Thursday, January 7, 2010

Need Investors Or Venture Capital? Top 5 Things To Know First

Posted by fahad at 6:37 AM





Need Investors Or Venture Capital? Top 5 Things To Know First


Starting a new business can be tough. There are so many things to look at, so many things to consider. Of course the next thing you must have is capital. However, how do you go about this and what should you know before approaching lenders? The following are five things that lenders and/or investors are looking for before they will consider lending or investing in your business.
One thing they are looking for is an exit strategy. This may be something you never expected to hear but it is actually a top thing that they look for. You may not even have thought about it at this point, but it is very important to investors to have some idea where you are headed in the long term. By planning for an exit strategy you are showing your investors that you are confident in the return of the money that they are investing. They are looking for approximately a tenfold return in five years. One of the most common ways of implementing an exit strategy is through acquisition. A bigger company buys out meaning your company sometime in the future. For example Google bought out Web 2.0. Of course there is also the possibilities of going public or liquidating the company too. In the end hard data and facts is what will persuade the investor. So remember to research.
Another area that investors are looking at, are entry barriers. Meaning they want to know what safeguards are in place in order to prevent competitors from coming in and making off with your idea? How have you set up for this possibility? Are you prepared for this possibility? Some examples of entry barriers include patents, legislation, and the uniqueness of the product. Having strong entry barriers, barriers that keep competitors from entering the marketplace with a reasonable replacement of your product, will help you have a greater hold on the market in which you are competing. Having a greater hold of the market means more profits and more of a return in the investor’s eyes.
While being able to keep competitors away from your ideas is great, you also want to be able to show the investors similar products or services. At the very least, let the investors see how well something similar has done on the market. This gives them some confidence in how well your idea may or may not work in the long run. Being to different can be a hindrance, though you can still get funding, investors want to see some proof and comparing to similar ideas can help show them this.
Some investors, especially venture capitalists, will want to know if you have any existing revenue to start with. This will help protect you in the long run, especially if you are working with venture capitalists that will end up owning most of the business in the end. Having some revenue at the start will help protect your hold in the company. Of course the biggest thing that investors and lenders alike are looking for is how much and for what reason(s) do you need the money? This requires some real hard research on your part. To know exactly how much you will need requires a lot of in depth research into how much everything will cost, down to the most minuscule detail. Being accurate will save everyone a lot of trouble in the long run. You will also want to know exactly what each cent of the costs is going to. The investor or lender looks for someone who has this well planned out. Having a full financial plan written out is a great idea before approaching a lender. Some things you don't want to forget to list are operating expenses, marketing and any legal fees that may be appropriate.
Now that you are armed with the basics needed before approaching a lender, you will find yourself with a lot greater rate of success. The most important things to remember is that a lot of hard work and research can pay off in the end. Research all the details needed to start your business. Make sure you write a thorough and complete business plan that the investors can see and follow these guidelines and you should have that capital you need in no time.

 


 

Labels: 0 comments

Costly Mistakes Forex Beginners Make

Posted by fahad at 6:35 AM





Costly Mistakes Forex Beginners Make







Making mistakes is a natural part of any learning process. However, when you are learning about investing and trading, mistakes can turn out to be expensive. Though experts and novices can make mistakes alike, research shows that having a good understanding of how the market operates can help avoid costly mistakes.




When learning to trade on the Forex mistakes can lead to large profit losses. Experts have identified some of the most common errors made by new traders. Knowing about mistakes that others have made will hopefully prevent the same blunders by other traders.




One of the biggest mistakes that beginners make is to use too much margin when trading on the Forex. Margin is defined as the use of borrowed money to purchase securities. Traders often make the mistake of viewing margins as free money; this thinking can lead to costly mistakes. While using margins can help traders achieve large profits, they can also result in significant debt as well. Traders should only use margins to invest if they have the time and ability to keep careful watch over their trades.




Beginners often make the costly mistake of making trading and strategy decisions based on unreliable tips. Be weary of tips that you overhear, read on the Internet, or see on television. They can be the real deal, but more often than not they will lead to losses. If you hear of something that sounds interesting, the best thing to do is bring the information to an experienced broker and let them research the validity of the tip.




Another common mistake that can be an expensive learning experience is underestimating your trading abilities. New investors may be unsure of them selves and feel they do not know enough to make educated decisions about possible trades. As a result they may pass up opportunities or wait to long before acting. This may end up cutting their profits significantly. If they would have maintained confidence in their trading abilities they would have not hesitated and probably made more money.




To avoid making this mistake, you should learn as much about the Forex market as you can before opening an account and beginning trade activities. Doing adequate research ahead of time can build the confidence needed to make successful decisions in the foreign exchange market.




Another expensive mistake that traders make is not having a good understanding of how the market operates. This means knowing the terminology and characteristics that make the market what it is. Beginners have many options on how they can increase their levels of awareness about crossing currency. They can go through a financial institution or knowledgeable broker. In addition, new traders can learn how to trade on the forex by using free tutorials available on many websites. The Internet is a great way to get trading practice using the complimentary demonstrations available online. It is a good idea to take advantage of these free services before actually opening an account and making a trade. Mini accounts are also available. These allow you to get your feet wet with smaller initial investments than a regular account would. Keep in mind that the forex has great potential to be profitable if you have an idea of how it works.




Another common mistake is assuming that buying and selling currency when the exchange rate is low will automatically result in profits. You should avoid making trades based solely on the exchange rate. Most of the time there is a reason that the rate is low and you should do ample research examining all factors that are affecting the dropping rate.







 


 

Labels: 0 comments

Forecasting The Forex Trading Market

Posted by fahad at 6:33 AM





Forecasting The Forex Trading Market


 




For those who trade using the Forex, or foreign currency exchange, knowing how to forecast the Forex can make the difference between trading successfully and losing money. When you begin learning about Forex trading, it is vital that you understand how to forecast the Forex trading market.


There are two major methods that are used when forecasting the Forex. Each system is used to understand how the Forex works and how the fluctuations in the market can affect traders and currency rates. The two methods that are most often used are called technical analysis and fundamental analysis. Both methods differ in their own ways, but each one can help the Forex trader understand how the rates are affecting the currency trade. Most of the time, experienced traders and brokers know each method and use a mixture of the two to trade on the Forex.


The first method used in forecasting foreign currency exchange is called technical analysis. This method uses predictions by looking at trends in charts and graphs from past Forex market happenings. This system is based on solid events that have actually taken place in the Forex in the past. Many experience Forex traders and brokers rely on this system because it follows actual trends and can be quite reliable.


When looking at the technical analysis in the Forex, there are three basic principles that are used to make projections. These principles are based on the market action in relation to current events, trends in price movements and past Forex history. When the market action is looked at, everything from supply and demand, current politics and the current state of the market are taken into consideration. It is usually agreed that the actual price of the Forex is a direct reflection of current events.


The trends in price movement are another factor when using technical analysis. This means that there are patterns in the market behavior that have been known to be a contributing factor in the Forex. These patterns are usually repeating over time and can often be a consistent factor when forecasting the Forex market. Another factor that is taken into consideration when forecasting the Forex is history. There are definite patterns in the market and these are usually reliable factors. There are several charts that are taken into consideration when forecasting the Forex market using technical analysis. The five categories that are look at include indicators, number theory, waves, gaps and trends.


Most of these can be quite complicated for those who are inexperienced using the Forex. Most professional Forex brokers understand these charts and have the ability to offer their clients well-informed advice about Forex trading.


Another way that experienced brokers and traders in the Forex use to forecast the trends is called fundamental analysis. This method is used to forecast the future of price movements based on events that have not taken place yet. This can range from political changes, environmental factors and even natural disasters. Important factors and statistics are used to predict how it will affect supply and demand and the rates of the Forex. Most of the time, this method is not a reliable factor on its own, but is used in conjunction with technical analysis to form opinion about the changes in the Forex market.


When fundamental analysis is used to forecast the Forex, it is important to remember that this method only focuses on what should happen in a certain market based on current events. Unlike technical analysis, it does not look at trends or the history of the market to make a forecast. It looks at current supply and demand, seasonal cycles, weather and the current state of the government all over the world.


For those interesting in being involved with Forex trading, a basic understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help Forex traders be successful with their trading. Most experienced traders and brokers involved with the Forex use a system of both technical and fundamental information when making decisions about the Forex market. When used together, they can provide the trader with invaluable information about where the currency trends are headed.


# # # # #





 

Labels: 0 comments

Successful Forex Market Trader Tips

Posted by fahad at 6:31 AM


  




Successful Forex Market Trader Tips







Forex trading on the internet is the quickest way to use your investment capital to its maximum. The foreign exchange markets can offer certain advantages to the smaller and larger traders, thus making the foreign exchange currency trading more preferable than the other markets such as stocks, options and all of the traditional futures. Here are some of the top reasons why you will want to use the forex trading on the internet, in order to become a more successful forex market trader.




1. Forex is the largest market, trading at a volume of almost two billion, giving forex traders virtually unlimited flexibility and liquidity. That’s over three times larger than the equity market and over five times larger than futures.




2. Forex trading can fit into anyone’s schedule because it is available on the internet 25 hours a day, 7 days a week. There is no waiting for markets to open; they are always open day in and day out. This flexible schedule makes the forex market extremely attractive to those professional and potential traders and investors.




3. Forex trading on the internet encompasses buying one currency while simultaneously selling another currency; therefore you have an equal opportunity to make a profit no matter what direction the currencies are heading. Another great advantage to consider is that there are currently only fourteen pairs of currencies to trade. Compare those fourteen currencies to the thousands of stocks, options and futures when you’re considering the pros and cons of delving into the trading game.




4. Investors and traders are flocking to the forex internet trading as a way to gain a higher leverage to their investments. Some brokers even offer margin ratios of 200/1 in open forex trading accounts. There are also those mini-forex accounts that can be opened for a minimum of $200, offering a margin of 0.5%, where $50 in trading capital will control a ten thousand unit currency position.




The forex prices are often predictable, allowing the currency prices to create trends that can be followed to allow the technically trained forex trader to able to spot, and even take advantage of, the many entry and exit points. One of the best parts about forex trading on the internet is that there is no charges for commissions, any exchange fees or any other hidden fees. The forex market is a very easy market to research the countries and currencies involved. The only fees come from the forex brokers, who only make a very small percentage of what the bid/ask price is. Plus, there is no need to calculate any commissions or fees when completing a trade and your transactions are made a confirmed within seconds. Also because this is all done electronically, with no people involved, there is not much that can slow you down.




For the newbie’s in the forex trading game, you will need to know the forex terminology. Here is a list of some basic terms and concepts you will need to know in forex trading:




Spot Market - The market for buying and selling currencies that are usually for settlement within 2 business days, also known as the value date. For example: USD/CAD = 1 day.




Exchange Rate - This is when the value of one currency is expressed in the terms of another. For instance, the EUR/USD has an exchange rate of 1.3200, and then 1 Euro is worth 1.3200 USD.




Currency Pair - All currencies must be sold in pairs. There are two currency’s that make up an exchange rate, so when one currency is bought, the other is simultaneously sold and vise versa.




Base Currency - This is the first currency in a pair.




Counter Currency - This is the second currency used in a pair. The counter currency can also be known as the “terms” currency.




Broker - This is a firm that will match a buyer to a seller for a small fee or commission.




Sell Quote - This quote is normally displayed on the left side and represents the price that you can sell the base currency for. The sell quote is also referred to as the “bid” price. For instance: EUR/USD quotes 1.3200/03, and then you can sell one Euro for 1.3203 USD.




Buy Quote - This quote is normally displayed on the right side and represents the price that you can buy the base currency for. The buy quote is also referred to as the “ask” or “offer” price. For instance, EUR/USD quotes 1.3200/03, and then you can buy one Euro for 1.3203 USD.


 

Labels: 0 comments

Top 4 Forex Trading Strategies For Everyone

Posted by fahad at 6:29 AM





Top 4 Forex Trading Strategies For Everyone







Forex stands for foreign exchange and refers to the trading of foreign currencies. Unlike other markets the foreign exchange does not have a physical, centralized location for activity. The trading is done directly between banks, foreign currency dealers and also with foreign investors. As a result, the foreign exchange trades are considered “over the counter”. The trading then takes place through the use of computer terminals, telephones and broker desks.




The foreign exchange market is the largest and most liquid in the world. Its trades total $2 trillion every day. However, up until recently the transaction sizes and financial requirements kept this market out of the hand of small individual speculators. Currently the market requires a minimal amount of capital, making the foreign exchange market available to just about all investors. There are four basic trading strategies that should be followed by beginners in the Forex market.




First, you should develop a foreign exchange trading system that you can stick with. Having a decent strategy is not enough you need a well-developed system to effectively implement your strategies. You should start by creating a schedule of when you will do your Forex trading. Next, create on organized budget to keep track of the inflow and outflow of your money. It’s important to understand that Forex trading, like any business venture, will have its peaks and slumps. You should be prepared to stick to your system despite these fluctuations to maximize profits in the long run.




Your system should be planned in advance in order to be effective. Before the market opens you should have an investment plan in place. You should consider any trade, no matter how small as a critical part of your systematic approach to Forex success.




Next, you should anticipate small losses. Know matter how well you know the market or how long you have been a trader you will probably encounter small losses. You need to expect and accept these losses as small components of a larger plan. Be ready for these small losses and put them aside in anticipation of acquiring greater returns in the future. The key to long term success in the Forex market is patience.




Another helpful hint for beginners is to avoid Forex strategies that you do not understand. You should do your research ahead of time and draw on the information from useful Forex guides and tutorials. It is important to be cautious of Forex scams. There are numerous scams popping up where companies offer to do your trading for you, these are the ones you should avoid. You should develop your Forex methods with an expert and only make trades on your own or through a licensed broker. The bottom line is making sure that you are fully aware of all aspects of your strategy and are comfortable with the risks and benefits.




Lastly, make sure you have an exit strategy planned out. Though you should expect small losses, you need to be able to recognize when you are in to deep. Before you jump into the Forex market you should set yourself limits on how much you plan to invest. One you determine the amount that you plan devote to your Forex trading do don’t surpass you limit. Be able to cut you losses once you realize the situation will not get better.




Though Forex trading can be very lucrative you need to take the time and effort to develop a strategy that will be effective for you. Even as a beginner you should start practicing good trading habits that will make you Forex trading ventures prosperous. Forex trading can be profitable without inducing stress.




# # # # #


 

Labels: 0 comments

Subscribe to: Comments (Atom)