Is automated forex trading going to be the next big thing that’s going to turn the way we approach our trading upside down?
What is automated forex, and can it produce even better returns than a person trading?
Will it mean that I will not have to physically trade forex anymore, and do I design the forex trading system?
The answer to these questions may surprise you.
Here's what others have to say about the "Forex Autopilot System" that is very popular among new and experienced traders, because of the results, and the fact that it is automated:
You just got yourself a demat account– so now comes the scary part. How do you protect yourself against fraud? How do you make sure your transactions are legally compliant?
The Indian economy today is vibrant and NRIs may have an advantage over resident Indians as they rake in the moolah in the equity market with the dollar advantage.
You have two ways of investing in the share market: Through brokers or brokerage companies Online trading, where your bank and your Demat accounts are integrated to make the trading process easy. Banks such as ICICI Bank and HDFC Bank offer online Demat trading accounts. There have been instances where first time investors have lost a lot of money because of fraudulent deals/ practices. In the interest of investors, the Investor Protection Fund at the Bombay Stock Exchange Ltd has prescribed a few Dos and Don’ts for non resident and resident investors. The Dos: Ensure that the market intermediaries through whom you are trading are registered with the Securities and Exchange Board of India (SEBI) or stock exchanges. Ensure that instructions given by you to the stock broker/ sub broker /depository participant are clear and unambiguous. Also ensure that you obtain contract notes from your broker.
Make all payments / monetary transactions with the market intermediaries through banking channels.
Check the credentials of the company carefully and thoroughly while buying a particular stock/ share.
This can be done by reading the company report, visiting the website of the organization and finding out about its vision, its management, growth strategies, past record and investors’ policies.
Other sources of information include databases released by data vendors, and business magazines.
Establish your financial goals and formulate a personal trading / investment strategy. Keep in mind your risk tolerance level as all investments in stocks and shares involve risk.
Read and comprehend the contents of the Risk Disclosure Document, while completing registration formalities with the market intermediary.
Exercise caution while trading in stocks and shares that have sudden fluctuations in price or show increased trading activity suddenly.
Understand that there are no guaranteed returns on investment in shares and as such you should be prepared to lose money also.
Inform the stock exchange (Toll Free line 1600 22 6663) of any undesirable / fraudulent trading practice/market aberration on any share/ scrip. You have option of recording your message in Hindi or in English.
The Don’ts:
Transact with unregistered brokers or sub-brokers and market intermediaries. Leave your Demat transaction slip book with your intermediary.
Pay heed to any promises of guaranteed returns on investment in a particular share. Get overwhelmed by advertisements or hyped declaration of financial performance of companies.
Imitate investment decisions of others It is wise to understand the trends of stocks on a personal basis.
7 steps to better investment planning!
We invest to safeguard ourselves for a rainy day. If you’ve just started investing or want to start, then you could use our 7-step plan to become your own investment consultant!
Managing your investments becomes easy when you make it a habit to save, even if it’s very little money. You need to keep a meticulous account of personal income versus expenditure on a monthly basis before you start investing. Here are some steps you can follow:
Step 1: Create a budget and track your expenses
A budget helps you identify problem spending areas and also helps regulate your cash flow. Tracking your expenses against the budget helps you control spending and free up cash to clear existing debt and save for retirement or your child’s education. For example, your budget allocation includes a certain amount for groceries for a week. You discover on comparing that amount against actual expenses that you have overspent on buying additional items that you did not really need. This will caution you against making similar expenditure next week and at the end of the month, you will end up saving money!
Step 2: Pay off your existing credit card debts:
Are you surprised that paying off credit card debt is a step towards investments? Credit cards charge a high amount of interest along with the principal repayments. When you clear this amount, you‘ll be glad to realize that all the interest amounts and late fees you paid to credit cards can be utilized for your savings and investment program.
Step 3: Save effectively for a rainy day
Emergencies often arrive unannounced. Ensure that some money is set aside to cover monthly expenses for at least three months. These funds should be invested or set aside in instruments that can be readily accessed should you need cash. For example, keep these funds in a savings account in a bank or invest in a money-market mutual fund.
Step 4: Design a disciplined savings program
You can open a recurring deposit account. In this case a particular amount from your income gets deposited every month for a fixed tenure. You can also invest in a series of fixed deposits (FDs). For example, if your cash reserve is USD 24,000, this amount can be divided into six FDs of equal amounts, each with a 6-month maturity. At the end of 6 months, you’ll have a fixed deposit maturing every month. You can continue to roll them over to create a source of regular income and minimize risk.
Step 5: Invest in education, pension, and retirement insurance plans
You can get life cover, education cover and save for retirement when you invest in insurance. Besides this, you get tax exemptions to reduce your current tax payout. For example, you can invest in the insurance plans which offer not only life insurance, but riders for investment of the premium amount so that you get good returns when you retire.
Step 6: Buy yourself your dream home
Investing in a house is one of the best investments you can make. First, your payments towards interest and real estate taxes are tax deductible. Second, your property increases in value over time.
Step 7: Invest in a diversified investment program or systematic investment plan
Your risk tolerance level goes a long way in defining your investment approach. If you’re not averse to taking risks, then you may want to invest in an equity based mutual fund. Else, you may want to invest in a plan that involves bonds and other safe securities. Also, ensure that you keep in mind your investment objectives before you subscribe to an investment plan.
Do you have tips and/ or tried and tested plans for managing finances effectively? Do you have your own version of a 7-step plan? Do share it with us!
Top 6 tips for successful day trading!
How do you make money on the stock market? How soon should you sell your shares? Are the sheer volumes of trades that happen every single day making you wonder if you aren’t doing enough? Is it good not to trade sometimes? Here are answers to some of your questions, in our feature on day trading.
The equity or stock market yields the highest return if stocks are held for a long enough period. The second part is what the media fail to emphasize while screaming from the roof tops about how people are making money in the stock market. And it’s ignorance of this fact that causes people to invest blindly and lose their hard-earned wealth.
Here are some useful pieces of information to help you understand trading and shares better. Also, some tips to invest safely in shares, while maximizing your returns.
1. When you buy a share, you become one of the owners of the company: What people forget when they buy a stock is that they are now a part of this business and, just as in any business they will have to share both profits and losses. When the company makes a profit, you earn a share of its profits. If the company is in for a loss, you too will lose your money. This makes investing in shares risky, but there’s no way out of it.
3. The price of a share can vary in the short term: When the company issues a share, it has a face value. Once the stock is traded, its value either goes up or comes down, depending on its demand and supply in the market. This value is called the share price. When there is a big demand for a share, its price goes up, and vice-versa. When the media report that the stock market has gone up or down, it is the share prices of the stocks available in the market that have moved. As an investor you should not lose heart. The share prices of good companies will always go up.
4. Be a long-term investor: Buying low and selling high is the best way to make money in the stock market. Buy shares in the bear market, when share prices have gone down. Sell in the bull market when the Sensex is going up and so are the share prices. It’s impossible to predict the direction in which the market will go. Hence, when you invest, you must stay for a long time in the market. As companies increase their sales and make more profits, their share prices will rise. Meanwhile, keep selling only a small number of shares at frequent intervals and book profits if you think you are getting a good price.
5. Decide on the amount you can risk losing: Never forget the fact that anything that gives you higher returns also carries a significant amount of risk. So invest only that amount which you can risk losing. If you are young, have no dependants and liabilities and have a regular job, you can invest a sizeable amount in shares. If, however, you are nearing retirement or have debts or dependants, minimize your exposure to stocks.
6. Beware of ‘hot’ tips: Avoid buying shares of unfamiliar and unknown companies. Stay away from ‘hot tips’ given by brokers – they usually turn cold by the time they reach you. Research the stock yourself. Read the audited profit and loss statement of the company. It can give you a wealth of information about the future prospects of the company. Understand terms such as Earnings per Share (EPS) and Price/Earnings Ratio (PE).
As defined by Investopedia – The Investing Education Site: EPS: “The portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability.” PE: “A valuation ratio of a company’s current share price compared to its per-share earnings.”
Invest in a top-performing diversified equity mutual fund: If you are apprehensive of the risks of the stock market, invest through a well-performing diversified equity mutual fund. This fund is headed by a fund manager who does all the research for you. It’s a safe bet.
