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Panic ensued at a Bank of America call center in Texas Thursday, as 144 staff were overcome with what was initially thought to be a carbon monoxide leak or a chemical weapons attacks. 34 people had to be taken to hosital. The symptoms included dizziness and being short of breath.
In the end, HAZMAT investigators believed that the chaos was caused by a female staffer spraying on a little too much perfume!
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Even though this is a spoof and very funny it makes me wonder if one day they may try this one. He he he…
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The harsh reality is that traders are always tense, constantly on their Blackberries (resulting in permanently hunched necks caused from Blackberry Syndrome), and can’t look away from the addictive devices for more than two minutes to talk to you. They smell like an old ash tray, and above all, are the most arrogant men on the planet (most of the time).
So does the money they potentially earn supersede these disturbing truths? Perhaps these girls don’t care about conversational ability as pound signs blur their money-eyed vision.
Then again, admittedly, traders do have their lure. When they are not in frenzied business mode, they can in fact be quite charming. Not in the traditional sense of the word, but in the ‘trader’ sense of the word.
There are two types of trader. One is loud, boisterous, and always the centre of attention. He’s your typical cheeky chappy, and most likely originated from Essex. If he wasn’t on the trading floor, I’m sure he wouldn’t be a world apart from the antics of Del Boy, trying to sell you something dodgy out the back of his truck, or hollering at you down the street from his market stall. You will find him on the FX Desk trading high volume with high risk. Just how he likes his women.
Then there is the other type. Smart, well-educated and subdued, this is a man who barely enters into a deal due to the deliberation and calculated risk that goes into each transaction. You will find him on the Structuring desk. He will pick his wife carefully to ensure she isn’t going to fleece him for every penny he’s got, and will probably enter into some kind of hedge arrangement (read: pre-nup). The decision will be well-thought-out and calculated, probably using some kind of financial model. He’ll weigh how much will the average spend will be on the monthly credit against how much would she try and take him to the cleaners for – and he won’t forget the all important probability analysis on whether she actually loves him or just his money.
Mr FX won’t care about this as long as you look hot.
Girls, don’t say you haven’t been warned.
Money management is a critical point that shows difference between winners and losers. It was proved that if 100 traders start trading using a system with 60% winning odds, only 5 traders will be in profit at the end of the year. In spite of the 60% winning odds 95% of traders will lose because of their poor money management. Money management is the most significant part of any trading system. Most of traders don’t understand how important it is.
It’s important to understand the concept of money management and understand the difference between it and trading decisions. Money management represents the amount of money you are going to put on one trade and the risk your going to accept for this trade.
There are different money management strategies. They all aim at preserving your balance from high risk exposure.
First of all, you should understand the following term Core equity
Core equity = Starting balance – Amount in open positions.
If you have a balance of 10,000$ and you enter a trade with 1,000$ then your core equity is 9,000$. If you enter another 1,000$ trade,your core equity will be 8,000$
It’s important to understand what’s meant by core equity since your money management will depend on this equity.
We will explain here one model of money management that has proved high anual return and limited risk. The standard account that we will be discussing is 100,000$ account with 20:1 leverage . Anyway,you can adapt this strategy to fit smaller or bigger trading accounts.
Money management strategy
Your risk per a trade should never exceed 3% per trade. It’s better to adjust your risk to 1% or 2%
We prefer a risk of 1% but if you are confident in your trading system then you can lever your risk up to 3%
1% risk of a 100,000$ account = 1,000$
You should adjust your stop loss so that you never lose more than 1,000$ per a single trade.
If you are a short term trader and you place your stop loss 50 pips below/above your entry point .
50 pips = 1,000$
1 pips = 20$
The size of your trade should be adjusted so that you risk 20$/pip. With 20:1 leverage,your trade size will be 200,000$
If the trade is stopped, you will lose 1,000$ which is 1% of your balance.
This trade will require 10,000$ = 10% of your balance.
If you are a long term trader and you place your stop loss 200 pips below/above your entry point.
200 pips = 1,000$
1 pip = 5$
The size of your trade should be adjusted so that you risk 5$/pip. With 20:1 leverage, your trade size will be 50,000$
If the trade is stopped, you will lose 1,000$ which is 1% of your balance.
This trade will require 2,500$ = 2.5% of your balance.
This’s just an example. Your trading balance and leverage provided by your broker may differ from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one trade. It’s a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident that his next trade will be winning and he may add more money to this trade. This’s how you can blow up your account in a short time! A disciplined trader should never let his emotions and greed control his decisions.
Diversification
Trading one currnecy pair will generate few entry signals. It would be better to diversify your trades between several currencies. If you have 100,000$ balance and you have open position with 10,000$ then your core equity is 90,000$. If you want to enter a second position then you should calculate 1% risk of your core equity not of your starting balance!. Itmeans that the second trade risk should never be more than 900$. If you want to enter a 3rd position and your core equity is 80,000$ then the risk per 3rd trade should not exceed 800$
It’s important that you diversify your prders between currencies that have low correlation.
For example, If you have long EUR/USD then you shouldn’t long GBP/USD since they have high correlation. If you have long EUR/USD and GBP/USD positions and risking 3% per trade then your risk is 6% since the trades will tend to end in same direction.
If you want to trade both EUR/USD and GBP/USD and your standard position size from your money management is 10,000$ (1% risk rule) then you can trade 5,000$ EUR/USD and 5,000$ GBP/USD. In this way,you will be risking 0.5% on each position.
The Martingale and anti-martingale strategy
It’s very important to understand these 2 strategies.
-Martingale rule = increasing your risk when losing !
This’s a startegy adopted by gamblers which claims that you should increase the size of you trades when losing. It’s applied in gambling in the following way Bet 10$,if you lose bet 20$,if you lose bet 40$,if you lose bet 80$,if you lose bet 160$..etc
This strategy assumes that after 4 or 5 losing trades,your chance to win is bigger so you should add more money to recover your loss! The truth is that the odds are same in spite of your previous loss! If you have 5 losses in a row ,still your odds for 6th bet 50:50! The same fatal mistake can be made by some novice traders. For example,if a trader started with a abalance of 10,000$ and after 4 losing trades (each is 1,000$) his balance is 6000$. The trader will think that he has higher chances of winning the 5th trade then he will increase ths size of his position 4 times to recover his loss. If he lose,his balance will be 2,000$!! He will never recover from 2,000$ to his startiing balance 10,000$. A disciplined trader should never use such gambling method unless he wants to lose his money in a short time.
-Anti-martingale rule = increase your risk when winning& decrease your risk when losing
It means that the trader should adjust the size of his positions according to his new gains or losses.
Example: Trader A starts with a balance of 10,000$. His standard trade size is 1,000$
After 6 months,his balance is 15,000$. He should adjust his trade size to 1,500$
Trader B starts with 10,000$.His standard trade size is 1,000$
After 6 months his balance is 8,000$. He should adjust his trade size to 800$
High return strategy
This strategy is for traders looking for higher return and still preserving their starting balance.
According to your money management rules,you should be risking 1% of you balance. If you start with 10,000$ and your trade size is 1,000$ (Risk 1%) After 1 year,your balance is 15,000$. Now you have your initial balance + 5,000$ profit. You can increase your potential profit by risking more from this profit while restricting your initial balance risk to 1%. For example,you can calcualte your trade in the following pattern:
1% risk 10,000$ (initial balance)+ 5% of 5,000$ (profit)
In this way,you will have more potential for higher returns and on the same time you are still risking 1% of your initial deposit.
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The trendline. A trendline is a main initial element for the price chart analysis. While the market moves in any direction not along a straight line but along a zigzag, the mutual placement of upper and bottom points of those zigzags permits to plot a line connecting the significant highs (peaks) or the significant lows (troughs) of an appropriate zigzag using technical tools of the computer program.
ZigZag indicator
To draw a trendline only two points are necessary and the third one is the contact point confirmation. On a bullish trend chart it should be drawn using troughs, on a bearish using peaks. The trendline and a line which is about parallel to it and drawn on the opposite side (through peaks on a bullish trend and through troughs on a bearish) form the trade channel. Both lines are then channel’s borders.
Trend Line Example
Lines of support and resistance. The upper and the bottom borders of trade channels are called accordingly support and resistance lines. The peaks represent the price levels at which the selling pressure exceeds the buying pressure. They are known as resistance levels. The troughs, on the other hand, represent the levels at which the selling pressure succumbs to the buying pressure. They are called support levels. In an uptrend, the consecutive support and resistance levels must exceed each other respectively. The reverse is true in a downtrend. Although minor exceptions are acceptable, these failures should be considered as warning signals for trend changing.
The significance of trends is a function of time and volume. The longer the prices bounce off the support and resistance levels, the more significant the trend becomes. Trading volume is also very important, especially at the critical support and resistance levels. When the currency bounces off these levels under heavy volume, the significance of the trend increases.
Channel
The importance of support and resistance levels goes beyond their original functions. If these levels are convincingly penetrated, they tend to turn into just the opposite. A firm support level, once it is penetrated on heavy volume, will likely turn into a strong resistance level. Conversely, a strong resistance turns into a firm support after being penetrated. In general, to evaluate the reliability (that is the possibility of a break) of the trade channel borders taking a decision to close or to save an existing position one should govern himself with following rules:
1. A channel is the more reliable the longer it exists. Hence, the solidity of very old channels (e.g. existing more than 1 year) decreased sharply.
2. A channel is the more reliable the more is his width.
3. The resistance may be broken if it is bounced on the background of a growing volume.
4. A steep channel is less reliable in compare to a gentle one.
5. The support may be broken independent on the volume.
About the Author
Tomas Anderson is the editor of www.go-see.info
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I just found this site. it is very interesting. I hope that you find it entertaining and informative.
RestoreTheRepublic.com | In this edition Gary Franchi presents a story about the momentum behind the new “Track and Tax” bill being tested in Iowa and considered in DC, where they will actually Track you with GPS and tax you based on where you drive. He also provides a deeper analysis of the PASS Act, explains the “bait and switch” and calls for Sen. Akaka and Janet Napolitano’s resignation. Gary is also joined in studio by Jeffrey Grupp the author of Corporatism: the Secret Government of the New World Order to explain what the New World Order is and what we can do to combat it.
posted by www.schweizforex.com and www.forextradingbank.com
Government by Goldman Sachs
Scam central
“The Financial Services Modernization Act.’
“The Commodity Futures Modernization Act.”
Goldman Sachs wrote them…
Clinton teed them up and Bush & Co. knocked them down the fairway.
Now Goldman owns the new president too.
The bankrupting of America (and the world) on the behalf of a handful of New York investment bankers.
Kleptocracy – government of the thieves, by the thieves, for the thieves.
Conversations host Harry Kreisler welcomes Harvard historian Niall Ferguson for a discussion of his new book, “The Ascent of Money: A Financial History of the World.” Drawing on insights from the biological sciences, Ferguson describes the rise and evolution of finance focusing on insurance, banks, and the bond market. Using the examples of housing and the U.S. China economic relationship, Ferguson demonstrates the way history can inform our understanding of the current financial crisis. He also reflects on the implications of the financial crisis for American global hegemony. Series: Conversations with History [12/2008] [Humanities] [Show ID: 15580]
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