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Digg it UP - The Importance of FX Risk Management
Branding your comapny should be the first thing a company does. You have to convince potential customers to buy from you. Very few people have a monopoly like Microsoft or Ebay, Everyone else need to steer business to their company or product. When people think about your company, what is their impression. For my company, Solutions Ink, I wanted to portray a fresh, professional, ease of use type of company whoose product meets their quality needs while helping their business. I wanted to portray Solutions Ink as always on the fore front of the printing and promotional product industry's.To achieve this I needed to tell potential customers of new and innovative products for the printing industry. Variable data, large format digital printing, digital printing with pantone colors, label and form combinations, magnet and form combinations and e-commerce ordering systems. How best to show customers then actually devise a campaign where the product you are trying to educate your customers about is sent out to them to give them ideas how to use this product to help their businesses. One campaign I organised was to compile a list of fashion retailers whoose logo's were specific pantone colors that are not reproduced well in
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the ri
If you’re struggling to bring new business through the door, that’s the first mistake you’re making! Struggle does NOT lead to success. Whether it’s more clients, contracts, or sales your business needs now, invest two minutes to learn a three step process that will immediately shift your experience.1. Get clear about what you want.Might seem obvious, but don’t miss this crucial first step: know what you want with crystal clarity. “More clients” could be satisfied by just one new client this month – is that really what you want?Maybe you need six new sales a month to meet your target; or perhaps its $50,000 in weekly revenue. Maybe it’s a combination of metrics. Whatever it is, get it firmly in mind.Many business owners I work with have reached the point of desperation to where they’re scrambling for anything. When that’s what you’ve got in mind, that’s what you get. Don’t make this mistake. Get crystal clear and confident about what you want. And make it good, because you’re going to get it!Your goal should feel like a good stretch – not so easy that it doesn’t excite you to think about it, and not so big that you’re discouraged before you even start.2. Put your
First of all, currency trading especially, is not so much about gaining and losing, picking entry and exit points, but risk management . But herein lies the problem: if you are NOT trading forex, you are still exposed to the risks in the currency market! Even if you are not an importer or exporter, and do only domestic business, whatever your investment, it is exposed to currency risk as your investment is denominated in some dollars which are likely to appreciate or depreciate. This may not be reflected as a loss in your bank account, but you will quickly notice it in the purchasing power of your dollars, the interest rate you are getting at the bank, as well as the health of the overall economy. Therefore, it is only risky not to trade forex, because then you have a static position in certain dollars, which may be severely depreciated very quickly, at which point you can do nothing but wait for them to return to value.
Consider that the US Dollar Index was once at 120, and is now at 85. Americans who have not been making 40% to 50% per year in the forex market (most likely buying Euros and selling their own US Dollars) are now exposed to high gas prices, increased commodity prices, skyrocketing real estate, and an overall shift which among other things, is destroying the middle class. It is no secret in the US that prices are increasing. However many brokers and economists are selling this to the public as profit, when in fact this is what is known as inflation. Now it costs in many places twice as much to purchase a home for your family as it did a few years ago. Wages and other income have not kept up with that price increase. This is the definition of inflation! Your dollars now can purchase less, they have less purchasing power than they did 3 or 4 years ago. So the fed says inflation is 3% a year, but really this is economic newspeak.
Americans have become divided into two classes in the last few years: 1) those who are making more money than they ever dreamed of and 2) those who are struggling to make ends meet. This is transparent to previous social class structure, in other words, these 2 categories apply to the rich as well as the poor. There are for example, extremely wealthy people who are struggling to make their monthly payments because of rising financing costs, and because their investments are not doing so well. As well, there are poor people who have reaped in huge profits never seen before by investing in real estate and other high yield investments. So it is not isolated to specific demographics of people - we have become polarized economically, not politically. This was highly seen in the last Presidential election. Finally, the US economy is a benchmark for the rest of the world, for many complex factors not to be mentioned here (being the reserve currency of the world, the Petro Dollar, and being a leader in market based capitalism).
Risk Management of a forex fund
Trading forex comes down to risk management. If a forex trader takes a position in a currency, and sits on it for 3 months, while he may profit, he is exposed to the same kind of risk as if he were not trading. In other words, during that 3 month period, many things can happen to make that position open to risk. Utilizing stop losses, and actively trading, is in itself a risk management policy, rather than a strategy of knowing where the market will go. For a forex trader, the risk management side is inherently more important than guessing which direction the market will go. It is those funds and forex traders, who are maxed to the hilt with high margins, with no stop losses, that expose their clients to the huge risks in the forex markets.
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the ri
The basic elements of sales have remained the same for decades, for example prospects still buy on emotion, they may use logic to back up or reinforce the decision they have made, but they always buy on emotion. Everything a human being is involved with including purchasing whether privately or in the course of their daily work life is based on emotions. How did it go last time I did this? How did they treat me? Will they support me if things go wrong? How can I make sure I do a good job and I am seen to do a good job?.Alternatively the sales process, the elements of sales & marketing that are responsible for delivering orders to you, or prospects to your sales team has changed radically. How many customers could you reach 10 years ago? How was your marketing budget and focus different 10 years ago?. How much easier did the whole sales process seem 10 years ago?The potential problem with current sales organisations is they are trying to work within a paradox. On the one hand working within inter personal issues face to face with a customer or prospect, that have not changed. Whilst on the other hand facing the dilemma of an ever changing route to the customer or prospect in the first place.It is within
Consider that the US Dollar Index was once at 120, and is now at 85. Americans who have not been making 40% to 50% per year in the forex market (most likely buying Euros and selling their own US Dollars) are now exposed to high gas prices, increased commodity prices, skyrocketing real estate, and an overall shift which among other things, is destroying the middle class. It is no secret in the US that prices are increasing. However many brokers and economists are selling this to the public as profit, when in fact this is what is known as inflation. Now it costs in many places twice as much to purchase a home for your family as it did a few years ago. Wages and other income have not kept up with that price increase. This is the definition of inflation! Your dollars now can purchase less, they have less purchasing power than they did 3 or 4 years ago. So the fed says inflation is 3% a year, but really this is economic newspeak.
Americans have become divided into two classes in the last few years: 1) those who are making more money than they ever dreamed of and 2) those who are struggling to make ends meet. This is transparent to previous social class structure, in other words, these 2 categories apply to the rich as well as the poor. There are for example, extremely wealthy people who are struggling to make their monthly payments because of rising financing costs, and because their investments are not doing so well. As well, there are poor people who have reaped in huge profits never seen before by investing in real estate and other high yield investments. So it is not isolated to specific demographics of people - we have become polarized economically, not politically. This was highly seen in the last Presidential election. Finally, the US economy is a benchmark for the rest of the world, for many complex factors not to be mentioned here (being the reserve currency of the world, the Petro Dollar, and being a leader in market based capitalism).
Risk Management of a forex fund
Trading forex comes down to risk management. If a forex trader takes a position in a currency, and sits on it for 3 months, while he may profit, he is exposed to the same kind of risk as if he were not trading. In other words, during that 3 month period, many things can happen to make that position open to risk. Utilizing stop losses, and actively trading, is in itself a risk management policy, rather than a strategy of knowing where the market will go. For a forex trader, the risk management side is inherently more important than guessing which direction the market will go. It is those funds and forex traders, who are maxed to the hilt with high margins, with no stop losses, that expose their clients to the huge risks in the forex markets.
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the ri
Employee Leasing is not a totally new concept. It has been tried and proven by some of today's leaders and most profitable companies. It can help to stabilize your costs and insulate you from unexpected increases, which can send your profit margins tumbling.Employee leasing can provide "top of the line" benefits packages with a number of employee health insurance options, complete payroll services, personalized reporting and administrative services.Most employee leasing companies maintain a "minimal" administrative, sales and marketing staff in order to keep overall costs down, and in turn, "employee leasing costs" to their clients.Employee leasing is a cost-effective convenience for any small business owner. The reductions in cost are made possible through volume discounts by pooling your company's employees together for worker's compensation, health, dental, vision and life insurance benefits, state taxes, S.U.T.A. taxes, federal taxes, etc. Paperwork hassle and time consuming follow up are reduced, and sometimes eliminated, because the employee leasing company does the work for them. All payroll related taxes, filings and reports are also handled by the employee leasing company, leaving the business
Americans have become divided into two classes in the last few years: 1) those who are making more money than they ever dreamed of and 2) those who are struggling to make ends meet. This is transparent to previous social class structure, in other words, these 2 categories apply to the rich as well as the poor. There are for example, extremely wealthy people who are struggling to make their monthly payments because of rising financing costs, and because their investments are not doing so well. As well, there are poor people who have reaped in huge profits never seen before by investing in real estate and other high yield investments. So it is not isolated to specific demographics of people - we have become polarized economically, not politically. This was highly seen in the last Presidential election. Finally, the US economy is a benchmark for the rest of the world, for many complex factors not to be mentioned here (being the reserve currency of the world, the Petro Dollar, and being a leader in market based capitalism).
Risk Management of a forex fund
Trading forex comes down to risk management. If a forex trader takes a position in a currency, and sits on it for 3 months, while he may profit, he is exposed to the same kind of risk as if he were not trading. In other words, during that 3 month period, many things can happen to make that position open to risk. Utilizing stop losses, and actively trading, is in itself a risk management policy, rather than a strategy of knowing where the market will go. For a forex trader, the risk management side is inherently more important than guessing which direction the market will go. It is those funds and forex traders, who are maxed to the hilt with high margins, with no stop losses, that expose their clients to the huge risks in the forex markets.
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the ri
Regardless of the advertising technique that you use, you could also lead visitors to an article page, a sales page or any other page so long as you have an opt-in form on that page and a means of directing visitors to it. People will not volunteer. They need persuaded with a good persuasive technique that makes them feel that they must fill in this form. They must also know that they will receive further communications if they do. So do not tell lies and do not mislead them.The top traffic source at the moment is from articles. Write articles, or have them written for you, on a topic that is relevant to your website. Make sure that they are written well, with no spelling errors or schoolboy grammatical howlers, like what you might maybe see on some websites coz me and my mate was on the web and we seen some articles what was wrote wrong, init!NO, it ain’t it! Local patois might give you street cred, but it will not give you a commercial supply of web site visitors. So, back to the article.Having written your article in a legible form, you should include a link to your web site. This is generally done in the author’s resource, or ‘bio’ box, that almost all article directories provide. Provide a link
Risk Management of a forex fund
Trading forex comes down to risk management. If a forex trader takes a position in a currency, and sits on it for 3 months, while he may profit, he is exposed to the same kind of risk as if he were not trading. In other words, during that 3 month period, many things can happen to make that position open to risk. Utilizing stop losses, and actively trading, is in itself a risk management policy, rather than a strategy of knowing where the market will go. For a forex trader, the risk management side is inherently more important than guessing which direction the market will go. It is those funds and forex traders, who are maxed to the hilt with high margins, with no stop losses, that expose their clients to the huge risks in the forex markets.
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the ri
The start of the summer can be a singularly stressful time of the year. Just as soon as the exams end you have to find a job, at the same time as everybody else! So what can you do to tip the balance back in your favour?Firstly, make sure that your CV is well-written and up-to-date. There are thousands of books and websites overflowing with CV writing advice. The major jobsites such as Monster are a prime example and if you find the CV writing process too daunting you can even employ a professional CV writer to do it for you.To be taken seriously you should always introduce yourself with a covering letter addressed directly to the hiring manager. If the job ad doesn't give a contact name then it's always worthwhile phoning the company to find out for yourself.(Some companies are remarkably reticent about revealing the names of their staff; reassuring them that you simply wish to know who to address your email to can sometimes do the trick.)As most people use the same CV for each job application, the covering letter is particularly important because it is your opportunity to show that you understand the employer's needs.A tried and tested approach for a covering is to explain
Consider purchasing 100k EUR/USD at 1.2020 expecting a rise to 1.2100 (with a stop at 1.2000). If you are trading 100,000, you have taken a 100% cash position. If the EUR/USD goes as expected, you would make a profit of $800, or .8%. If it goes against you, you would lose $200, or .2%. So you are risking .2% to gain .8%. What many traders might do is take a 1,000k (1 million) position, which is 10:1 margin. This increases your P/L by 10 x - so that .2% loss is 2%, and the .8% gain is 8%. This is where risk comes into the forex market. So, it is not the forex market itself, or forex trading itself, that is risky, but rather, the risk management policy of forex dealers. Good dealers will first have a solid risk management policy, and second, develop a trading strategy.
Finally, during volatile times, or if a trader just wants to have a go at making 100 points, it is possible to take a less than 100% cash position, totally limiting the risk of loss. Using the example above, where you have 100,000 in your account, it is possible to trade 10k lots instead of 100k lots, putting you in a position of only 10% cash, or negative margin. This means the above trade loss goes from .2% to .02% - as well, your gains are also limited to .08% instead of .8%. However during certain volatile times trying to make a small profit may be better than exposing funds to potential losses.
Forex trading allows for a great degree of risk management not available in other capital markets. Margin, being able to buy or sell without limit, high liquidity (2.3 trillion traded daily), and a 24/6 market, give only the forex market to be so flexible regarding risk. In other words it is not possible to have such a sophisticated risk management policy in other markets.
Buy OR sell (compared to stocks where you can not always go short) Always find a buyer or seller (the forex market is the only real liquid market in the world. It is impossible you want to trade and cannot find a buyer or seller) Use high margin, 200:1, or as little as you want 1:200 Take opposite positions at the same time Take multiple positions (instead of selling EUR/USD, take multiple EUR positions against the crosses such as EUR/GBP, EUR/CHF, as a hedge against your first EUR/USD position)
The above factors are the real opportunities in the forex market, not the potential to make 100% that exist in other markets such as the stock market.
How stop-losses work
Whenever you take a forex position, you always have the ability to enter a stop-loss order. This means no matter what happens, if the position goes against you, you will exit at the pre defined stop loss order. If for example you purchase 100k of EUR/USD at 1.2050 expecting the EUR/USD to rise in value, and your stop is placed at 1.2020, you are guaranteed to be filled at your price, even if the EUR/USD drops to 1.1700. Using stop losses can be a great addition to a risk management policy.
Market conditions
There are times in the forex market where the market is extremely volatile, such as when the Fed makes an interest rate announcement, or during the first few hours of major market openings, such as 9:00 am - 11:00 am New York Time.
Risk Profile
Every trader or investor in the forex market should have a solid risk profile. Your risk capital will determine the risk-profile of your account. For example, if you have 10,000 to invest, you can say that you are willing to risk 1,000 of that capital with the potential to gain another 10,000. This can be easily implemented by a fund manager, so your losses can be limited to 10% or 5% of invested capital. It is not impossible, but would be very reckless, for someone to lose 100% or even 50% of invested capital in less than a year. That means they are using high margins and purchasing more than the account's risk profile can handle. This is not only unprofessional, it is dangerous and bad for the client and the industry. Clients may have pre-arranged agreements with their forex dealer what is the risk profile of their capital. It may be that you are willing to take high-risks, but it should all be discussed and agreed upon before your account is traded.
Risks of not trading
Business itself carries a high degree of risk. Clients may not come to your shop. Payments may not go through. Factories have malf
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