From philosopher to multimillionaire

September 5th, 2012

George Soros: “I always had a strong feeling that I am an exceptional person.”

Is it possible that an ordinary trader can have an influence on the economic climate of the whole country? Trader can do anything he dares! This is the philosophy of a quite modest Gorge Soros who became immodestly well-off on Forex and went down in history of the international exchange market as “the man who broke the Bank of England.” A famous combination with the British pound made him prominent all over the world. The genius deal helped Soros to make the way from philosopher to millionaire just in some weeks.

George Soros is a son of Hungarian immigrants of Jewish background. His mother, Elizabeth Sutz came from a well-off family, while Soros’ father, Tivadar Shvartz, was not so reach but had an extraordinary mind and outstanding personality. That was a man, who went to the front on his own accord as he “did not want to lose such opportunity”, but not because of true or artificial patriotic feelings. Probably, Soros inherited his extraordinary mind, bravery and thirst for risk and interesting life from his father.

Black Wednesday – that is how was called the day of September 16, 1992. After a successful currency speculation deal, a 42-year old fantasist posed a threat to economic situation in the Great Britain. Having opened a short position for pound sterling totaling more than 10 bn US dollars, Soros earned more than 1.1 bn dollars in a day! He lost a lot during his trading career but the luck went with him. Soros’ strategy can be called a bearish one as he was selling shorts. Soros is ambiguous and contradictory person who does not favor long term investments: all his deals are of short and of speculative nature.

Being a financier by profession, Soros had passion for philosophy and even developed a theory based on the ideas of Karl Popper. It was called Theory of Reflexivity and posited that currency value is formed due to its expectations and one can put a pressure on them. However, Soros appeals to intuition and tries to develop with the help of hypnotizers. Despite a huge working experience on currency market, successful trader admits that he is still emotional about both bad and good deals. But he does not advise to give way to emotions.

Three years of economics school, internship in London Arbitrage, attempts to earn on investments and, finally, worthy life of a millionaire who can afford writing books and sharing experience, doing charitable work and even participating in the political life of the country. All this is the American dream as it is and the life of the most successful trader in Forex history George Soros.

September 3rd, 2012

Forex Horoscope for August 03.09 – 09.09, 2012

Aries (March 21 – April 19)

For Aries it is better to concentrate on trading in the beginning of the week than discuss it with other traders. On Monday and Tuesday silence tactics will bring you a significant profit. To preserve the gain, substitute silence for inactivity on Friday.

Taurus (April 20 – May 20)

If you are pragmatic Taurus, relaxation and spending time with friends may be good for your wallet. Informal communication will open new frontiers for trading, as well as help to learn about nonstandard trading strategies and grasp the market laws. Do not hurry to test your theory on practice, take some time till the next week to think over the information received.

Gemini (May 21 – June 21)

People in trouble are left to themselves. Gemini will have to do their best to survive the gale of stock market in the beginning of the week and stay afloat. The Promised Land will appear on the horizon on Wednesday, but Gemini will be able to feel ground under their feet only on Friday given that they work hard.

Cancer (June 22 – July 22)

For Cancer the mantra of this week is: “work, work, and work again”. Forex will demand dedication and involvement from you. The worst day for trading karma is Wednesday as you will have to try uncomfortable asana. Trading nirvana will be achieved on Friday.

Leo (July 23 – August 22)

The importance of being earnest will be of much importance for Leos this week. Inattention towards the details and natural lack of care may result in huge losses. It is good that inborn quick wit and imagination are always to your service.

Virgo (August 23 – September 22)

When the door is closed, the window opens. On Monday Virgos may lose but on Tuesday they will find a way to restore their financial stability. Unforeseen change of strategy and trading style, use of indicators or even trading platform – all this will positively contribute to your budget.

Libra (September 23 – October 23)

Yield curve for Libras will remind of sine wave. Monday losses will give a way to small profit on Wednesday which will hardly offset Friday’s damages. Unfortunately, it will be possible to change trigonometric function into linear one only during the next week.

Scorpio (October 24 – November 22)

Scorpios, like equilibrists, are on a shoestring above the bankruptcy. Utmost concentration, patience and coolness will help to close deals with the maximum profit. The main thing is not to look down but think of how reach the end of the week.

Sagittarius (November 23 – December 21)

Sagittarius will have to come down to earth. You spend more that earn. Try to avoid any losses and find new opportunities for earning. Work hard to reach the sun as Icarus did.

Capricorn (December 22 – January 19)

Capricorns, just stay calm! Losses happen on Forex and damages of Monday and Tuesday will not affect your financial prosperity. You are a first-class trader in the prime of your life and your trading session on Thursday and Friday will be the best evidence of this.

Aquarius (January 20 – February 18)

Aquariuses lost in the thicket of Forex market should look for a trail of bread crumbs. Practical pieces of advice from other traders on Thursday or Friday may increase your deposit. But be sure to choose the right adviser.

Pisces (February 19 – March 20)

Per Monday’s aspera ad Friday’s astra. For Pisces the beginning of the week will be marked with unsuccessful deals but they will manage to take the right course on Wednesday. Thursday’s and Friday’s flight in free space of currency market will be profitable for you.

Economics 101 – Import and Export

August 31st, 2012
Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.
Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.
In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact  on the key growth expectation. If there’s a increase in the export then the US dollar rate will  increase. But if the import increases then the rate will decrease.
Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.
Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.

Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.

In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact on the key growth expectation. If there’s a increase in the export then the US dollar rate will increase. But if the import increases then the rate will decrease.

Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.

Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Stephen Stevenson

Eurozone’s Unwitting Executioner

August 31st, 2012

While Eurozone leaders are desperately trying to breathe new life into Greece’s junk economy plugging the leak with massive loans, the real threat to the euro is swelling in the North. It bears the name of Finland. The point is that the Land of Thousands Lakes expressed readiness to leave the Eurozone in case Spain’s and Italy’s debt crises exacerbate. They say better lost than found, but there is something which makes this saying misfit the situation. The point is that Finland is the only country with the AAA credit rating in the entire euro area. The Finnish economy has been commonly recognized as the most stable and competitive in the world for five years already. Apparently, it goes without saying that Finland would be a painful loss for the currency bloc. However, at a closer look, the stance of the Finnish government does make sense. Finland toils not only for itself, but for at least two other states, if not three. Greece’s cry for help was followed by that of Spain; now Italy is just about to queue up for a bailout. Moreover, eurosceptical Sweden and Norway neighbouring Finland state that a non-euro economy tends to develop faster. In addition, Finland’s main importers and raw material supplies are non-Eurozone countries, so leaving the currency bloc will hardly affect the economy of Finland. What is more, the Finnish government will be able to save the money which is now pouring into the economies of Greece and Spain in exchange for debt obligations of very doubtful liquidity. Finnish Finance Minister Jutta Urpilainen said, “Finland will not hang itself to the euro at any cost and we are prepared for all scenarios”. She also added that Finland will not pay for others. Minister for Foreign Affairs of Finland Erkki Tuomioja announced that the country has a plan to follow in case the euro collapses. It should be reminded that Finland signed a deal on securing collateral in exchange for its commitment to Greece’s second bailout. If saving the euro requires sharing the debt burden, Finland may well impede this scheme. And yet, this scenario seems to be unlikely with the Finnish Parliament growing increasingly determined to exit the euro area. Experts and economic observers have even introduced a new term for it — Fixit (Finland exit). Fixit is much more likely to happen than Grexit (Greece exit). It is not hypotheses or conflicts among Finnish political parties that make the likelihood of Fixit so clear, but real data. According to the IMF, next year the overall Eurozone debt will peak at 91% of GDP, while that of Finland will only equal 53% of GDP, which is the lowest level of debt except for Estonia and Luxembourg. Finland’s contribution to financing the debts of troubled countries is the same as Germany’s support. But being the Eurozone thought leader, the German government knows what it pays for and objectives it pursues, whereas Finland acts more like a benevolent patron backing its poor cousins and getting nothing from them but stocks of barely alive banks. Germany fully understands it and does its best to come to an arrangement with Finland. However, reaching any agreement appears to be a challenge, as Finland needs indemnity such as assets or shares in certain economic sectors of its half-live dependants. There is a risk that the “deal of the century” will span for a really long time, right up to the point when the Netherlands will also feel like joining it, which will not benefit Germany. So, it is highly possible that Germany’s sluggishness will lead to a partial or full Eurozone collapse, rather than to any fruitful arrangement.

Stock Market and Forex. Find 5 differences

August 29th, 2012

As all processes in the world economy are closely interlinked, it is not a good idea to consider Forex market separately from other ones. Any changes on the currency market can have great influence on currency quotes. That is why it is important to know peculiarities of their interaction, common and distinctive features.
Today we are going to compare both currency and stock markets. Recall that the trading instruments of the stock market are securities – shares, bonds, derivatives (warrants, futures, and options), savings accounts and certificates of deposit (CDs), and promissory notes.

Two markets are compared by the following parameters:

1. Participants

The main difference of stock market is that the buyer and seller must find each other. This is complicated by the fact that the liquidity on the stock market is much lower than on Forex, so the probability of losses increases markedly. After all, if a trader would not find a buyer for shares in time, they will drop significantly in price.

2. Locations of Trade

Unlike Forex, which has no spatial restriction, trading on stock market takes place only on stock exchanges. Due to their locations in various spots around the world, share price on different stock exchanges can differ. So there is arbitrage with securities bought on one exchange and sold on another one. Forex market does not have such option. In fact, there is no need as Forex does not provide central location where trading takes place.

3. Features of Deals

Stock market operates on the principle: buy cheaper – sell more expensive. On the contrary, Forex trading focuses either on currency rise or fall.

4. Leverage

Margin Trading is available only on Forex. Whereas you can buy or sell on stock market using only the amount of money you have.

5. Working Time Limits

You can trade on Forex 24/7, while stock market has its opening and closing time.

Stock market surely has a number of its advantages. They are, for example, dividends and the right to manage companies, coupon payments on bonds, and redemption of government securities. Therefore, it is you to choose your market according to your own interests, goals and objectives.