Archive for December, 2007

by Alfred Chew
There is not much understanding about Level 2 Quotes in the form of print. The reason is because of not many retail traders like you and me are being expose to this Level 2 Quotes. The fact is that you won’t know what you don’t know!

The Level 2 Quotes is sometimes known as Level II Quotes or L2Q in abbreviated. To the Professionals traders, the L2Q is no stranger to them. All the Fund Traders and Professional Traders use them to determine their trading decisions. They use it extensively to beat the market every time they place a trade.

How does Level 2 Quotes work? In principle they show the supply and demand of a particular stock. When you enter a ticker in the ticker box in the L2Q, you will be shown the number of buyer at a certain price from the lowest queue to the transacted price.

From the Seller side, it will show how many shares and how much these sellers are willing to part at that price. With this information in hand, you can determine which side is stronger. Usually the side with the most queues will eventually overcome the side with fewer queues.

It works the same way like a tug of war game. If the left side has 30 participants and the right side is with 10 participants with the same average participants’ weight, 99% of the time the left side will trump the right side.

When you have the L2Q along side with you while you trade, you will be able to scan through how many buyers on queue are willing to bid at a price say at 45.88. You will also know how many are bidding for 45.87 and the list goes on and on.

Have you ever notice why stock price keeps falling from the price chart? You will be able to see it very clearly from the Level 2 Quotes. 80.9% of the time, the buyer side of the Quotes show that there are very little buyer where as on the seller side is overwhelming.

Those who use the L2Q will have the advantage; they know that the stock price will keep falling until the buying momentum start to swing in. Until that happen what do you think they will do? They will sell even faster. They will not buy until they have a confirmation form the Level II Quotes that tell them the selling pressure has lost its momentum.

They are just following the momentum to get them the profit!

The Level II Quotes prowess is not being commercialized for the reason that most Professional Traders do not want you to know of its existence. ‘The least the trader knows the better.’ This is a fact. Who would want to have greater competition when they are enjoying less competition?

It may sound unfair but in reality it is. This is how market works. I have stumbled upon this tool last year and I managed to increase my profit substantially by ‘listening to the market’ while in the trade.

Alfred Chew is a Trader who has work his way up from the Asian Financial Crisis and the owner of ‘Level 2 Quotes Secrets Revealed’. The Level 2 Quotes Secrets Revealed helps Traders to identify the best Entry and Exit level in their Stock Trading. You can instantly download a copy of Level 2 Quotes Secrets Revealed Step-By-Step Guide by visiting http://mylevel2quotes.comThis article may be freely reprinted or distributed in it’s entirely in any e-zine, newsletter, blog or website. The author’s name, bio and website links must be remain intact and be included with every reproduction.

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by
Some people spend their whole life struggling to earn enough money, so that when they are old, they can retire to a lovely destination and enjoy the remaining of their life. Today’s baby boomers are planning for retirement at younger ages than previous generations ever did. Many of us plan to travel from our homes each year, in search of beautiful spots, when we will retire. Whether it is by the water, in the mountains or near the desert, we will need money to pay for our vacations.

A solution would be to simply deposit a part of our income at some bank. But the truth is that banks had and will always have a really low interest rate. Some of us may feel very unsatisfied by this state of things. That is why I have to say that I am really happy High Yield Investment Programs (or simply HYIP’s) were invented.

HYIPs typically claim to offer interest rates of 1% or more per day on invested funds; some claim to offer much higher daily rates exceeding 200% a day. Allegedly, the highest-return HYIP on record has offered 1,100% ROI in one day. Still, I would recommend for diversity, instead of subscribing to programs with such big interest rates. HYIP’s are offering probably the most profitable investments available today. Conventional wisdom (if there is such a thing) in HYIP tends to suggest that the more you can start with, the less time it will take to become self sustaining. You can start with any amount… it is a combination of determination, discipline, knowledge and well being that will steer success or failure.

As to how long it could take to ‘make a living’; I venture to say that depends on what it takes to “live”. More is better, but it’s what is essential that matters. Reinvesting profits 100% is ideally the fast track, but some money is needed for life while ‘earning a living’. These “games” might be considered as lotteries. However, the odds of winning cannot be determined, as one cannot know whether one is playing early enough to win money (that is, whether a sufficient number of new participants will follow). Thus, these activities are unlike a lottery or other forms of gambling, where a player has an equal chance of winning no matter when a ticket is bought, or where the odds of the game are known.

Given all this information, I would like to add that from my experience as a hyip player, I am more the just satisfied by the results of my hyip investment. The phenomenon of Hyip’s is growing bigger and bigger on the internet today. Every day new programs are being launched. Lots of people are earning fortunes investing in these programs. Still, there is a big part of hyip’s that are scams. Many, many new players loose their savings to these guys. This is the place here Hyip Monitor comes into play. “Hyipbeings Monitor” is constantly studying and researching the hyip market, and they are also investing in a number of HYIP’s to be able to analyze them and keep track of their payments.

Feel free to visit our Hyip Monitor at any time. Our Hyip Rating will provide you with updated information about Hyip Investment

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by Allen B.
Treasury securities are one of the safest ways to invest your money and get a stable return. There are some trade-offs to be expected with such a safe return, but the rewards can offset them. Let’s take a look at some of the types of treasury securities available and what you can expect from them in terms of safety and return.

The primary treasury security available is the Treasury bill or T-bill, for short. They are issued by the US Department of the Treasury and are sold at a discount from face value. These are generally short term investments that mature in less than one year, and do not pay interest until the maturity date.

Another type of treasury obligation is known as a treasury note. It differs from the Treasury bill in that it matures in two to ten years, and issue interest payments (known as coupon payments) every six months. They are issued with two, five, or ten year maturity dates and have par values of $1,000 to $10,000.

A third type of Treasury security is known as the Treasury bond, and has the longest maturity of all the Treasury securities. The maturity period for these is usually 30 years, and like the Treasury notes, have coupon payments every six months. These are no longer available directly from the Treasury department, as issuance of this type of bond was discontinued in 2001. They are, however, still traded widely on the secondary market and will continue to be until the last one matures in 2031.

A fourth and final type of Treasury security is known as the Treasury Inflation Protected Security or TIPS, for short. This security differs from the other securities in that the principal or par value of the security is adjusted for inflation over the period of maturity. The amount of adjustment is coupled with the Consumer Price Index. As a result, the coupon payments on a TIPS will differ by the amount the principal has been adjusted. This has the end result of protecting the investor against the degrading effects of inflation on the principal value of the investment.

Treasury securities are widely considered to be a very safe investment because they are backed by the US government, the largest economic power in the world. Because of the relative safety of these investments, however, the yield on these securities is low in comparison to other municipal bonds or corporate bonds. The primary goal for someone interested in investing in these securities should be capital preservation rather than growth.

There are many other investment options available to the individual investor. For more information on investing from online stock trading to money market funds, visit the Personal Finances Blog today!

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by Jim Scherrer
So, you think you’re a pretty savvy investor. Your 401k, IRA, or personal investments have kept up with the S&P 500 averages during the past seven years and you’re up about 10% during that timeframe. Well, congratulations BUT, did you realize that the Mexican Exchange Traded Fund (EWW) which represents the Mexican stock market, advanced by almost 300%, or more than thirty times as much during the past seven years?

Please refer to the graph below in order to appreciate the explosive growth pattern that Mexico has experienced, especially during the last three years.
(Please visit the website below for graph details)

One of the most significant reasons for this steady and rapid growth in Mexico must be attributed to the policies of the new governing party that has been in control since 2000. Mexico has been governed by Harvard alumni during the timeframe shown above and will continue under the same leadership for at least another five years. The PAN party, led first by President Fox and currently by President Calderon, both Harvard graduates, has brought Mexico from a Third World Country to a Newly Industrialized Country standing in a matter of seven short years.

Among their numerous accomplishments, they have cracked down on corruption, have promoted free market capitalism while maintaining a firm peso/dollar relationship, and have elevated tourism to the top of their list of strategic objectives.

We have lived in Puerto Vallarta for ten years and have witnessed the changes and growth firsthand. As the economy has boomed, unemployment in Vallarta has been virtually eradicated while the population has almost doubled, prices for materials, labor, and land have tripled, and of course, real estate prices have also tripled. Now, let’s compare this growth and real estate appreciation to what has been seen in the central portion of the US, where at least half the population resides.

The chart below from the Office of Federal Housing Enterprise Oversight shows that in the Central Area (four zones), the average appreciation in purchase price was 25.5% for 1996 to 2001 and another 32.1% from 2001 to 2007, or 66% compounded through the eleven year period and therefore we estimate about 40% through the past seven years, i.e., real estate has performed much better than the stock market during the past seven years.
(Please visit the website below for chart details)

With the US real estate market currently experiencing a slump, no real appreciation in housing values is expected for at least two more years. In summarizing, most Americans have enjoyed roughly a 40% gain in their property value over the past seven years and can expect the equity in their residence to essentially be dead money for the next couple of years. When we compare the above data to what we’ve experienced in Vallarta, where real estate values have tripled during the past decade, we can only thank our lucky stars for letting us be among the first to participate in the ongoing land rush in Paradise!

Fortunately for the about-to-retire baby boomers, it’s not too late. There is currently no slump or softness in the Vallarta real estate market nor is any projected for the foreseeable future. To the contrary, the ten year building plan for the greater Vallarta area calls for about a 50% growth during the next decade and property prices are expected to double again during that time period.

Aside from the fact that we have seven months of perfect winter weather in PV from November through May where the average temperature is 73* with virtually no rain and blue skies, we have seven magnificent golf courses, hundreds of tennis courts, world class deep sea fishing, many five star restaurants, clean food and water, and 50,000 other gringos to play and party with, our portfolios of stock and real estate investments are “en fuego”!

If you’re recently retired or considering retirement in the near future and you’re the savvy investor that you think you are, you really ought to check out the opportunities that lie south of the border, enjoy your retirement to its ultimate, and put your dead money to work for you in Paradise.

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 24 years and resided there for the past ten years. The mission of his series of 30 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at Puerto Vallarta Real Estate Buyers‘ Agents and click on ARTICLES.

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by Anthony Green
Trading is much more of a psychological problem then a methodological one, only the traders who have first accepted this have a chance of being consistently successful traders. Without an understanding of trading psychology and the various issues that circumvent method, there will be virtually no chance to overcome the fear, confusion, and despair that can be inherent in trading. Ultimately, after a series of consecutive losses, method becomes replaced with a feeling that it is impossible to do anything right; if for no other reason than this situation, trading psychology is more critical than trading method.

New Trader Scenario

Consider a scenario where a trader develops a method for day trading an index future. The method gives 15 trades per day, and the trader has gotten to the point where they are able to paper trade with the following results: 9 wining trades averaging $85 each, and 6 losing trades averaging -$65 each thus giving $375 average daily gains. The trader has achieved these results for three consecutive months; their paper trading goals have been met and it is time to start trading real money.

Real money trading begins, but things quickly change. Instead of trading their method like they did when paper trading, the trader starts skipping trades trying to pick the winners instead of accepting the 40% losers; of course, they invariably pick more losers than winners. Trying to then correct this problem, the trader decides that maybe they are entering their trades too late. So now instead of letting the setup complete and then doing the trade, the trigger is anticipated so the trade can be entered earlier - the losses get worse.

With the continued losses the emotions take over: What is wrong, why am I such a pathetic loser? Maybe its not my fault, maybe the method just doesnt really work.

The problems get worse with each trade, more emotions and more loses - the trader quits trading. The trader now decides that their paper trading results werent really adequate to begin real money trading. They will go back to paper trading and studying again.

Thoughts that are going through the traders mind now: Maybe I should try different trading methods until I can eliminate those losing trades then I will be ready to trade real money again. Really, maybe I should just quit trading altogether maybe I am just a loser, and thats why I cant trade.

The Trading Psychology Plan

What should be very apparent from this scenario is that the trader never traded their paper trading method plan after transitioning to real money trading. Unfortunately, the trader is unable to realize what they have done, instead their emotions first place blame on the method thinking that it really doesnt work, and then on themselves for being such a pathetic loser. The final result being that the trader quits trading, and if the real underlying reasons for what has happened arent accepted and changed, this trader will never be able to trade real money even if their paper trading results become 100% winners, which of course is not going to happen.

The trader had a trading method plan, but they did not have a trading psychology plan. They did not have a way to make the transition from fear and emotion directed trading to actually trading the method as designed. They did not have a plan to objectively access and understand their given non-method actions, and then define a setup for replacing them.

The trading psychology plan must begin with an honest assessment and acceptance for what really happened: the trader never traded their method plan; there is no other blame to be placed, or excuses to be made. There is nothing wrong with the trading plan, and regardless, the trader has not traded it in order to be able to make that evaluation. As well, traders cannot internalize trade loses where they lead to their viewpoint of themselves you are not a loser because your trade is a loser.

Trading Psychology Plan Components

Accept that losing will be a normal part of trading. Not only is it impossible to be perfect, it is not an objective or necessary to be a profitable trader.
Replace the focus of winning and losing with the objective of following your plan. This was not done while paper trading, as the trader had a specific profitability goal that they used to tell them when they were prepared to trade real money. They did not understand that the reason they achieved this goal was because of how they followed their plan.

Remain neutral and non-judgmental towards yourself. If profitable trading is ever going to be possible, this is mandatory. There is no way that you are going to be able to trust yourself to manage risk while you are also telling yourself that you are stupid or a pathetic loser each time you lose or feel that you have done something wrong.

Eliminating your emotions is not the objective; I actually do not think this is possible. Emotions are always going to enter into trading learn to control the emotions, instead of having them control you.

Accept that emotions are a part of life; they arent by definition good or bad, and actually if you can shift the focus of what the emotion represents, they can be very beneficial for the trader. For instance, if I am feeling confused and that causes an emotional response or hesitation, I want to feel that emotion. This emotion becomes a warning to me that I should wait and try to find more chart-market clarity before taking a trade, something that can be very typical when markets are in congestion.

Start slowly this may be the most important component of your plan. For instance, begin trading real money for an hour at a time, and then assess what you have done, always asking yourself the question: did I follow my plan, or did I take non-method trades.

Granted, you will not be able to approximate your paper trading results as the expectancy of that plan was achieved by averaging 15 trades per day. However, not only will this help further to shift the focus from how much money did I make to did I follow my plan, it will also allow you to acclimate to the logistics of real time-real money execution, and the related initial emotions, where all of a sudden the market feels like it is moving considerably faster. By doing this you will build-up to trading your full plan at a pace that wont cause you to become so overwhelmed by the process, and immediately cause you to avoid what you had intended to do as fear and emotion becomes too strong.

You have a great trading method and trading plan. You have profitably paper traded, and you ARE now ready to start trading real money just be sure that you have a trading psychology plan that is as good as your trading method plan, and that you realize that neither will be of any use to you without the other.

Learn investing tips, proven stock market strategy - Turn $1000 Into $1 Million In 5 Years or Cash Back. Start getting 89.3% accurate stock market trading tip with exact entry price, exit price and stop loss.

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by Jim Canter-17653
When I first became interested in trading Futures I had no idea as to where to go to get information about trading. I didn’t know anyone that traded the Futures Market. In fact when I talked to anyone about Futures all I heard was “don’t trade Futures, it’s way too dangerous, you will lose everything you own”. Indeed you can lose money fast in the Futures market, but you can also make money fast because the leverage is fantastic and that’s what interested me. I knew I had to have a good system, but where would I go to find one.

At that time brokers would send you information, and maybe they still do, from various Exchanges about different trading strategies and how one might use them in a particular Futures Market. Well, this information looked pretty good! All I had to do was get a charting service and I was on my way.

I guess I wasn’t as bright as the person that gathered the information for the booklets because I simply could not make these indicators work for me. Surely someone was trading successfully using this information I thought, otherwise why would they publish the booklets. With this thought in mind I felt I just needed more information.

Books had to be the answer. Like I said previously, I guess I was not very bright because after reading thirty or forty books thoroughly, some two and three times, and having applied the techniques learned from the books, I was not able to trade profitably on a consistent basis. I’m sure some are capable of using these techniques to trade successfully, but I was not able to do so. While having a book burning party a few years ago, I decided to keep one book to remind me of my experience. It’s on my bookshelf and I glance at it once or twice a year to keep this experience fresh in my memory. There may be some great books out there that show you how to trade successfully on a consistent basis, but unfortunately I never found one. I wasted years on this endeavor.

By this time computer trading was getting popular. I received an advertisement about a program where I could actually write my own system and back test it to get results before actually trading it. Wow! This was great and it was only $4,500.00. They advertised anyone would be able to program this thing. Well they must have meant anyone with the exception of me. I wasted hundreds of hours trying to write programs unsuccessfully. I didn’t know the program language and I wasn’t able to get enough information to learn it so I decided to be intelligent about this situation and bought another program at only half the price of the first one. I was able to write a few programs that produced very well in back testing, if one could stand twenty point stops in the S&P. I really liked this idea but finally had to admit that it was not going to give me what I was searching for.

For years now I had been studying charts every single day plus weekends and evenings.

Of course I was aware that all indicators, strategies, systems etc. started with price. None of these things can be made without price moving first. Price can’t be wrong because it is what it is, therefore it is always right. So I decided to put all of my energy into the study of charts, or price and its movement, and finally I found it. It was right there in front of me all these years and I just didn’t see it. After another year or so of perfecting entries and exits and how to read where price should go, and if it would continue on or turn at that point, I finally had a system. This system will give you profits consistently. I found that price will tell you where it is going and where it is likely to turn, and if it doesn’t turn there it will tell you in advance that it will likely continue.

I had a hard time learning to trade without a mentor. It actually took years of commitment, hard work, and a lot of wasted money. If you are new to trading Futures, or any market, and you don’t have a mentor with a good system that will give you consistent profits, then by all means that should be your first endeavor. It is said that 90% to 95% of everyone trading in the futures market loses. Make sure you’re in the 5% to 10% that are winners.

Jim Canteris an S&P 500 e-mini day trader anddeveloper of the Precise Day Trading System.For more information go to futurecommodityonlinetradingsystem.com

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by Leroy Rushing
There’s a wonderful quote that goes something like “Don’t learn the tricks of the trade. Learn the trade.” That rings especially true when it comes to trading. That’s simply because there are no tricks, or shortcuts, when it comes to trading. The trading environment is a very unforgiving one that does not discriminate. Each and every one of us can fall victim to the ways and unpredictability of the market, and the moment you think you beat the system, think again, because chances are you didn’t.

Fundamentally, successful trading requires very clear and easily identifiable skills and habits. They must be thoroughly established, constantly and consistently in place. Otherwise, your trading experience will be very short or painful, or both. First and foremost is controlling your emotions. Anybody who knows anything knows there are no shortcuts when it comes to controlling your emotions. You either control them or you don’t. Not being able to control your emotions - whether it’s fear, greed, frustration, confusion, elation, etc. - when trading may very well be the primary reason behind trader failure.

Detaching yourself emotionally from your trades is much easier said than done. Something that has helped me tremendously in removing emotion from my trades is gaining a high-level of confidence in my trading strategies and execution, and the only way to do that is NOT to take shortcuts! I’ve worked hard and become very logical with my trading because I had to. I had to develop a trading plan and have the discipline to follow that plan, trusting that all the research, strategies, risk and money management plans in the trading plan are right for me and my trading.

Not far behind controlling your emotions might be lack of preparation. Can you imagine not being prepared when it comes to taking off for the moon, cutting your first incision for major surgery, singing and dancing on Broadway, or going to court for your first criminal trial? Imagine it. Pretty frightful sight, yes? I can almost guarantee you that anyone in any of the above situations prepared themselves through many years of education, study sessions, rehearsals, and practice. My guess is that they did not take shortcuts!

That’s not to say that people don’t take shortcuts, because obviously they do. I say “obvious” because the standards of those who take shortcuts are usually pretty low, so the quality of their work and/or performances is subpar and pretty obvious. Therefore, it would follow that those who take shortcuts very quickly separate themselves from the pack - from those with potentially long, successful careers.

So, why should trading be any different? It shouldn’t. Taking shortcuts when it comes to trading will most certainly shorten your trading career. Take the steps to Trade Smart and develop a trading plan, incrementally add to your arsenal of trading strategies, utilize the proper hardware/software for charts and analytics, acquire the skills and tools to execute your trades, and record everything you do. That way, you will have taken the long road to learning how to trade, but it’ll be the right road to a long trading career.

Leroy Rushing is an active, professional day trader; trading coach; and eBook author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide.

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by Vince Shorb
Investing young gives you a huge advantage; but many think that the stock market is to complex or confusing. The truth is that it can be! Fortunately, there is a simple investment vehicle that will allow the beginning investor to profit from the stock market. The best part is you don’t need a lot of money or knowledge to start.

Importance of Investing Young. It is essential that you start investing young; if you don’t your actually loosing money and missing out on the most important thing young investors have in their favor ‘compounding interest’.

Each year that you have money and are not investing you’re loosing about 3% of its value due to inflation. So after 10 year of sitting on $100 cash it could be worth less than $75. What’s more, by investing young you benefit because the money you made from your investments - make you more money. Making money from money you’ve already earned from your investments is known as ‘compounding interest’. This powerful force can make you a millionaire well before retirement age with saving as little as $70 per month.

Now that you know you need to invest; how do you start? The stock market offers a great place for young investors to get their money working for them; the good news is that you don’t need to have a ton of money to start. Plus, with the investment vehicle discussed in this article, you don’t need to be a stock market expert to begin.

What’s the solution? An ideal investment for young and inexperienced investors is to get on the road to financial independence are low-cost broad market index investments. Warren Buffet states, “A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money.” Reduced risk, solid returns and it one of the simplest investments you could make. An added bonus is that it takes only minimal knowledge and about 60 minutes to start getting your money working for you.

What’s a broad market index? A broad market index is a group of stocks that you can purchase as one. It allows young investors to buy a collection of top performing stocks that mimic the performance of the entire stock market. Since these index funds allow you to earn returns similar to the overall performance of the market it greatly reduces the risk. This is an advantage to the beginning investor since it is safer than investing in a single stock or some mutual funds; plus there is a history of double digit returns.

Although the term ‘broad based index investing’ may sound unfamiliar you already know many of these investments. -The Dow Jones Industrial Average index contains 30 top industrial stocks. -The Standard & Poor’s 500 contains 500 of a variety of different stocks. -The NASDAQ 100 contains 100 stocks that are mostly in the financial and technology sector.

When you invest in a broad based market index you actually own a small piece of each individual stock. For instance, when you invest in the S&P 500 broad market index, you’re buying a piece of all 500 stocks in that index. So for each S&P index share that you own your actually own 1/500th of companies like: American Express, Google, Ford, Nordstrom, Home Depot, Staples and Yahoo to name a few.

For those young investors that don’t want to stay glued to their computer all day broad based market indexes are great solution. Since this investment matches the overall return of the market if you believe over the long-term the stock market will continue to rise in value this could be a good investment. Over time this investment could generate solid long-term returns. The key benefits associated with broad market index investing are:

1) Higher Returns - According to Standard & Poor’s, less than 30% of managed funds in 2006 beat broad market index investing. What’s more over the last ten years the average person that invested in broad based index funds has beaten the returns most mutual fund investors.

2) Added Diversification - Diversification lowers risk. If you invest in one individual stock and bad news comes out on the company you could loose a lot of money fast. Now, for instance, if you’re invested in an S&P 500 index fund and one stock has bad news you really don’t care. That will only affect your investment one five hundredth.

3) Lower fees - Index funds fees are typically lower and are often around .5%. While the average mutual funds fees are around 2%. Over time this will make a big difference in your overall return.

4) Passive investment - When investing in individual stocks or mutual funds it is important to keep your eye on the market and up-to-date with current trends. Investing in broad based market indexes takes less stock market knowledge and requires less time to track.

The earlier you start investing the sooner you can reach financial freedom. invest with broad-based index funds that have similar returns to the overall market, because then we are receiving similar returns while hedging our portfolio - again, investing for young and beginning investors is all about diversifying to improve your chances for financial success.

How do I invest? There are two ways for young investors to begin investing in broad market indexes. Both are similar in their returns; but they are different in how the index is bought and have different fee structures.

* An Index Fund is a mutual fund that purchases the stocks that make up an index in order to match the returns of the overall market. For example, if investing in an S&P index fund, that mutual fund would own all the 500 stocks that make up that particular index. Index mutual funds may require a minimum investment, but some can be waived with a direct deposit investment plan that automatically invests money every month from your account. Typically, fees on index funds are higher and there are minor restrictions on when you can sell.

* An Exchange Traded Fund (ETF) is similar to an index fund, with the benefit that ETF’s can be bought and sold similar to an individual stock. An illustration of an ETF is the “Spiders” (American Stock Exchange: SPY symbol). Each share of a spider contains one-tenth of the S&P 500 index, and so trades at roughly one-tenth of the S&P price. The management fees on ETFs are low. In addition, there are fewer restrictions on the purchase and sale of ETF in comparison to index mutual funds.

Whether investing in ETF’s or broad based index mutual funds you receive similar benefits however with ETF’s you may have lower fees.

The earlier you start investing the bigger advantage you will have. Because there is only a minimal amount of money necessary to start and a low level of knowledge needed to invest - broad based market indexes will allow you to start investing young. So quit working for every dollar and get your money working for you.

Vince Shorb, the leading financial literacy advocate and author of ‘Financially Free by 30′ gives young adults practical investment strategies they can use now to achieve long-term benefits. Visit http://www.FreeBy30.com now for his free 5 step video course visit.

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by Jim Canter
How you use it can be critical to your trading future.

Stop loss orders are great insurance policies that cost you nothing and can save you a fortune. They are used to sell or buy at a specified price and greatly reduce the risk you take when you buy or sell a futures contract. Stop loss orders will automatically execute when the price specified is hit, and can take the emotion out of a buy or sell decision by setting a cap on the amount you are willing to lose in a trade that has gone against you. Stop loss orders don’t guarantee against losses but they drastically reduce risk by limiting potential losses.

With my system the only stop I use is what I call an emergency stop. My stop loss is automatically made when I make my initial trade at two points. It is only for emergencies, like news I wasn’t expecting, or anything that will make the market gyrate drastically and I never enter a trade without it. However I never expect to use this stop loss to exit my trade. I simply will not let the market move against my trade entry more than a tick or two. If I find that I exited the trade too soon I just reenter the trade but if the trade continues to move against me I have saved the loss of one or two points per. contract. Usually I will only have to exit and reenter a trade one time if I have entered a trade to early. This means I only lose a small commission per contract instead of fifty dollars per point- per contract, when trading the e-mini, and taking what many consider
a normal loss.

Trading the futures markets is a challenging but profitable opportunity for educated and experienced traders. However it is not easy, without a great trading system, and even traders with years of experience still incur losses. Finding a good trading system and trading in small increments with an emergency stop loss in place will allow those relatively new to futures trading to be successful. Once you have learned the skills you need to trade with consistent profits it will not be a problem but until that time it is absolutely critical that you do not take unnecessary losses. If you are new to trading futures you should never trade until you have a mentor with a trading system that gives you consistent profits.

A great way to protect profits if you have not established an exit strategy is the trailing stop. The trailing stop loss is an order that is entered once you enter your trade. Your stop price moves at a specified distance behind the market price. Trailing stops are raised when a price rises, in a long trade, but will remain stationary when it falls. Trailing will only occur when the market price moves in favor of the trade to which the order is attached. The trailing stop order is similar to the stop loss order, but you use it to protect a profit, as opposed to protect against losses. Trailing stops are designed to lock in profit levels and they literally trail along your increasing profit and adjust your stop loss levels accordingly. Often traders will find tailing stops confusing because they change them while in an open position. This is not a wise practice, and should be avoided. It is an indication that you are not sure of your trade and if one is not sure of a trade it would be wise to exit immediately. Trailing stops are ideal because they allow for further profit potential to enter due to momentum, while limiting risk. Trailing stops are an important component to a trader’s risk management unless they have an exit strategy in their system that might serve them better.

The market order is the simplest and quickest way to get your order filled to enter a trade or to use as a stop loss. A market order is a trade executed at the current market price and they are often used to exit trades to ensure that the order has the best possible chance of execution. A market order to exit is simply an order used to exit the trade immediately. Be aware that in a fast-changing market sometimes there is a disparity between the price when the market order is given and the actual price when it is filled.

Stop loss orders are used to exit trades, and are always used to limit the amount of loss, but some day traders use them as their only exit, while other traders use them as a backup exit only. If one uses them as their exit they will risk more than is necessary and might want to find a better system to trade. Stop loss orders allow you to define your risks before you open a position and in my opinion that risk should be minimal. Stop loss orders are one of the easiest ways to increase your chances of survival when trading commodities and futures and they are a powerful risk-management tool

Jim Canter is a day trader and developer of The Precise Day Trading System, reading charts without the use of indicators. For further information go to.. http://www.futurecommodityonlinetradingsystem.com

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by Tom Wheelwright
First, I would like to thank everyone for their interest in the first part of this article - “The Fast Track to Your Financial Freedom (Part 1) - Leveraging your Money”.

Now, you may now be thinking that this whole idea of leverage is great and earning $81,000 on a $20,000 investment over seven years would be terrific. The problem with this is “IT’S STILL TOO SLOW.” We can still do much better. Besides leverage, we need to add the principle of VELOCITY. Here’s how it works:

In the first year, the investor takes the $20,000 and buys the same $200,000 home as previously illustrated in The Fast Track to Financial Freedom (Part 1) - Leveraging your Money. The home still appreciates at 5% each year and the rents on the home cover the expenses of owning the homes, including the mortgage payment.

After two years, this home will be worth approximately $220,000. Instead of letting that appreciation sit and accumulate, the investor borrows it out and buys another $200,000 home. How is this possible? Quite simply, the investor puts a second mortgage on the home in an amount equal to the appreciation. The rent is raised just enough to cover the interest on this additional loan. (Most landlords raise the rent at least every two years.)

The second home also is rented out and appreciates at 5% per year. Every two years, the appreciation for each home the investor owns is borrowed out and used to buy new homes.

By doing this, at the end of seven years the investor will own eight homes with a total value of $2,020,000 and equity of $273,000. This is compared to equity of only $101,000 if the investor only bought the first home and compared to equity of $39,000 if the investor had relied on the compound interest from mutual funds. This is what we call VELOCITY. Velocity of money is simply the process of continually moving money into new and better investments.

At a net equity of $273,000 the investor has more than thirteen times their original investment in seven years. This is so much better than compound interest that most people have a difficult time believing it.

When I do this demonstration in a seminar, there is always at least one person who will not believe it is possible. At that point, I ask the audience if anyone has ever put the concepts of leverage and velocity into practice. Invariably, someone raises their hand and explains that in actual practice, it has worked much faster than what I have demonstrated, because of the very conservative nature of this demonstration.

You probably would be thrilled with this level of returns. Our clients at ProVision would be disappointed in a value of ONLY $2 million at the end of seven years from a $20,000 investment. Why? Because, this return does not factor in any of the tax benefits from investing. Tax benefits, when properly taken, CAN DOUBLE YOUR INVESTMENT. Here’s how.

Let’s go back to our example. Suppose our investor is in a combined federal and state tax bracket of 35%. Suppose also that our investor has excellent tax advisors, like those at ProVision, who understand the MAGIC OF DEPRECIATION.

Depreciation, quite simply, is a non-cash deduction each year for a portion of the purchase price of the rental real estate. This deduction will put a considerable amount of money back into the pocket of the investor.

Suppose that the investor takes the tax savings from the depreciation and uses it to purchase additional single-family homes. And just like the other homes, every two years, the investor borrows out the appreciation and buys another homes. At 10% down and 5% annual appreciation, with just the original $20,000 investment and the tax savings from depreciation, at the end of seven years, the investor will own the following:

- 16 homes with a total value of $4,200,000

- Net equity of $540,000, or roughly double the net equity of $273,000 without the tax benefits

- Annual appreciation after the seven years of $210,000 per year

- All with a single initial investment of $20,000

So let’s recap. If the investor had listened to a typical financial advisor, the investor would have invested $20,000 in a mutual fund and, with a very good market, would have $39,000 at the end of seven years. On the other hand, if the investor had used the concepts of leverage and velocity, including tax benefits, the investor would have $540,000 at the end of seven years and a portfolio worth over $4 million.

What’s amazing about the concepts of leverage and velocity is that they are not limited to real estate. They work equally well in business and in the stock market. But if these concepts are so great, why doesn’t’ the average investor use them? The answer is simply, KNOWLEDGE AND EFFORT.

There is one final factor - EFFORT. It is easy to give your money to an investment advisor and it is easy for the advisor to put the money in a mutual fund. It is not nearly as easy to gain the knowledge necessary to put the concepts of leverage and velocity to work in real estate, business or the stock market. It takes effort, both from the investor AND from the investor’s advisors.

Warmest Regards,

Tom

Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients on wealth, business, and tax strategies. Along with his frequent seminars on these strategies, Tom is an adjunct professor in the Masters of Tax program at Arizona State University. For more information, visit http://www.provisionwealth.com.

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