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Creating Profitable Forex Trading Systems in Five Easy Steps(1)

Creating Profitable Forex Trading Systems in Five Easy Steps

One rule of thumb that every aspiring entrepreneur should remember is that to make huge profits, you should know how to do it by yourself—and not rely on other’s efforts. Being independent from other people will help you determine what things are best for your business.

Such rule applies on all types of investments, including foreign currency trading, or mostly known as Forex trading. It cannot be denied that Forex is the largest existing market around the world, which is estimated to have an excess of 2 trillion U.S. dollars worth of foreign currencies are traded each day. It is larger than the magnitude of the New York Stock Exchange, which is approximately 50 billion U.S. dollars. Thus, Forex market exceeds all combined equity markets around the world.

With such huge wealth circulating around the Forex market, one of your financial goals is to grab a major slice of that $2 trillion average daily turnover in the market. How you will be able to get a substantial portion of that average turnover if you do not know how you will handle your Forex business? Although you cannot live in the market alone (you need business partners and/or financial advisers to help you along), only you can determine what the best Forex business there is for you.

To get huge profits out of your Forex trading career, you need to build your own profitable system—a trading system that will bring your not just hundreds but thousands of dollars worth of Forex revenues. Such trading system is available on the market, but as previously mentioned, you need to be independent—and you need to have your own Forex trading system that will help you achieve your financial goals.

For new traders, it is difficult for them to device their own trading system since they do not have too much knowledge about the Forex market. However, even a neophyte trader can device a trading system that will fit on his personal preference and needs—in just five easy steps!

Before we discuss the five easy steps towards a profitable Forex trading system, you need to learn first the three main characteristics of a successful Forex trading system. These are as follows:

1. A successful Forex trading system is simple. There is no need for a complicated trading system with too many rules. It is a proven truth that simple systems work better than complicated ones, and they have higher chances of success despite of the “brutal” characteristic of Forex trading.

2. A successful Forex trading system cuts losses and runs profits. Keep in mind that you need a trading system that gets the huge possible profits and eliminates losses quickly, if not instantly.

3. A successful Forex trading system follows long-term trends. You will never cover your losses if you are just generating small profits. Keep in mind that the Forex market is worth $2 trillion U.S. dollars, thus there is no point in trading in exchange for just small profits if you have the opportunity to make trades for larger revenues. Focus on long-term trends and you will be able to see better results.

Now, here are the five easy steps in building a profitable Forex trading system:

1. As previously mentioned, your trading system must be as simple as possible. Integrate few yet essential rules and an extensive investment management system.

2. Always look for long-term trends (preferably on a weekly basis), then shift to daily charts and to time entry. This will help you analyze market trends efficiently.

3. The ideal way of trading foreign currencies is through breakout method.

4. Always watch for any break that you will note on your chart, which is commonly confirmed by stochastic crossed with bearish divergence. This will be your great timing tool whether you will enter a certain deal or not.

5. You must integrate effective time management within your system. Time is gold and is one of your precious resources. Design a trading system that is time efficient—where you can maximize the potential of your time resources to generate huge profits.

Get away with complicated systems; it will just ruin your entire Forex trading career. Build a simpler one and see for yourself how profitable it is.

Loan cover watch out for Payment Protection Sharks

Loan cover – watch out for Payment Protection Sharks

The Financial Services Authority (FSA) has been investigating the way Payment Protection Insurance is being sold by loan providers which include some of the UK's biggest banks and building societies. And it's big business. Sales of PPI as it's called, earn lenders more than Ј1billion a year.

PPI is designed to protect borrowers by paying monthly loan repayment in the event that the borrower becomes unemployed or unable to work though accident or illness. Many lenders sell the insurance alongside the loan with around 50% of customers agreeing to the insurance.

However, according to the Department of Trade & Industry, only 4% claim and of these claims 25% are rejected. This may be partially explained by the FSA's investigation which found that around half of the lenders surveyed failed to explain the details and exclusions to customers or make sure the insurance was suitable for the clients. Whilst the investigation reportedly does not find that lenders are compulsorily selling the insurance, it was frequently automatically added to loan quotations without it being disclosed that the insurance was, in fact, optional.

Even worse, some lenders are failing to point out to borrowers that the cost of the insurance for the full period of the loan, was being added as a lump sum at the outset rather than being paid as a monthly premium. This means that the borrower cannot cancel the insurance without redeeming the entire loan and renegotiating a new loan.

And hey, some of these lenders certainly know how to charge for PPI. According to Simon Burgess, Managing Director of British Insurance Ltd, one of the big high street banks typically charge Ј30 per Ј100 of loan insured. This, he says, compares with between Ј4 and Ј6 if bought separately on the internet. This view is supported by price comparison service uSwitch which says taking out PPI with banks can increase the amount you pay for cover by nearly 500%.

Take an example. Last year a high street bank was charging Ј5,150 for PPI to cover a loan of Ј16,000. The cost of PPI was then added to the loan making Ј21,150 as the total capital repayable and interest charged on the lot. This meant that of the Ј300 monthly repayment, about Ј70 represented the cost of the insurance. Equivalent insurance can be bought on the Internet for around Ј20 per month and cancellable at any time without penalty.

So what are the lessons?

If your lender offers you PPI cover ask for the monthly premium with and without PPI. That way you can see the true cost of PPI.

Find out whether PPI is added to the loan as an initial lump sum. If it is back off!

Shop around for competitive quotes. A search on the Internet for “Payment Protection Insurance” or “Income Protection Insurance” will find you lots of web sites to try.

Check out the conditions on the insurance. Particularly check out the exclusions which invalidate a claim. For example, some policies stipulate that you must have been working continuously for 6 months prior to a claim for a minimum of 20 hours a week. Seasonal or temporary work is usually excluded. When you take the insurance out you must be in good health and know of no impending disability and not be aware that you could become unemployed. Could these exclusions apply to you? If so, the insurance will be of no use to you.

Please don't waste your money. PPI insurance is a good idea so long as it is cheap and on a monthly cancellable contract. After all your circumstances may change. Then check the policy's exclusions to make sure that the insurance is valid for your personal circumstances.