How to Deal with Success in Investing

By Sam McNeill

What follows is a true story. A US University completed an experiment to learn more about the psychology around the subject of success. Subsequent to the initial experiment, similar experiments have been repeated many times at different places and by many different people.

The experiment is straight forward. It asked people to guess the outcome of tossing a coin. The outcomes are either heads or tails and you guess the outcome and then you are either right or wrong.

Let me ask you a question, if the coin were tossed 500 times how many times would you expect to guess the outcome correctly? That's right around 250 times or 50% of the time. It doesn't matter how clever you are or hard you concentrate the outcome is determined by the laws of probability. Just about everyone understands this and knows it.

However, within the 500 tosses you will have a good chance of stringing together a number of tosses in a row that you will guess correctly. This is where the psychology of success comes into effect. The experiment asked it's subjects how they felt about their performance in tossing the coin and guessing the correct outcome at various times during the experiment.

What they found was that when people were having successful runs - four or five or six correct guesses in a row - that they believed that they themselves were responsible for this success. Reasons ranged from, I am getting better at this, to I am now concentrating harder and that is improving my performance.

Remebering that the experiment subjects were fully aware of the law of probability at work in the experiment, with a likelihood of 50% of the outcomes being correct and 50% of the outcomes being incorrect, but believed that their talent and/or ability was attributing to their success. Quite disturbing in its contradiction.

Yet this happens with people investing in the stock market all the time - especially people new to investing and trading. After a winning trade or two or three, the investor or trader begins to believe that they have a special "talent" for stocks and shares. They begin to believe that they are naturally better than the average trader.

The way to manage chance success in your trading/investing is to not become over confident and forget your risk management strategies. Enjoy your success but don't forget the risks. If you do not manage the risk of future trades properly or take on too many trades and over-extend yourself then you may leave yourself volunerable to the Market Slap. The stock market has a habit of slapping down traders who become over confident and take on too much risk with a large loss.

So remember, every trade you take has risk which you need to manage. If you manage your risks and enjoy the chance string of winning trades from time-to-time you will be successful and you will avoid the Market Slap! - 23309

About the Author:

Looking to find the best share trading course, then visit Just Shares to find the best advice on how to trade shares and share trading education.

British Pound Profile (Part II)

By Ahmad Hassam

Despite the independence of the Bank of England (BOE), its monetary policy is dictated by the inflation target set by the Treasury Chancellor. BOE has the power to change interest rates to levels that it believes will allow it to meet this target.

MPC meetings are held on a monthly basis and are closely followed by changes in the monetary policy including changes in the interest rates. The Monetary Policy Committee (MPC) meetings are closely followed by the professional forex traders all over the world as GBP is a highly popular currency among the traders.

After each MPC meeting, MPC issues statements. These statements are very important for GBP traders. A Quarterly Inflation Report detailing the MPCs forecasts for the next two years of growth and inflation and its justification for its policy movements is also published.

The Quarterly Bulletin is another publication. It provides information for the past monetary policy movements and analysis of international economic scene and its impact on the British economy. All of these reports are highly informative for professional forex traders who trade GBP heavily.

Bank repo rate is the overnight lending rate that the banks charge each other. Bank repo rate is the key rate used in the monetary policy to achieve the Treasurys target inflation rate. The main policy tools used by MPC and BOE are the Bank Repo Rate and the Open Market Operations.

Bank repo rate is set by the BOE for its own operations in the market such as the short term lending activities. Changes to this rate affect the commercial banks interest rates for its savers and borrowers.

When the economy is overheating, the central bank tries to cool it down by increasing the interest rte. An increase in the Bank Repo Rate means BOE wants to curb the inflation. A When the economy slumps into a recession just like what has happened currently, the central banks will try to lower interest rates to promote more economic activity so that the economy starts expanding again. Decrease in the interest rate would be to stimulate growth and expansion. Changes in the bank repo rate changes the commercial interest rates. In turn these commercial interest rates will affect spending and output in the economy and eventually the costs and prices.

Open market operations means buying or selling of government securities in the open market. Open market operations are done by the BOE to achieve its targeted bank rep rate. While assuring adequate liquidity in the market and continued stability in the banking system, the goal of the open market operations is to implement the changes in the bank repo rate.

The three main objective of the BOE are to maintain the integrity and value of GBP, maintain the stability of the financial system and seeking to ensure the effectiveness of the UK financial services.

The United Kingdom is a pivotal nation because it bridges the economical, geographical, and ideological divide between the United States and Europe. The monetary policy objectives are met primarily through the open market operations. In order to ensure liquidity in the economy, BOE daily conducts open market operations to buy or sell short term fixed income government instruments. BOE can conduct additional overnight operations as well if this is not sufficient to meet the liquidity needs.

The GBP can be affected more directly by oil prices than other currencies as the United Kingdom is an oil producer. The relationship between oil and the pound is fading, however, because production in the United Kingdoms North Sea oil fields is steadily decreasing. - 23309

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try 1500 Pips a day Forex Signals. Discover a revolutionary Forex Robot Trading System!

How To Deal With Your Forex Investment

By Bart Icles

Investing in the forex market is one way to really be able to augment the income of anybody who would be venturing in it, and nowadays, people from all walks of life can already do forex trading since the information about it is no longer limited to just banks and big financial institutions. Forex investments and the resources about it are being advertised across all medium, like newspapers, the radio, the television, and the internet. All these forex investment advertisements and information resources are saying basically one thing, that is, a forex investment is an easy way and a great way to earn money on a consistent basis. Not only that, it does not really require that much of a capital since one can already open a forex account with just some hundreds of dollars give or take a few. However, statistically, only a few beginners in the forex trading world are really able to gain some semblance of success. Why is this?

Of course, if you are planning to venture into dealing with a forex investment, your main aim is to become successful by making money through it and not losing your hard-earned cash, especially now that the global economic recession is still being felt all over the world. The main question that all forex beginners are asking is this: What makes a forex investment lucrative?

For those who are aspiring to become successful forex investment traders, the most important thing is to have the right knowledge about the forex trading world. Period. Without the proper education about the different quirks of the forex market, it is not possible for a forex trader to have a lucrative forex investment. One could not rely on beginner's luck. It takes much more than that to become successful in forex trading.

Now, the question is, how can you use the forex education that you have acquired in a positive manner? There is only one important quality that a forex trader should have. A forex trader should be able to acquire and hone the value of discipline. Without the right amount of discipline, all the forex education in the world would be useless, however good it is. The ability to manage risks is really a very important factor, otherwise, instead of making a lot of money, one would lose a whole lot, even to the point of being indebted.

There are lots of factors influencing forex investments. One should just be able to know how to use these factors to their advantage when doing forex trading. Disciplining one's self by using these factors would make one a successful forex trading magnate in the long run. - 23309

About the Author:

Learning to trade the forex starts with a desire to learn and a drive to become a great trader. Learning to trade forex market takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Forex Trading Robots Can Assist In Day Trading For Profits

By John Eather

Foreign exchange day trading is no great challenge. Millions of traders are doing a similar thing during certain hours of the day. This is where forex trading robots have their use, they look at the trends, and are set to seek and scalp profits. While this is a relatively risk free way of building up reasonably large incomes over time, the challenge lies in finding a robot that will perform.

All traders have different skills, aims and trading systems in place, as soon as you understand this you will be able to see how predictable they are. It is a little bit of a challenge to undertake this yourself however, because of the randomness of volatility in short time frames. Support and resistance levels are therefore not valid and using a robot could mean losses to the trader.

Day trading is actually a good wicket, and there here are a great many day trading robots for sale. They offer simulated track records which are back tested. But the only way you can tell forex trading robot will perform is to test it with real data in real time. This is known as a forward test! The forward test will allow you to see how the robot performs in changing market circumstances on a broker account.

Certain factors have to be taken into consideration when applying a forward test to a robot to see if it performs on a brokers margin account in changing market circumstances. It must be able to offer more win trades than losing trades on a consistent basis. It also has to show money management skills on the margin account and protect the equity in the account as well as not allow large draw-downs.

Ideally these robots should be tested against one another during the same or similar market conditions, with and identical capital deposit amounts. This is the only sure fire way to receive a true indication of whether a product is comparable or not. For vendors to cash in on day trading by means of a forex trading robot, don't rely solely on the hype of historical price data and tested performance analysis. This is marketing speak from the people who sell these products. Be prepared to test and compare products yourself. - 23309

About the Author:

Looking to find the best deal on forex trading robots, then visit www.MoneyMakingFxTrader.com to find the best advice on automated forex trading for you.

Make Money With Forex Made Easy Guides

By Bart Icles

If you want to become a successful and profitable Forex trader, you should in one way or another have access to some form of Forex Made Easy tips to help you navigate the world?s most profitable yet very risky investment market. By simply empowering yourself with all there is to know about Foreign currency trading, you may be able to make your investments grow larger and keep it that way indefinitely and for a long time, and more often rather than the opposite.

* Get yourself a Forex trading education. First rule before going ahead with any business venture involving your hard earned cash is to know beforehand what?s in store for you so you'll know how to navigate your way on it safely and properly once you are confronted with obstacles and other deterring factors. You can do this by enrolling yourself in a Forex trading program, either in a school or university or by enrolling in an online course offered on the Internet by various Forex experts. By learning how and what makes the Forex market and Forex trading work as a whole will enable you to act accordingly to the different influencing factors related to your trading and thus make you do more profitable transactions rather than losing ones.

* One secret why many traders gain knowledge and experience more quickly than others is that they regular practice the art of trading through paper trading. Through this method, they quickly assimilate the proper methods and techniques to use that lead to more profitable conclusions. Software programs of this nature, with its strategies and techniques, can be purchased or downloaded for free on the Internet. Making money from Forex trading, as well as losing it is a common everyday event. To let you be on the winning side of things, practicing paper trading will let train to become an adept trader once you start doing actual Forex trading and keep the odds in your favor.

* Another important thing to keep in mind is to always keep a disciplined approach to Forex transactions no matter how large or small the amounts of money are involved. It?s a foregone conclusion already that 95% of traders will lose their investments and only the remaining 5% will go on to make a profit. If you happen to be on the winning side, always remember not to get cocky and complacent, for tomorrow you might be on the 95%?s side. Just stick to your plan of action and you?ll continue to stay on trading as long as it is advantageous to you.

By simply reading this Forex Made Easy guide, you will view Forex trading in a new light which will surely enable you to be more successful in your trading. If you remember at all times to follow the above guidelines and also to be in control at all times and not the other way around, you'll surely be making more and more profitable deals in the near future. - 23309

About the Author:

Making forex trades starts with a desire to learn and a drive to become a great trader. Learning to day trade forex takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.