Saturday, July 4, 2015

Six Tried-and-True Principles for Any Investor

Disclaimer: This article came from Allianz USA for reference purpose only. for more information visit: http://www.allianzusa.com/investments/investing-insights/timeless-investing-principles/

As investors, it's important that we never stop learning because markets never stop changing. But having a firm grasp of some investing fundamentals can help you set realistic goals and stick to your financial plan.

The professionals at Allianz Global Investors have compiled this set of time-tested investing principals which they've used to guide their success:
1. Keep a Long-Term View
Keep in mind the historical returns of different asset classes when setting your financial goals. For example, stocks and bonds have returned about 8% and 7% annually over the past 20 years.* Treat any outperformance as a bonus. Remember — time is your ally! By focusing on long-term results, you'll find it easier to ride out short-term volatility.

2. Be Disciplined
Often the most successful portfolio managers are those that follow a proven investment process. The key is that they choose an investment discipline and adhere to it. By establishing a clear financial plan, you'll have a logical framework for your own financial decisions.

3. Invest Responsibly
Define your objectives and risk tolerance, and consider them hard-and-fast parameters. While making big bets can sometimes reap big rewards, they often lead to steep losses instead. Smart portfolio managers always seek to optimize the balance between risk and reward.
4. Understand What You Invest In
If you can't explain in simple terms why you're investing in a particular security, you should rethink the investment. And you should always have a clear understanding of any risks involved. Your financial advisor should prove an invaluable resource along these lines.

5. Stay Diversified
No one can predict the next top-performing asset class. That's why the importance of asset allocation is virtually undisputed. To achieve broad diversification, you should invest your assets across different sectors and industries as well as different asset classes. Remember to periodically rebalance to target the proper mix. Keep in mind that diversification does not ensure a profit or protect against loss in declining markets.

6. Know the Value of Professional Advice
An increasingly complex investment climate has made it challenging for investors to try to go it alone. That's why more and more investors are turning to professional management. A financial advisor can also help you construct a solid financial plan, make sound investment choices and guide you through times of volatility.


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Friday, July 3, 2015

Tips to Help You to Succeed in Currency Trading

So many people fail in trading Forex. But you don’t have to. Some people ask me if there any rules to become a successful trader. When I think about my trading I clearly see 20 rules that if followed can make you consistently profitable trader. Some of them you probably know. The only thing is left is to implement them in your trading.

1. Plan your trades and trade your plan.
It is absolutely necessary to have a plan so you know what you will do in such and such market situation. In fact the lack of planning ahead probably the biggest reason of failure of most traders.

2. Fear and hope are the two worst enemies for trader.
You need learn to control your emotions. Not to get rid of them. They are actually engines that keep you going. However engines that go out of control are very dangerous.

3. Always keep the records of the results for your trading.
If you want to repeat your successful trades over and over, if you want to avoid failure you went through, then you need to keep track of your decisions and actions. That’s why you need to record all your trading results.

4. Keep the positive attitude regardless of the results of your trading.
Result of a single trade mean very little. The long term result is what you are looking at. Therefore keeping the positive attitude no matter what the result of a current single trade will help you to move over it to the next more profitable one.

5. Think about Forex only when you are trading.
In order to succeed in Forex you need to learn to focus. Whatever you do focus on it. That means if you are not trading focus on whatever you do and forget about the market.

6. Stop-loss is the key to your success in trading. Always cut your losses.
The golden rule of traders states: never-ever trade without stop loss orders. If you do it’s a surest way to lose your trading account entirely.

7. Always devote your time to study the market.
Set up aside certain amount of time to go through the price charts and economic news to better understand the price movement.
8. Always set your profit limit in each trade.
The same as with stop loss orders you need to know your profit target for each trade. I had so many potentially winning trades that turned into a losers just because I didn’t have a clear plan for taking profit.

9. Trust your own opinion before entering the market.
Facts are priceless. Opinions are worthless. Those who follow so called “gurus” in trading will never be able to make a significant profit. Take the full responsibility for your actions don’t hunt for opinions just because you are afraid to act upon your own opinion.

10. Keep your stop losses untouched during the trade.
It comes back to the rule number one. Once you have planned your potential risk and placed the stop loss don’t touch it until price reaches the profit target or stop loss. By moving the stop loss your are changing a significant parameter of your trading system. That is the way to turn a winning into a losing one.
Everyone knows that currency trading is a good opportunity to make significant amount of money. At the same time it is the best opportunity to lose even bigger amount of money. I hope the above tips will help you to preserve your trading capital and gradually to grow it. SHARE IT TO YOUR FRIENDS!