped twitching on the floor at the base of the stairs, I managed to get the last of the boxes ready. Instead of sympathy, I spent the rest of the weekend getting asked if I needed an inflatable doughnut to sit on. There are places I’d prefer not to have bruised.
Unpacking the boxes made me glad that everything was priced. We spent 6 weeks going through our entire house–every room, every dresser, every drawer–to eliminate the clutter. As something went into a box, it got priced, so we didn’t have to do it all at the last minute. That is the most important time-saving step for a garage sale. Price it as you pack it. You don’t want to waste hours pricing stuff while tripping over potential customers.
Another preparation tip to do early: Find tables! Ask around. You’d be surprised at who has a dozen folding tables collecting dust in his basement. It’s better to borrow that to rent. The best price I found was $17.50 to rent an 8′ X 30″ table for a week. We didn’t have to do that, but we thought we would have to. I borrowed a few, found a few, and built a few out of sawhorses.
The week before the sale, we placed an ad in the paper. When I placed the ad, the paper called to suggest we change it from running the weekend before to running just the days of the sale. I agreed, to a point, but their Sunday circulation is miles ahead of the weekday circulation, so why pay to run an ad nobody will see on Thursday? I ran it Sunday through Tuesday, because I wanted the Sunday ad and we got 3 consecutive days in the price. Did I actually know better than the paper’s sales-weasel? Who knows? I think I made the right decision.
The Sunday before the sale, I posted an ad on Craigslist. Interesting fact: little old ladies use Craiglist to plan their garage-sale adventures.
Two days before the sale, we made signs. Bright pink signs with brighter yellow starbursts. They were all simple. “Mega Sale! 8-5” followed by an arrow and our address. Simple, easy-to-read, and bright. The morning of the sale, after the ibuprofen kicked in, I put the signs up. When you make signs out of paper, always include a crossbar. It rained a lot the first day of the sale, so the signs wilted. The second morning, I went out with some duct tape and crossbars and fixed them all.
The day before the sale, we got cash and change. We had $50 in 1s and 5s and $25 in silver change. No pennies. Nothing was priced to make us need them.
The morning of the sale, we set up two canopy tents in the driveway and pulled the prepared-and-filled table out under them. We finished stacking as much as we could on the tables and called it “open”. There were a few boxes we couldn’t put out due to the rain. We simply ran our of room. At noon, $65 into the sale, we decided enough was enough and shut down–cold, wet, and miserable. Lunch and a nap made the day better.
Later, I’ll discuss the other parts of our successful sale.
Note: The entire series is contained in the Garage Sale Manual on the sidebar.
Update: This post has been included in the Money Hacks Carnival.
Buying on Craigslist
On Friday, I talked about selling safely on Craigslist. Today, I’m going to talk about buying safely and getting a good deal.
I love Craiglist. It’s safe to say I’m a fan. We’ve refurnished most of our house for 10-15% of retail by being patient and persistent there. We scored a $1200 oak entertainment center for $200, a beautiful oak headboard/storage thingy for $150, a nice china cabinet for $70 and much, much more. There are a lot of deals to be had, but you have to be careful.
I never buy anything without either a picture or a model number. Stock photos do not count. I want to see an actual picture of the actual item. With electronics, I want the model number so I can tell exactly what features it has. If I can’t positively identify the item, the seller gets an email. If I don’t know what it is, I’m not interested.
Once I have the item identified, it’s time to hit Amazon and Google for a quick price check. Acceptable prices vary, but I’m generally looking for 25% of retail for items that aren’t collectible or antique.
While it’s not a common occurrence for the things I buy, some sellers do lie. The technical term for this is “fraud”. Fraudulent sellers needs to be kicked in the shins. Before I go to actually see an item, I do enough research that I will hopefully be able to pick out a fraud or forgery. The easiest way to tell if the backstory is a lie? If you are given a backstory, it’s probably a lie. Never assume that the seller is telling the truth about the little old lady who only drove her TiVo to church on Thursdays in the summer and never went above channel 10. The story is always a lie. Check the condition yourself. Check the value yourself. If you can’t verify it, it isn’t true.
If you are buying tickets or documents, know what you are looking for to tell if it is a forgery. If you can’t tell, ask the seller to meet with someone you trust who can verify it. Ticketmaster tickets are laminated, so they glare slightly in the light. If you hold the tickets up to a strong light, the white parts will glow blue. Finally, if the ticket looks like it was printed at home, don’t trust it.
[ad name=”inlineleft”]A few months ago, a local couple was trying to buy a car on Craigslist. When they met the buyer, he took their cash and their car and left them on the sidewalk in an unfamiliar neighborhood. The moral of the story? Ride the bus. That, and always meet in a public, well-traveled spot.
If the seller suggest escrow, he’s probably actually the deposed ruler of Nigeria in need of someone to help him get his fortune safely out of the country. You should immediately give him your name, address, social security number, PIN, place of business, all of your bank accounts, and the kidneys of your first-born. He’ll hook you up. Really.
Don’t do that. On the internet, escrow=fraud, almost every time.
Rental fraud is an issue I have absolutely no experience with, but it’s common in places with a competitive housing market. The felonious candidates for extremely prejudiced termination will scan the real estate listings, and post some on Craigslist as a rental unit with a low-ball price. People get excited for the extreme deal, shut off their critical thinking skills, and hand their nest-egg over to someone they’ve never met so they can keep the scam from being snatched up by some sucker who’s just a little bit slower at dumping his wallet into a crowded room on con-artists. It’s a big decision, so take the time to research it and do it right. Find the ownership records and the owner. If you’re buying, get an actual realtor to help you. They are worth the money.
Tips for Buying Safely on Craigslist
Don’t wire money. Ever. If someone suggests that for an internet sale, ask for their address and send a leg-breaker their way. They are trying to steal from you.
Trust your gut. If something smells fishy, it probably is. Walk away.
Don’t ever give out personal information. Nevernevernever. Not your address, not your favorite flavor of chewing-cud, nothing. Keep it private.[ad name=”inlineright”]
Meet in a public place. Criminals tend to dislike witnesses, so go somewhere that has them by the score.
Bring a friend. I may be a bit of a chauvinist or over-protective, but my wife doesn’t bring money to go meet strangers on the internet without me. If your local laws allow it, consider bringing some form of protection with you.
Craigslist can save you a ton of money, but it brings some risk with it. Keep yourself safe.
