Leveraging Your Investments for the Best Long-Term Results

Futures contracts are the most common form of trading in the commodities market. A certain percentage of the price, called a margin, is paid by the investor to lay claim to a specific contract that expires on a future date.

So, why are futures so popular in the world of commodity trading? Well, this is mainly because investing in the actual commodity will require physically possessing it and storing it, and finding a buyer to purchase it. Futures allow for paper investments in the same goods without these requirements, but also bring added risk to your portfolio.

This is where leverage comes in to play. Leverage is important for any investor, and some may require more than others. Futures contracts can be bought with only a percentage of the actual sale price, but allow for you to reap all of the profits. This allows you to use the bulk of available funds for alternate uses that are more important in the meantime.

As an investor, you can control the contract for a specific unit of a good with only 5% required of the price of the contract. The 5% is known as the ‘margin’, and will always depend on volatility, new regulations and other market factors.

For example, gold could be trading at $550 per Troy ounce (the standard unit of gold) on the Chicago Board of Trade. Your margin, or 5% of this amount, would total $27.50. If you want to purchase a future contract for 100 ounces of this gold, you may do so with only $2,750. In effect, you will own and control the entire $55,000 of gold via your commodity broker loaning you the remaining value of the units.

If the price of gold rises to $560 prior to your contract’s expiration date, you have experienced a $5 per ounce net return. This means that you profited $500 from your 100 ounces of gold, and earned a $500/$2750 = 18% return – not bad for a day’s work!

However, don’t forget that commodity prices experience new highs and lows on a daily basis at times, and this profit can just as easily become a loss that is devastating. Much research is required before participation in commodity trading, and you should understand the concepts well before calling your commodity broker to bet the bank on wheat this fall – make sure you understand exactly what it is you’re doing.

Futures contracts are so popular because they allow investors to profit from increasing prices of goods over time, according to their predictions. This type of commodity trading never requires you to take actual possession of the product, but you still profit from the sale of it.

These contracts affect virtually every area of consumer spending on a daily basis, and can easily lead to consistent short-term investment results with enough practice and patience. Leveraging your all-important cash for long-term investments or real product purchases allows you to still engage in the profitability of the market, but without needing to part with all of your cash in the meantime.

Tips to Save Money on Gifts

Now is as great a time as ever to reign in your expenses and save money to pay off debt or simply build up your emergency savings account. However, holidays, birthdays and life events will still happen during tough economic times, and it’s essential to learn how to save money on the many gifts you find yourself shopping for this year.

Preparing a budget and accounting for a certain dollar amount each month to go toward your ‘gift spending’ will help you to prevent spending too much money on gifts. The key is to actually stick to it, and refrain from last-minute spending when you should be saving money. Plan ahead and find some creative ways to find quality gifts for less online.

Internet sites such as Amazon and eBay offer every type of product available, at very reasonable prices. Not only are these products typically priced far below retail value, you’ll have a larger selection of unique items and save money on gas, too.

You may also look at Craigslist or search for smaller sites where dealers and individuals are selling handmade and even brand new items. Special collectibles and items that are ideal for a unique personality are also easily found in new or slightly used condition.

Also search for sites offering personalized gifts or custom made items that will offer a gift not soon forgotten. Today, there are several companies which specialize in these types of products, and may even offer discounts for bulk orders to give to your entire family.

Many craftsmen of various types are able to offer their products online without the high cost of maintaining a retail storefront. Although their items net a high profit per item for them, these gifts are still quite affordable for you without a middle man to pay.

Slightly used items may also be appropriate in certain cases, such as high-dollar fashion accessories or clothing, jewelry, collectibles and media. Several vendors online specialize in only offering the highest-quality used items, so search for a reputable site with a clearly stated return and refund policy.

Perhaps the best way to save money on gifts is to search not for simply something the recipient would want, but starting with high supply and low demand niche industries. After discovering products that are declining in price because they are last year’s model or not as popular as the manufacturer once thought, imagine whether your loved one would appreciate and use it.

The best way to save money on gifts is to spend the time in research and thought instead of dollars on the actual item. Plenty of deep discounts can be found on the Internet, saving you gas money and allowing you to shop from the comfort of your own home.

Consider what your loved one’s tastes and styles are like, and what they may enjoy but would never think of asking for. Are they a movie or sports buff? Perhaps a rare, independent movie or collectible sports magazine is just the right gift!

Saving Money on Your Monthly Electric Bill

Monthly expenses compose the largest part of our budgets, especially those for utility services. We can always count on these bills arriving very timely every month, and having to pay them within a few days or weeks to avoid paying late fees. Your electric bill can easily be lowered enough to save you 20 to 30 percent on your monthly and annual fees with a few new habits, allowing you to save money for more important expenses.

Electric heating or air-conditioning units use much of our energy when they are in use, and can easily make our bills skyrocket when not paid close attention to. Water heaters are next in line for providing the highest percentage of electricity costs, but additional measures can be taken to lower this usage, too.

Helpful tips for saving money on your electric bill include lowering the temperature on your electric water heater. Most of these tanks are kept at unnecessarily high temperatures that result in an electric power sponge.

These settings allow for you to get your much-needed hot water in seconds, but with a little patience a lowered temperature gauge can save you significant funds. If you only lower your water heater temperature by 5 to 10 degrees, you’ll notice a difference almost immediately. This is also a great advantage to homes with children when it comes to preventing scalding burns.

Another great money saving tip is to start washing all of your laundry, except those which are absolutely necessary, in cold water only. Invest in a special cold water detergent designed to get your clothes just as clean in lower temperatures, and enjoy a longer life and less shrinking! Also, consider air drying certain clothing items to reduce your electricity costs in running your dryer.

If you have rooms that are not used often, close the vents in those rooms and close the doors until it’s necessary to use them. Guest rooms may always apply here, but at night your kitchen and living areas aren’t being used, and during the day your bedrooms probably aren’t either. Don’t forget to keep the laundry room closed off, too.

Space heaters in these areas can be reduced to 50 degrees Fahrenheit when not in use. You may also invest in a programmable thermostat to automatically reduce the temperature at night or while away at work.

Perhaps the most involved but best long-term goal for saving money on electric bills in your home includes increasing your home’s insulating features. If you live in an older home, insulation was probably never even placed in your exterior walls. Your local hardware store carries insulation that can be blown into these walls and plugged in order to better your home’s insulation factor.

Saving money on electric bills will also be quickly noted with the replacement of old windows by double-paned, energy efficient versions. If you’re in the market for ideas for improvements to your home, you may also consider new appliances that don’t require near as much energy to continue to provide the same level of service.

Money Saving Ideas for Your TV, Phone and Internet Bills

Monthly expenses are the total or excess of our budget, and one of the easiest and painless ways to save money is finding ways to lower your monthly bills you know you’ll receive. In order to save money quickly in an emergency situation, you may need to eliminate your entertainment services and read a book or two temporarily. However, you should be able to avoid that situation by simply lowering them on a monthly basis to allow you to save for a rainy day.

When determining what company to employ for providing your television and Internet service, most of us are faced with the decision of going with either cable or satellite options. These are very different services that each offer different pros and cons, so we simply can’t directly make this decision on cost alone.

Depending on whether you use your Internet for pleasure or work, download and upload speeds may be the determining factor in your decision. However, too many customers are excited by extremely fast capabilities that in reality they never use; thus, end up paying a higher bill on a monthly basis for unneeded extras.

Satellite service may offer slightly slower download speeds, but also may offer lower prices. Unless you truly need to download large files in mere seconds, it’s probably best to simply hang on to your own money.

Saving money on phone bills is also easier now with the added reliability of cell phone service across the country. If you currently have both a land line and a cell phone, you may want to consider eliminating your land line entirely.

Don’t forget to actually sit down and calculate the difference in savings with increased use of cell phones either. If you feel you need to increase your cell phone plan to prevent unnecessary overage charges, it’s better to do this immediately and lower it in the future if you find it’s too much.

Television is the most common form of entertainment in America, and most of us spend way too much time in front of our beloved ‘boob tubes’. This is an easy area to start saving money by eliminating premium packages or movie channels and getting by with the bare minimum.

Most of these packages include hundreds of channels you never even watch; ask if you may only add the one or two premium channels you do watch on a regular basis to see if this is an option. Otherwise, scrap your current plan and discover new ways to entertain yourself.

Movies are easily found at a discount at several local and online rental stores such as Netflix. For a few dollars a month, you’ll be able to watch unlimited movies whenever you choose without paying a late fee for this service.

You may also find that your Internet provider offers streaming live television or certain radio stations via your connection that will also save you money on your monthly television bills. Simply ask your friendly customer representatives what they can do to help you save money – you certainly won’t be the first to ask.

Using Margin Calls to Your Advantage

There is a lot of money to be made in Forex trading, but unfortunately just as much can be lost. You’ve heard the technical garb about margin calls, moving averages and graphs, and understand it’s important to understand what the market’s doing whether you have a broker or perform your trades yourself.

Hundreds, even thousands of dollars can be made in a few minutes or hours if you know what you’re doing. First, remember that most of your trades will require quite a large margin in order to create your desired profits. The more money you utilize in Forex trading, the more those small differences in currency exchange rates become profitable.

If you have a broker that offers a 1% margin, which is quite common, this means you need to front this 1% of your total investment, and borrow the other 99% form your broker. Now, when you invest $100,000 total, with $1,000 margin, let’s say your current rates increase enough to sell at a total profit of $650. Just because you only put up 1% of the money doesn’t mean you only get to keep $6.50; the entire amount goes to your pocket.

However, let’s assume the worst for a moment so it’s possible for you to understand the seriousness of the Forex market trading world. Let’s say you make the same margin call, speculating that your currency exchange rate will increase. Instead, it begins to fall slightly, and the broker is not convinced it will recover. Perhaps he knows nothing of your personal situation, and decides to cut his losses short. He sells your yen and declares a loss on your behalf.

A Forex broker can execute this call legally and ethically, without your prior permission; it is totally dependant upon his judgment of the situation. This action would leave you indebted to your broker for the amount he lost in the margin call.

This is why it’s so important to establish a good relationship with your broker, and instill confidence that you are credit worthy. Understand your Forex broker’s margin call policy, and READ THE FINE PRINT before signing anything. You broker is entrusted with your investment, yes; but he is also in the business of making money, and with 1:100 margin calls in the Forex market, he has to cover his end and watch out for his own interests. Unfortunately, this probably means you’re stuck in a losing situation.

There are several advantages to using a Forex broker, specifically the ability to perform these duties on your behalf while you’re doing more important things at the moment. However, this possible scenario speaks to how important it is for you to understand the Forex market you’re involved in and the general direction of the market.

Try doing nothing but studying the currency exchange rates for at least a month or two before jumping in with your own money. Place pretend calls and wait to see if your predicted movement will happen. Just like anything else in life, with practice you’ll be almost perfect, readying you for the added risk of engaging in margin calls.

Understanding Your Forex Broker’s Spreads and Fees

If you’re a beginner investor, there is a lot you should learn before becoming involved in the Forex market. You may have heard or read somewhere that Forex brokers don’t charge a commission, and this bit of information has you interested in switching your investment vehicles after paying hefty sums to your portfolio manager. This isn’t the entire story, however. There are still fees which need to be paid in the world of Forex – especially to the person making a living performing your trades for you!

Instead of charging a commission with each trade, Forex brokers will charge what is called a ‘spread’, which is exclusive to trades performed on the currency exchange rate market.

Market makers are the individual or company who is offering a currency pair for trade, and a broker acts as the middle man between them and you. Bid prices are what the market maker is offering the currency at, and the ask price is what your broker will sell it to you for.

This difference is how Forex brokers make a living. Now, let’s discuss other costs you may incur while engaging in Forex trades.

When you place an order to buy a currency pair, for example the euro/dollar, you are essentially buying euros, assuming they will be worth more in dollars with time (usually a very short amount of time). Most of these transactions are performed in lots of 100,000, which would require you to buy 100,000 euros – not very affordable to most, and even laughable by seasoned veterans.

Your brokerage firm has another option that can solve this dilemma. They will leverage your buy at a 100:1 ratio, where you front 1% of the price and they will ‘loan’ the other 99%. This allows you to actually invest a very small amount of money and can still reap large rewards if you buy and sell at the correct times.

However, this means that if you don’t time your sell just right, or if you buy too high, you will most likely lose your entire personal investment, as well as owe your Forex broker their share of the loss. This is why practicing and starting small is so important!

You should feel like you can explain Forex trading to someone that knows nothing about it prior to entering the practice of buying and selling there. This market is far more volatile and requires quick decisions and a broker you can trust before benefiting from the activity.

Movements of only a few pips can translate to extremely large sums of money when you’re talking about a 100k account. One pip means the exchange rate changes only by a ten-thousandth of a point. This seems quite small until you multiply that by 100,000!

To reduce your risk and make you more comfortable, perhaps you should inquire about or find a Forex broker who offers a mini account. Of course, small changes will affect this account more, but you risk losing and owing less, too.

Understanding Line Graphs, Bar and Candlestick Charts in the World of Forex Trading

There are several options for investments today, and Forex trading is fast growing in popularity. Several tools are available for even the most advanced investor in order to research current market trends, or even learn the basics when getting started. Forex trading software and currency exchange rates are one thing, but you must also understand the basics of any type of graph or chart with just a glance to be successful in this world.

The good news is that using standard information included in these charts and graphs is usually easily accessible on any Forex online trading system. Monitoring prices and taking note of current trends can prevent any major mishaps, as well as help to determine your next proactive move.

Just as with standard market trading, line graphs can be extremely useful in the Forex market world. With a mere glance, these graphs outline current prices and historical trends with a visually recognized pattern. However, you must understand the fundamental difference between the standard and Forex markets – the definition of ‘price’ is completely different.

These Forex prices are expressed as a pair of two different currencies, for example the dollar and yen. If the yen/dollar price quote is 1.34 27/32, this means that $1.3432 will buy you one yen, and you would receive $1.3427 for each yen converted to a dollar.

The calculations used to determine the movement of these prices and convert them to a visual tool requires technical analysis using statistical techniques and historical information to determine likely directions for the future.

One of these technical tools may be an average of price calculated over a specified period of time. If you take the current price and compare it to the price one hour ago and one hour from now, you’ll be on your way to arriving at this number. The average price over 24 hours needs to be tracked every hour for 24 hours before summing them up and dividing by 24.

This average price in a day could also be implemented into a line graph. If you repeat this process for 30 days, you’ll have a line graph showing the movement of the average Forex trading price of that currency exchange, or a 30-day moving average.

Many investors use this line to determine what calls should be used in the next trades; if the price falls below it, it’s time to buy. If it rises above, it’s time to sell.

In Forex trades, it’s also possible to track a variety of other indicators such as averages within an hour or between minutes. It’s not necessary to understand the calculations involved, per se, but the differences between these separate line graphs can give an indication as to where your exchange is headed.

Bar and candlestick charts are a great way to research actual, and not average, prices over a specified period of time. It may be helpful, especially if you’re a new investor, to read an educational book or take an online course in reading and understanding the information in these charts – it will certainly pay off many times over in the future!

Understanding Forex Signals to Use as Trading Tools

If you’re new to the world of Forex trading, you already know that fluctuations in these types of markets are the most volatile and unpredictable available. In fact, many seasoned investors aren’t able to handle the extreme lows and drastic highs that can reverse at any second. However, there are a few signals that can clue you in on your possible next move to prevent any drastic losses in your next trading session.

These signals in the Forex markets can be used as buy and sell indications, derived through very technical analysis. Don’t be discouraged, though – with a little practice, even a novice can learn to recognize these signs.

Using historical price and volume data can provide a mathematical and statistical trend, and as everyone knows, history is bound to repeat itself. This is also true with Forex trading! Using these analyses can help you determine where the market is likely to go, and what your next call should be and when to place it.

Analytic companies can be found everywhere, and many will offer to send you texts or emails warning of upcoming call signals. These messages could just tell you to buy yen at a certain value, or if you’re using software or a website, it could be flashing color-coded signals to you.

One of the indicators used commonly to derive these signals is the Moving Average Convergence/Divergence, or MACD. Just like it sounds, the moving average, or changes in price over a specified period of time, will cross a pre-determined threshold – this tells you to either buy or sell at that specific moment.

You may also enter orders for certain signals in order to prevent you from having to sit in front of the computer screen all day. If you want to sell euros at 1.20, you enter this information, and leave to do whatever you need to. If your call threshold is met while you’re away, the currency trade is performed on your behalf.

Any type of Forex trading tool is created to help the wise investor to avoid drastic losses that can be life-altering. This means that even if you have the option to perform automatic calls, this should never be relied on for regular Forex trading purposes. You need to stay informed, educated and behave appropriately in order to cruise through the highs and lows of the world of currency trading.

Signal software and services do make deriving the information you need to know from standard charts much easier, and provide you with a wealth of information with a mere glance. Just as with any other convenience product available, these systems come at a price.

Most will range from $50 to $250 per month, depending upon your level of membership. Others may charge $500 to $3000 to purchase the software outright, but you don’t have any monthly charges after that. Determine which signal methods will fit your needs best, and invest wisely; these tools do come with a charge, but you know the old saying – “You have to spend money to make money!”

Technical Indicators of the Forex Market

If you’re trying to delve into the world of Forex trading, you’ve already seen the intimidating charts and graphs that can seem to make the entire process more stressful than necessary. There are a few technical indicators, arrived at through algorithms and mathematical formulas, to help you make sense of all of the information before you.

These calculations are performed for you by virtually any Forex trading software, but you should have a basic understanding of what they mean to your buy and sell actions and inherent risk in the Forex market.

All of these technical indicators should be used together in order to arrive at your own conclusions. Keep in mind there is no certain indicator that will provide a black-and-white signal for you, but you can arrive at the most likely pattern forming and thus future behavior with them.

Moving averages are charted to show you a line graph that is moving to indicate if the currency pair you’re considering is in a general up or down pattern. These averages will change over time, so they constantly need to be updated and revisited. Usually, you’ll notice calculations of a Simple Moving Average (SMA) or Exponential Moving Average (EMA).

SMA is calculated as the average of prices at certain intervals of time, which could be hourly or daily. EMA actually assigns weights to different prices, determining some to be more relevant to current trends than others. EMA calculations usually place more weight on the most current prices, and less on the older ones.

These moving averages can indicate a buy signal if the current price rises above them, indicating an upward trend. When the price falls below this line, it indicates a selling position and falling market.

Bollinger bands are extremely complicated in the way they are arrived at, but will help to arrive at predictions about the current volatility of the Forex market. Calculated as a standard deviation from the moving averages, a wider Bollinger band indicates higher volatility, and a narrow one means less so. Usually, prices will fall within the two lines of the bands; if price moves outside of them, it is likely the current Forex market trend will continue, but if they stay within, a sharp price change can typically be expected.

When price is above the moving average and very near the upper Bollinger band, this is considered a sell signal. Conversely, investors are encouraged to buy when price is moving toward the lower band.

The RSI, or Relative Strength Index, is a value from 1 to 100 that serves as an indication of whether a currency pair is being oversold or overbought. Think of your elementary lessons of supply and demand here – an RSI of 70 indicates overbuying, and the pair is due for a price reversal. An RSI of 30 indicates it is oversold, and demand is down.

Study these technical indicators to help you along the way in your Forex trades, and you’ll notice a great change in the consistency of your results!

Pivot Points Can Reveal Opportunities to Buy and Sell

‘Pivot points’ are a technical indicator used in Forex trading that have become very popular due to their sheer simplicity. Every trader should become familiar with them, and determine how they can best fit into the overall strategy employed in the Forex markets.

Other available indicators, including moving averages and parabolic SAR are very technical and require some level of intense understanding of mathematics. Full understanding of these traditional indicators is usually only possible with the practice of actually calculating them at some point.

Pivot points, on the other hand, can be calculated by anyone with a third-grade education. The formula is as follows: Pivot Point = (H+L+C)/3. C is the currency pair closing price, H is the high for the previous day, and L is the low. This formula arrives at the average of these three data points.

Since the Forex market is always trading 24 hours a day, C is typically recorded at the time that New York’s market closes at 4 p.m. EST. Other points, called resistance and support, can be calculated to be used in conjunction with pivot points.

The pivot point may be determined to be the price of support or resistance, used in these calculations. This determination all depends upon whether recent price movements are headed up or down. Some investors may simply rely on the closing price from the day prior to base the support or resistance calculation on.

There are two resistance points and two support points, one each for the low and high for the day, and the low and high of the pivot point. The first resistance level is found by: (P x 2) – L, where P= the pivot point and L= the low from the previous day. Next, calculate the first support level with : (P x 2) – H, where H= the high from the previous days.

Now, take the first resistance (R1) and support (S1) points to find the second with the following formulas: R2 = P + (R1-S1), and S2 = P – (R1-S1).

How do you use these calculations in your daily Forex trading? It’s pretty simple. If the price goes over the pivot point, the Forex market is more bullish, and if it falls below, it is more bearish. When the price rises above the pivot point, this number serves as a resistance, and when it falls below it is a support point.

These pivot points may also be used to determine when you will enter or exit the Forex market. Buy and sell orders are very tricky with the currency exchange rates, but can be simplified somewhat with the use of these calculations.

Buy points may be considered when the price of a specific currency rate breaks through a point of resistance, and sell orders might be placed if the price falls below a support point.

Practice using these calculations for at least a month before attempting to use pivot points in your strategies that involve real money – this will ensure you understand them completely!