learn forex first

Back in 1997 major financial slump rocked number of countries in Asia, an event that became known as “Asian currency crisis”. Effected countries included Taiwan, Thailand South Korea and others. One of the memorable comments of the time came from one of leading Thai politicians. He blamed this whole mess on speculators, with George Soros being the main culprit. The remarks went so far as to public statement of “not being able to guarantee his safety if he visited Thailand”. Quite ominous.

The fallout in South Korea was brutal. The US Dollar has about doubled in value against the Won, with USD-KRW moving from just above 800 in early 1997, to 1600 by the year’s end. Local stock market suffered similar fate, as did all areas of economy. Perhaps most telling was an enormous spike in unemployment, as the jobless rate soared to almost double digits, with about 9 million people out of work.

This author observed the aftermath first hand, during one of his business trips to South Korea at that time. Collapse of once high flying conglomerate Daewoo under burden of debt. The sight of many construction projects suspended or stopped all over Seoul and Pusan. Daily failure of scores of small business. It was good time to visit South Korea, due to low prices, but very difficult period for residents.

The country has rebounded nicely since then and became one of Asia’s most dynamic economies. KRW strengthen considerably reaching level 900 against USD in 2007. The stock market has recorded double digit gains in four of the last five years, gaining 32% in last year alone. Korean companies like Samsung Electronics Co, and Hyundai Motors Co, have established themselves as some of the world’s leading corporations.

Things have changed in 2008. Challenges like high oil prices, inflation, external debt and account deficit have shaken investors confidence. While many countries have seen outflow of funds into the dollar, this process became especially painful in South Korea. The Won has become the Asia’s worst performing currency, loosing 20% to date. Stock market was no better, falling 25%, with farther sell off of equities expected.

These developments created widely spread comparisons to situation from 1997 and were quick to be picked by the press. International Monetary Fund disagrees with this assessment and expressed confidence by saying that South Korea is a mature and resilient economy with country’s fundamentals much stronger than a decade ago. Korean financial authorities, however, felt obligated to act by intervention on Wons behalf in the open market. This seemed to stop the bleeding for now.

What can be expected next? In all reality, 1997 type sell off is extremely unlikely. As South Korean economy is cooling down together with the rest of the world, Seoul might not be able to stop bleeding of the stock market but there is one thing they can do- keep intervening on behalf of its currency. Unlike before, there are huge foreign reserves, about 250 billion dollars worth of, and they can be used to support Won.

Very likely scenario, as of this writing, is continued fall of Korean equities, in tune with broader stock declines. The Won should also keep dropping, but in much more measured and steady pace. Central Bank has not mentioned what the comfortable level for USD-KRW is, but as we noticed over last few years, major trends are very powerful and can go through any “line in the sand’ drawn by anybody.

Current rate is around 1150. Even with expected interventions, Won can easily weaken to 1300 and maybe 1400, but far short of the previous low of 1600. Also, one shouldn’t look for a fast move, but rather steady depreciation, lasting a year or two. This is not a situation for active traders, but for those who prefer longer term positions current development might present good opportunity for farther selling of KRW.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

Market knowledge and ability to understand analysis will only get you so far in Forex trading, but without the nerve to actively compete risking your own money in the process you can never become a successful trader.

Wagering huge volumes of money in a market as susceptible to change is liable to cause a whole range of opposing emotions; fear, excitement and anxiety just to name a few. Battling against your emotions in order to complete a successful deal is one of the major hurdles, which must be overcome if you are to become a trader able to close huge deals and earn vast sums of money. If you can overcome or even use these emotions to make trades on the Forex then a successful career may be beckoning, but failure to do so will almost certainly cost you a substantial amount of money and end any lingering desires to progress in the busy world of exchange rate trading.

Initiating and closing a trade at the right times are the backbone of becoming a successful Forex trader. If a person cannot execute these deals at the right times, the psychological and financial damage can be crippling. Missing a huge trend or sitting too long on a good price, can be a demoralising experience, but one that many will encounter during a career in Forex trading.

Entering at the right time is just one thing that must be done correctly, but if you are unable to leave at the right time or hold your nerve during the course of the trade, the implications are potentially severe. For example accepting a small loss just before the market rises can lead to a horrendous huge profit/loss ratio margin. Similarly sitting on a currency price that is plummeting for too long could be financially crippling. Understanding the Forex market and having faith in your ability to judge a trend will pay dividends if you hold your nerve, backing out at the wrong time can prove to be a catastrophic misnomer.

The fear generated by investing your own personal money is the main thing that must be overcome. It is the culprit in so many failure stories, people who just couldn’t overcome their anxiety investing unwisely, pulling out at the wrong time, missing a rise completely, all result in failure and are caused by fear. Accepting this fear, and using it to your potential will make you a stronger trader, able to trade freely and enjoy the thrill of the exchange. Fighting it will get you nowhere, understanding and overcoming it are the best remedies to this baseless emotion.

Trading strategies will help you ride out the rough times and capitalize on the good ones. Sometimes just taking a step back and accepting a few losses will give you the energy and the knowledge to attack the Forex with renewed vigour, and make some serious profits. Accepting that sometimes you will lose out, you need to be able to take the hits and roll with a punch, there are no guarantees in the trading market, so being able to move on and start again is a skill that is paramount to generating success.

Analysis and charts can only get you so far. You must first master these things, and be able to correctly interpret the figures that are represented in order to spot the trends and make your move. But this all means nothing if you don’t have the courage of your convictions. If you are too afraid to buy and not sure when to sell then a glittering career in market trading is likely to elude you. ‘The trend is your friend’ but it means nothing if you firstly can’t spot it and secondly don’t have the courage to back it. Knowledge, strategies and overcoming fear may well be the 3 best ways to become to unlock the door to becoming a successful trader. Without all 3 you will more often than not become unstuck, so prepare, practice and evaluate everything before taking the plunge in the complicated world of Forex trading.

Michael J Campbell is the Webmaster for Forex Fusion, a Free Online Forex Trading Information & Resource website. Forex Fusion has a great section on Forex Education, for those who need to brush up on their forex skills.

How many business owners take out the time to review and analyze their bank statements, daily? When we perform accounting tasks we basically record data from the bank statement and perform reconciliation to our cashbook or ledgers.

Evaluating transactions on a bank statement is a completely different exercise from accounting for the respective items. Businesses lose thousands, due to failure to review the transactions on their bank statements, regularly.

Payments

When payments are reconciled, we compare amounts in our books to transactions on the bank statement. The payments however have to be verified as well. A discrepancy will be identified immediately when our numbers differ from the statement amount, which is one objective of the bank reconciliation. But what if the amount agrees with the bank statement, but the check was never verified. A bookkeeper or admin person could have just slipped the check under your nose, and you could have inadvertently signed the check, without really authorizing it. This happens, especially for a range of small checks, (a huge amount will catch the signatories attention immediately) and where various people deal with preparing the check, and the owner only signs.

Standing orders and bank charges

How many “deductions” on a bank statement go undetected? Anyone who gains access to your bank account details can draw on your account. The culprits range from legitimate companies to con artists.

Big companies sometimes commence deducting amounts prior to the agreed date. On many occasions standing, debit or stop orders, are not even signed, but amounts are withdrawn. Experienced business owners will deal with such problems immediately, but others will overlook this sad state of affairs. Stop and reverse payments at your soonest.
Scams are the other strategy employed by many crooks to extract cash out of your accounts. Fraudulent e-mails by people purporting to be from the bank, requesting a verification of your bank details and passwords, if you use Internet banking. If an account number (and password) is supplied, huge amounts can be withdrawn, and by the time, you identify the problem, it could be too late.

Bank charges

If your business make use Internet banking, a bank is not supposed to levy balance or statement enquiry fees. Banks tend to charge for the silliest of items. Loyal bank clients are entitled to a substantial reduction of bank charges. When you see those huge bank charges contact your banker. Also verify whether your bank is charging interest, when a loan or overdraft facility on your account is not in place..

Deposits

A common scam worldwide is the “mistaken” deposit of huge amounts into innocent business account. The crooks than call to demand a refund of this amount, and their mistaken deposit will bounce, leaving the business cash strapped, if they refunded. A further problem, is that they also possess you bank details, and can withdraw amounts. Know your customers, and have proper arrangements for payment. Insist on referenced deposits only.

The only way, you will stay abreast of your cash is to review your bank statements daily. Preferably on an Internet site. Printouts at tellers could be a costly affair.
Remain vigilant and you could save your business substantial sums.

Our firm specialises in small business consulting, including cashflow management, business formation and entrepreneurial advice to an international small business community.
Sean Goss
website: http://www.sgafc.co.za