How to use Pyramiding for Better Forex Profits

As a retail forex trader, your end goal is always to get as much out of a successful trade as possible and minimise your losses on unsuccessful trades. Most beginner traders will essentially open up a position when they think they have seen a favourable entry point, then let it ride until it is time to close the trade. A more experienced trader will open a position then watch the price action on that trade and if things are moving favourably, they will increase the size of their position on that trade, somewhat similar to doubling down. This technique is called pyramiding and has the potential to greatly increase profits from a successful trade, without a concurrent increase in risk.

Pyramiding Explained

The simplest way to explain pyramiding as a forex trading strategy would be to say that when you’ve opened a position and the price has move successfully for you, you will then reinvest those profits back into the position. If the price keeps moving in a favourable direction, your profits are greater than if you had just kept the original trade amount. If the price then moves against you, you can simply close out the trade and not have lost any of your funds.

An Example Pyramid Trade

Let’s assume that USD/CAD is trading at 1.3215. Since the Canadian dollar has not been strong recently, there is a very strong uptrend in the USD/CAD pair. Your analysis of the market leads you to believe that this trend will continue, so you enter the market with a $1000 position.

Now, the price rises to 1.3315. At this point, you are up $1000. You move your stop loss up to 1.3215, and buy a second mini-lot. Essentially what has happened now is that you have a trade which risks only $1000 in total, but has a $2000 position. You have doubled your position without any increase in risk.

If the trend continued and the price moved to 1.3415 you could then move your stop loss up again – this time to 1.3315 – and buy a third mini-lot. You are now guaranteed a $1000 profit on your first mini-lot and to break even on your second mini-lot. Your risk on the third micro-lot is $1000. In other words, your total risk is zero – this is now turned into a free trade.

If the trend continues and you exit your position at 1.3515, you are well into profit. You’ve made $3000 on your first $1000, $2000 on your second $1000 and $1000 on your last $1000. That is double the profit you would have taken on your initial entry.

The Risks of Pyramiding

This technique is only viable in a strongly trending market, for obvious reasons. Also the stop loss here is hugely important, if you forget to set the stop loss, any market movement could completely wipe out your trade.

Lastly, as with all trades, have an exit point in your mind. Just keeping a position open and hoping for the trend to continue is not trading, that is gambling. Be disciplined, close your position when you plan, and enjoy having a profitable trading career.

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Best Roth IRA Investments

The Roth IRA is an alternative to the Traditional IRA that originated in the 1990s in the United States. A Roth IRA differentiates itself from a Traditional IRA in that it is funded with after-tax dollars rather than pre-tax dollars. Due to this unique feature, distributions taken from a Roth IRA after one is 59.5 years of age or older are tax-free. (Distributions taken before age 59.5 are subject to a 10 percent penalty from the IRS).

A Roth IRA has many different investment options. This article will discuss the merits of investing in two specific investment options for a Roth IRA: mutual funds and stocks.


Mutual Funds

Mutual funds are the most popular investment option for a Roth IRA, chiefly because they provide so much diversification. Unlike stocks or bonds, which only invest in a single asset, mutual funds have their hands in multiple assets. Mutual funds-- both within and outside Roth IRAs-- reached $15 trillion in assets in the United States in 2013. 

An astounding 62% of all Roth IRA investments are done within mutual funds; the investment options within a Roth IRA mutual fund include funds with an equity, bond or balanced outlook. Of these three options, mutual funds with an equity outlook are by far the most popular-- according to the Investment Company Institute,they account for more than half (52%) of the mutual funds in Roth IRAs. Equity funds invest in both domestic and international stocks, and are either actively managed or track a stock index. Equity funds typically focus on growth rather than income, and are for more aggressive investors.


Stocks
31 percent of Roth IRA investments are within individual stocks. Like equity mutual funds, there is the possibility of great appreciation over time. However, since individual stocks are volatile and rarely provide the diversification of mutual funds, they are very risky. They should only be invested in by individuals with a high risk tolerance and a long time horizon. Usually the stock market will provide consistent growth over time, but no guarantees are made.

Conclusion

There are a number of ways in which to allocate Roth IRA funds, but stocks and mutual funds are two of the more rewarding. Do your research, be patient, and stay on top of your investments, and you should be fine.

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Types of Investments

The average person will agree that when it comes to finances, they don't think of themselves as very knowledgeable, especially when it pertains to investments. This is probably why most of these individuals will take their business to someone with enough knowledge to turn their nest egg into something they can be proud of. Unless you are in the business of investing when someone mentions the word Forex, there is a good chance that you will think they are speaking a foreign language. The fact of the matter is that Forex is considered by many as an important part of investing, the only difference is that this kind of investment deals in foreign exchange.

Market Jitters- Stock Market

When it comes to planning for the future, the stock market is probably one of the better-known platforms for putting it in gear. When a company chooses to offer itself up to investors, it is usually handled through arenas like wall street. Some of the more familiar tools used to trade are classed as common or preferred stock. The difference is relatively simple; preferred stock will put you at a higher risk of loss, but the income potential is greater. On the other hand, common stocks bear less of a risk and are generally based on how well the company is doing. The earning capability will depend solely on the success of the company involved.

Real Estate

When you hear the term real estate, the first thing that comes to mind is a piece of property to call your own. That property could be for business or personal use. When you are planning for your future investments in real estate should be taken very seriously, especially since they can turn around and help you increase your cash flow. There are many advantages to consider investing in real estate, and they include the ability to use depreciation as a tax write off. Then there is the matter of the property value increasing when you hold on to it for a while. There is very little risk involved and a great deal of investment potential.

Gold

If you are not inclined to put a whole lot of faith in the stock market, then gold will more than likely be something you think about. The historical value that sticks with gold is unfathomable, especially since it continues to be one of the leading sources for investors. Unlike so many other investments, gold has not lost any of its punch, so when currencies devalue where you live or in someone else's Forex, your portfolio will continue to be strong with gold. If you were to compare the performance of gold to most other investments the thing that glitters will come out on top every time.

Mutual Funds

Investors can still invest in common stocks on the stock market and place a reasonable amount of their money in mutual funds. This will give them the opportunity to diversify some of their assets and lower their stress level. Other than the fact that mutual funds may be thought of as safer, the investor has the potential to get in on the ground floor with smaller investments. It is important to remember that every investor is at risk of losing something, but mutual funds may be a lot more predictable as far as the direction they are heading. When the dust settles, investments are all about your nest egg, which is why it is in your best interest to seek professional advice.

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Four Things You Need to Know About Angel Investors

Like Money from Heaven

Angel investors are people who have some money to invest and choose to provide capital for an entrepreneur just beginning a new business. In return, the angel investor receives ownership equity or convertible debt. As Robert Bratt will tell you, some of today’s biggest companies started small with an angel investor. 

Not Only for Millionaires
The term angel investor was coined to describe people who invested in Broadway shows, but today it refers to anyone who invests in an entrepreneurial company. One of the reasons people are attracted to angel investing is because the returns can be much higher than traditional investing, but the main reason is because they want to help an individual. However, most angels are not millionaires. They are medium to high income earners who are looking for the next big thing. This means there may be people you know who would be willing to invest in your start-up. 

Not Venture Capitalists
Angels are the opposite of venture capitalists because they are investing their own money in the start-up and not someone else’s. Some angels are former entrepreneurs who got help from an angel and want to give that opportunity to someone else. Angels also give more favorable terms than other lenders because their aim is to help. Often an entrepreneur can find an angel among their family members and friends. 

Angels You Know and Angels You Don’t Know

There are two types of angel investors. One type is the person you know as already mentioned. The other type is someone you don’t know, and you find through an organization or list of angel investors. Before choosing an angel you don’t know, you need to make sure what the terms are. This is not just the terms of the loan but other things such as what percentage of your business are you giving in equity, and can they fire you.

Some Tips When Meeting an Angel

• Don’t offer too much equity in the beginning. You may be tempted to give a higher percentage of your company to get more money, but this should be avoided because it is not good long-term strategy. 

• Be very fluent in your financials. Investors want to see that you know the ins and outs of your money, and how you plan to make a profit.

• Include a salary for yourself in your calculations. Angels expect you to do this because it shows that you respect yourself. If you can’t take a salary some months because of other expenses, you should keep track of how much you earn, and take your salary as soon as you can. 


Whether it is an angel you know or not, angel investing is an excellent way to either get your business off the ground, or take your already successful fledgling business to the next level.

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How to Build a Complete Financial Portfolio

Chasing your desired lifestyle is something that is attainable with the right investment knowledge. Learn exactly how to build a financial portfolio.

Tips for Building a Complete Financial Portfolio

For most every one of us, there are hopes and dreams that drive us. These include where we want to live, what attire we wear and how we choose to invest our cash. For many folks, the true costs of attaining that type of lifestyle are difficult to ascertain. Fortunately, there are several methods that can be used to empower action by building a financial portfolio. The question that needs to be asked is what comprises a good financial portfolio? In short, the answer is a 6-month emergency supply of cash, a well-stocked retirement account, zero debt and a broad range of investments across the financial spectrum.

Planning is Paramount

Getting started is a breeze. It requires a handful of resources in a pen and a piece of paper. First start off by listing all the assets that you currently own such as liquid cash, CDs, retirement accounts, cars, bonds, stocks and mutual funds. Next up, list all of your liabilities – long-term loans, short-term loans, credit card debts and so on. All liabilities should be listed since the best way to accurately create a complete financial portfolio is with all relevant information. Your balance sheet will list total assets and total liabilities, and compiling a financial portfolio can take a significant amount of time.

Fire Up Your 401k

For the most part, companies will match all of your contributions to your 401k account. The longer your tenure at the company, the greater the matching contributions will be. 401k accounts can grow at a tax deferred rate for many years (20, 30 or 40 years) and this can translate into millions of dollars.

Pay Down Credit Card Debt

High interest credit card debt is a burden that can kill an investment portfolio. Funds can be diverted from investment accounts and mutual funds to the reduction of debt on your credit cards. The maximum payments should be made on the cards with the highest interest rates, while minimum balances should be paid on the other cards.

6-Month Emergency Cash Reserves

Homeowners are best served with a 6-month cash reserve for emergency purposes. This allows for coverage of all exigencies such as medical, home repairs, student loans, fixed payments, and unemployment related issues.

Purchase Roth IRAs

For American investors, Roth IRAs are ideal for individuals with an annual income of $150,000 (married couples) or $95,000 (singles). The benefit of funding a Roth IRA is that you can withdraw your funds anytime you want at no cost. At age 59.5, the withdrawals are tax-free. Further, you can use Roth IRAs to buy stocks and mutual funds. And you can use your Roth IRA funds to enjoy zero-penalty medical insurance premiums if you have been unemployed for 3 months or more.

Making a Down Payment on a Home

Making a down payment on a property is an effective way to move away from an expense item to transforming something into equity. All interest-related payments are tax deductible and there is a capital gains tax exemption of $500k for married couples and $250k for single couples. Homes can be purchased with a 20% down payment and a 3% - 4% annual gain.

Author’s Bio: Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise for the globally renowned spread betting and CFD trading company – Intertrader.

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Three Simple Strategies That Will Help You Build Substantive Wealth

These days, many individuals are interested in building substantive wealth for themselves. Whether you're attempting to accumulate wealth to pay off loans, put your child through college, or retire well, it's important to note that you can realize your vision. To get you started on the path to developing the type of economic freedom and power that will improve your quality of life, consider implementing the following three simple strategies:

1. Study Financially Successful People.

One great way for you to start building a strong financial future is to study financially successful people. This will help you in numerous ways. First, it will function as motivation as you see that everyone who is now rich did not start their life journey in a wealthy place. Additionally, studying the lives and ideas of wealthy people will empower you with knowledge regarding the systematic steps and strategies they took to start accruing assets and capital. Once you start the process of studying financially successful people, consider an individual such as Robert Rosenkranz. Rosenkranz is currently the CEO of Delphi Financial Group, and he has developed extensive financial wisdom that you can learn from to start building your own capital. Additionally, Rosenkranz is a successful photographer and is a member of the Visiting Committee for the Department of Photography at The Metropolitan Museum of Art.

2. Invest.

Another strategy that you can implement to start building financial wealth is investing. This method can prove very efficacious because it empowers you to develop a stream of passive income once you learn how to make prudent decisions in this venue. If you are unfamiliar with the world of investing, it can be helpful to take several classes and/or hire a professional financial adviser who can provide you with sound counsel regarding how to make economically prudent investment decisions.

3. Develop Multiple Streams Of Income.

One of the things that you may notice as you begin to study the lives of financially successful people is that they tend to develop multiple streams of income. This is an important and advantageous strategy because it empowers you to continue earning money from one venue even if another well dries up. There are infinitely many ways that you can develop an additional stream of income, including but not limited to investing, creating a blog, participating in money markets, and selling clothes on eBay.

Conclusion

If you're serious about building a strong financial future for yourself, you should know that there are numerous ways that you can turn your vision into a reality. By implementing some or all of the financial strategies outlined above, you will likely find that your money starts to grow

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