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Collateral Analysis |
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Sebastian foss |
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2007-01-22 |
| Word count : |
1166 |
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Collateral or security represents the asset pledged by a borrower against the performance of a credit facility to the effect that the bank (lender) could sell it (collateral) off in the event of default. It would thus appear that collateral reduces the bank's risk when it grants a loan even as it increases the costs to the bank(lender) because of increased documentation as well as the costs of monitoring the collateral. Banks most often than not pass on the documentation costs for security perfection to the borrower. Your one stop Source for secured loans,cheap secured loans ,cheapest secured loans ,compare secured loans ,secured lending,secured lenders can be found here http://securedloansandcollateral.blogspot.com On the other hand, collaterals should reduce the cost of borrowing to the borrower since it reduces the bank's risk, which in turn should reduce the bank's costs and lending rates. The place of collateral or security in credit structuring and analysis remains debatable. This is because of the fact that the best collateral for any loan is the borrower's ability and willingness to repay the same according to one school of thought. Another school of thought however insists that sound banking practices require that certain type of loans should be backed by some collateral at least. This school argues that the collateral aside from providing some psychological comfort would serve as a fall back in the event that the borrower fails in meeting up with its projected cash flow for whatever reason. Experience has however shown that some less credit worthy borrowers especially within the middle market tier may not be able to raise loans without one form of collateral or the other unlike the large blue-chip companies. Thus it would appear that collateral benefits both borrowers and lenders in certain types of loans. In situations where it is expedient to insist on a collateral it would be advisable for the value of the collateral to be higher than the loan amount. This is because of the fact that by the time the loan goes bad such that the lender wants to rely on the collateral, it would then be a case of 'forced' or auction sale. Under such forced sales one can only realize a percentage of the initial value of the collateral even before deducting costs associated with the auctioning exercise. Some types of loans collateral may be unnecessary particularly for very short-term loans that are made to large credit-worthy public companies or corporations. For example, a highly credit-worthy multi-national borrowing Ten million dollars as a bridging loan for thirty davs or less tenor to enable it pay duty and clear goods at the port may not be required to offer collateral since the facility will be fully repaid even before the arduous process of collateral documentation and perfection are completed. In practice however, some banks tend to lend unsecured loans to the multi-national blue-chip companies as long as they (multi- nationals) execute a negative pledge over their assets. Banks and other lenders are driven to lend unsecured largely by competition and secondly by their belief that such blue-chips will always meet their obligations either from own cash flow or by refinancing. The negative pledge would ensure that all the lenders to the company are on equal footing such that in the unlikely event that the company defaults on its loan, all the lenders would share the assets of die company on a pari passu basis. It is pertinent to note that negative pledge is not a security per se. While it is advisable to insist on a befitting collateral for loans it is extremely important for the credit analyst to look on to the borrowers cash flow and the collateral for the loan repayment. The collateral should serve as a fall back comfort in the event that the primary and secondary sources of repayment fail. Characteristics of a good collateral The suitability or appropriateness of any item or asset for use as collateral would depend in varying degrees on the following factors relating to the asset: Standardization, durability, marketability, identification, and stability of value. 1. Standardization: Some items especially commodities have been graded, classified or grouped e.g. cocoa beans, ginger, rice, etc to reflect their qualities or standards and hence facilitate their use in trade transactions and/or as collateral. [t would be preferable to use an item that has a standard or grade as a collateral. Aside from eliminating any ambiguity between the parties the lender appreciates the worth and re-sale ability of such asset in the event of default. It also leaves neither party in doubt as to the value of such collateral and hence the amount of loan it can collateralize 2. Durability Durability relates to the ability of the asset to withstand wear and tear for the most part of its useful or economic life. Durable goods are better assets for use as collateral than non-durables. The useful or economic life of an asset should be longer than the tenor of the facility for which it is used as collateral. This is to ensure that the collateral will still be in useful condition and hence saleable from after the maturity of loan. Hence it can still be sold in the event that the borrower could not pay,at maturity of the loan. the craft of credit creation 3. Marketability: This refers to the depth of the market including secondary market for the collateral and determines the ease or chances that the lender will be able to dispose of the asset in the event of default. Thus, assets that lend themselves to wide applications are better collaterals, than specialized equipment with limited use. Similarly assets that have wide secondary or tertiary markets also represent better collaterals than those with little or no secondary market at all. 4. Identification: A collateral that can be identified by unique features or characteristics such as serial number, make, model or marks that cannot be erased are preferable to assets that have no distinguishing features. Also assets that cannot be easily moved such as real estate and machinery and equipment represent better collateral. The essence is for the lender to be able to easily identify the relevant asset that has been pledged to it as collateral even amidst several other assets. An identifiable collateral could frustrate a would-be dubious borrower from swapping another asset for the one originally pledged as a collateral for a credit facility. 5. Stability of Value: Lenders would cherish collateral which market values are not likely to depreciate or drop significandy during the life of the loan. For example cocoa beans would not be as desirable a collateral as a building even for a short-term loan. Also banks prefer assets with ready secondary (resale) market as collateral. Assets that are highly susceptible to rapid obsolescence render older models less valuable. Your one stop Source for secured loans,cheap secured loans ,cheapest secured loans ,compare secured loans ,secured lending,secured lenders can be found here http://securedloansandcollateral.blogspot.com
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Fabiola Castillo |
2007-12-18 |
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Title: Forensic Handwriting Analysis: How is Handwriting Analysis Used in a Crime?
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Criminal investigators have been using handwriting analysis since the beginning of FBI times. In 1932, when the FBI first opened its doors, document and handwriting analysis went hand in hand. Since then, analyzing handwriting has been used in a variety of criminal investigations for crimes in which documents were used. This type of analysis works to pinpoint a perpetrator when little other evidence of "who did it" exists. However, when used in conjunction with other evidence handwriting analysis can create a much stronger case against the accused. Handwriting analysis is a very complex area of study in the criminal law area. The analysis is used to determine if a person has committed a crime in which documents were used, such as ransom notes, letters of intent to harm another, suicide notes, or even in cases of forgery on documents such as letters or a check signature. Analyzing the handwriting on a document for the purposes of a criminal investigation requires a sample of the person's handwriting for comparison. For example, the investigators will require the accused to submit a handwritten document with various styles of writing, which may include cursive or print with like or near similar wording used on the documentation in question. Once having the original document and the sample document, created for comparison, the handwriting analysis begins. You might suspect that the analysis will begin by looking for close similarities in the handwriting style. However, this is not true; instead, they will begin looking for significant differences in the styles. To determine rather the accused could have possibly have written the document, they look for differences within the two handwritten documents. If after the initial handwriting analysis, the investigators cannot conclude that the accused did not write the document, they will analyze the document even further and more thoroughly. So, what are they looking for? How will they determine if the accused did indeed write the document in question? There are several key items they are looking for in the handwriting. Many times the investigators will use a microscope or magnifying glass to analyze the documents. This allows them a closer look at the traits within the handwriting on both documents. In handwriting analysis, they are looking for specific handwriting traits such as letterform, line form, and formatting. Letterform looks at the letter size, slants, and curves, as well as the line connections, slopes, and how a specific letter is written in regards to the beginning, end, or middle of a word. For example, a person may write the letter "e" differently in the middle of a word, than they might at the end of a word. With line form, they are looking at the smoothness and darkness of the handwritten lines. This will tell the analyst the type of pressure applied when the item is written, as well as how fast or slow the document creator writes. In formatting, they are looking at how both document writers space not only their letters, but their words as well. They are also looking for how the writers place their words on the lines, as well as the type of margins left by the author of each document. Handwriting analysis is a very tedious process that must be performed accurately and concisely in order to properly determine if the author is the same or different from the accused. Fabiola Castillo is an online marketer for the website NinjaCOPS.com. Her virtual store specializes in personal defense products where you can buy pepper spray, kubaton keychains, wholesale stun guns, nunchaku technique videos, wireless hidden cameras, expandable steel batons, and many other home security products.
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Mostafa Soleimanzadeh |
2007-10-17 |
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Title: Technical or Fundamental Analysis (Forecasting) - part 2
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Fundamental Analysis must be noticed too. In part one of this article, I noticed some advantages of technical analysis and emphasized that technical analysis is superior to fundamental analysis. At the end of this article, I've put the link to part one. The goal of this article is to explain that you can increase your returns and gains with some knowledge about Fundamental Analysis. Why Fundamental Analysis is needed? One of defects in Technical Analysis is that it's a little slow. It means that the increasing trend of a stock started before, but after some tardiness (maybe after some days) signals of purchase appear in Technical Analysis method. Or for example on the ground of news that company publishes, you could distinguish decreasing trend of stock is starting (with Fundamental Analysis) but decreasing trend's signals appear with some tardiness in Technical Analysis. In Technical Analysis, with notice to the past of stock you could forecast its future. Suppose that a new company who enter in the stock market, There is no past to help us to forecast its future, so you should get helps from Fundamental Analysis. Sometimes, you find a stock in the stock market that it's good to buy with Technical Factors but when you analyze it with Fundamental Factors you find that the price of this stock is too far from its real value and its price is increased like a bubble and maybe there are some manipulations in the stock. Conclusion Combination of these two methods could give you too much advantage and you could increase the return in the stock market. In fact, it's better to know both methods and then choose one of theme as a principal method and use other method as a help. But you should notice that analyze of a stock with Fundamental method takes too much time. Remember that you use this method to complete Technical Analysis, so continue your researches in Fundamental Analysis until your researches in Technical Analysis complete. In other words: Find a stock technically and then be sure that there is no problem fundamentally. Read part 1: Why Technical Analysis is Superior to Fundamental Analysis By Mostafa Soleimanzadeh. Learn how to Invest in the Stock Market by reading Free Tips about Stocks.
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pass dao |
2006-09-12 |
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Two Types of Trading There are 2 types of analysis you can take when approaching the forex: Fundamental analysis and Technical analysis. There has always been a constant debate as to which analysis is better, but to tell you the truth, you need to know a little bit of both. So let’s break each one down and then come back and put them together. Fundamental Analysis Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand. (Yada yada yada.) In other words, you look at whose economy is doing well, and whose economy sucks. The idea behind this type of analysis is that whoever’s economy is doing well; their currency will also be doing well. This is because the better a country’s economy is, the more trust other countries have in that currency. For example, the U.S. dollar has been gaining strength because the U.S. economy is gaining strength. As the U.S. interest rates keep increasing, the value of the dollar continues to increase. And that is what we call fundamental analysis. Later on in the course you will learn which specific news events drive currency prices the most. For now, just know that the fundamental analysis of the forex is a way of analyzing a currency through the strength of that country’s economy. Technical Analysis Technical analysis is the study of price movement. In one word, technical analysis=charts. The idea is that a person can look at historical price movements, and based on the price action, can determine on some level where the price will go. By looking at charts, you can identify trends and patterns which can help you find good trading opportunities. The most IMPORTANT thing you will ever learn in technical analysis is the trend! Many many many many many many people have a saying that goes, “The trend is your friend”. The reason is that you are much more likely to make money when you can find a trend and trade in the same direction. Technical analysis can help you identify these trends in its earliest stages and therefore (did I just say therefore?) provide you with very profitable trading opportunities. Now I know you’re thinking to yourself, “Geez, these guys are smart. They use big words like “therefore”. I can never learn this stuff.” Never fear my friend; you too will be just as uhh…smart as us. By the way, do you feel that green pill kicking in yet? Bark like a dog! http://h1.ripway.com/fallingrain/Forex.php
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H. Crowell |
2006-06-16 |
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Title: Stock Market Analysis
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The return that a stock can provide is often predicted with the help of technical analysis. Stock market trading tips are based on technical analysis of various parameters.
Stock market analysis is science of examining stock data and predicting their future moves on the stock market. Investors who use this style of analysis are often unconcerned about the nature or value of the companies they trade stocks in. Their holdings are usually short-term – once their projected profit is reached they drop the stock.
The basis for stock market analysis is the belief that stock prices move in predictable patterns. All the factors that influence price movement – company performance, the general state of the economy, natural disasters – are supposedly reflected in the stock market with great efficiency. This efficiency, coupled with historical trends produces movements that can be analyzed and applied to future stock market movements.
Stock market analysis is not intended for long-term investments because fundamental information concerning a company's potential for growth is not taken into account. Trades must be entered and exited at precise times, so technical analysts need to spend a great deal of time watching market movements. Most stock tips and recommendations are based on stock analysis methods.
Investors can take advantage of these stock analysis methods to track both upswings and downswings in price by deciding whether to go long or short on their portfolios. Stop-loss orders limit losses in the event that the market does not move as expected.
There are many tools available for stock market technical analysis. Hundreds of stock patterns have been developed over time. Most of them, however, rely on the basic stock analysis methods of 'support' and 'resistance'. Support is the level that downward prices are expected to rise from, and Resistance is the level that upward prices are expected to reach before falling again. In other words, prices tend to bounce once they have hit support or resistance levels.
Stock Analysis Charts & Patterns
Stock market analysisrelies heavily on charts for tracking market movements. Bar charts are the most commonly used. They consist of vertical bars representing a particular time period – weekly, daily, hourly, or even by the minute. The top of each bar shows the highest price for the period, the bottom is the lowest price, and the small bar to the right is the opening price and the small bar to the left is the closing price. A great deal of information can be seen in glancing at bar charts. Long bars indicate a large price spread and the position of the side bars shows whether the price rose or dropped and also the spread between opening and closing prices.
A variation on the bar chart is the candlestick chart. These charts use solid bodies to indicate the variation between opening and closing prices and the lines (shadows) that extend above and below the body indicate the highest and lowest prices respectively. Candlestick bodies are coloured black or red if the closing price was lower than the previous period or white or green if the price closed higher. Candlesticks form various shapes that can indicate market movement. A green body with short shadows is bullish – the stock opened near its low and closed near its high. Conversely, a red body with short shadows is bearish – the stock opened near the high and closed near the low. These are only two of the more than 20 patterns that can be formed by candlesticks.
When glancing at charts the untrained eye may simply see random movements from one day to the next. Trained analysts, however, see patterns that are used to predict future movements of stock prices. There are hundreds of different indicators and patterns that can be applied. There is no one single reliable indicator, but these stock analysis methods when taken into consideration with others, investors can be quite successful in predicting price movements.
One of the most popular patterns is Cup and Handle. Prices start out relatively high then dip and come back up (the cup). They finally level out for a period (handle) before making a breakout – a sudden rise in price. Investors who buy on the handle can make good profits.
Another popular pattern is Head and Shoulders. This is formed by a peak (first shoulder) followed by a dip and then a higher peak (the head) followed again by a dip and a rise (the second shoulder). This is taken to be a bearish pattern with prices to fall substantially after the second shoulder.
Other Stock Market Analysis Methods
Moving Average - The most popular indicator is the moving average. This shows the average price over a period of time. For a 30 day moving average you add the closing prices for each of the 30 days and divide by 30. The most common averages are 20, 30, 50, 100, and 200 days. Longer time spans are less affected by daily price fluctuations. A moving average is plotted as a line on a graph of price changes. When prices fall below the moving average they have a tendency to keep on falling. Conversely, when prices rise above the moving average they tend to keep on rising.
Relative Strength Index (RSI) - This indicator compares the number of days a stock finishes up with the number of days it finishes down. It is calculated for a certain time span – usually between 9 and 15 days. The average number of up days is divided by the average number of down days. This number is added to one and the result is used to divide 100. This number is subtracted from 100. The RSI has a range between 0 and 100. A RSI of 70 or above can indicate a stock which is overbought and due for a fall in price. When the RSI falls below 30 the stock may be oversold and is a good time to buy. These numbers are not absolute – they can vary depending on whether the market is bullish or bearish. RSI charted over longer periods tend to show less extremes of movement. Looking at historical charts over a period of a year or so can give a good indicator of how a stock price moves in relation to its RSI.
Money Flow Index (MFI) - The RSI is calculated by following stock prices, but the Money Flow Index (MFI) takes into account the number of shares traded as well as the price. The range is from 0 to 100 and just like the RSI, an MFI of 70 is an indicator to sell and an MFI of 30 is an indicator to buy. Also like the RSI, when charted over longer periods of time the MFI can be more accurate as an indicator.
Bollinger Bands - This indicator is plotted as a grouping of 3 lines. The upper and lower lines are plotted according to market volatility. When the market is volatile the space between these lines widens and during times of less volatility the lines come closer together. The middle line is the simple moving average between the two outer lines (bands). As prices move closer to the lower band the stronger the indication is that the stock is oversold – the price should soon rise. As prices rise to the higher band the stock becomes more overbought meaning prices should fall. Bollinger bands are often used by investors to confirm other indicators. The wise technical analyst will always use a number of indicators before making a decision to trade a particular stock.
About the Author:- Hunter Crowell is a researcher, marketer, and an avid investor. He is also the creator of Stock Market Trading, a web site setup to help investors find useful and accurate information related to investing in stocks. Visit his site at http://www.stock-trading-explained.com
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Nathaniel Tabares |
2006-05-24 |
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Title: Understanding Forex - #2 - Technical Analysis
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This is a series of articles about The Foreign Exchange Market. You will learn here what Forex is , how it works and how profitable it can be. The whole series contain the following articles . . . 1. What is Forex 2. Technical analysis 3. Fundamental analysis 4. Money management 5. Compound interest Technical Analysis. Unless you are new to trading you probably know already that technical analysis is a method of forecasting future price movement of commodities, securities, etc (in this case currencies) based on chart analysis, pattern formations, technical indicators, etc. Forex can be traded technically and in my opinion it is quiet predictable. No trading strategy will work 100% of the time. That’s why you need proper money management techniques. Anyway, technical analysis is important to determine where the price of the currencies is going, also when to enter and exit positions. There are different technical analysis techniques that you can implement to your trading strategies. I show here how to use technical indicators which is a very common technique among most technical traders. There are many technical indicators. Some of them are more common and useful than others. In my opinion you won’t need dozens of them to know when to enter or exit a trade. It is about quality, not quantity. I think though that it is better to relay on a few indicators than in only one. If you trade based on the signals of only one indicator, you may miss some important information about the market that other technical indicators would reveal to you. By using a few technical indicators instead of only one, you can make more educated and accurate choices. So, I will show you here some very common technical indicators and how they are used to forecast market prices. Remember that technical indicators are the basis of technical analysis systems. You can implement three different aspects to your trading systems. One is technical analysis as I explain here. The other is fundamental analysis. The third one is money management as I explain in my other articles on this series. Common technical indicators and their definitions: 1. Average Directional Index - ADX An indicator used in technical analysis to determine the strength of a prevailing trend. 2. Exponential Moving Average - EMA A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. 3. Moving Average Convergence Divergence - MACD A trend-following momentum indicator that shows the relationship between two moving averages of prices. 4. Bollinger Band A band plotted two standard deviations away from a simple moving average. 5. Fibonacci - There are many Fibonacci indicators like the following . . . a. Fibonacci Time Zones b. Fibonacci Fan c. Fibonacci Channel d. Fibonacci Arc c. Fibonacci Clusters d. Fibonacci Numbers/Lines e. Fibonacci Retracement f. Fibonacci Extensions 6. Relative Strength Index - RSI A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. 7. Stochastic Oscillator A technical momentum indicator that compares a security's closing price to its price range over a given time period. 8. Williams %R In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. You can learn more about these technical indicators and how they are used if you visit www.investopedia.com. Most technical analysis systems combine at least a few technical indicators to forecast the market. I think that proper technical analysis skills are an important aspect of most successful trading systems. You can learn more about Forex and trading systems from my other articles on this series. I covered here important aspects of technical analysis, but most successful trading systems need some fundamental analysis and/or money management too. EasyWebRiches.com © 2006 By Nathaniel Tabares - Visit his website at www.easywebriches.com for more details.
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Harjo |
2006-05-02 |
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Title: Hair analysis test for diagnosis
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The decision of when to perform a laboratory evaluation or a hair analysis test in women experiencing hair loss should be made on an individual basis by the hair restoration specialist. In this article we briefly describe some of the situations where a hair restoration doctor may order lab tests. It is important to note that this is just an overview for your general information so you can understand the reason and the result if you are asked for hair analysis or laboratory tests.
When a hair loss specialist or physician orders some laboratory tests, these hair analysis tests are ordered only after specific clinical information or after observing and carefully evaluating your hair loss. Understanding the basis of these hair analysis tests helps you to understand the cause of your hair loss and also helps you to make an informed decision for a particular hair loss treatment.
While hair loss directly due to a deficiency in a nutrient is believed to be rare, a large industry has developed in recent years based on nutrient "hair analysis". Several clinics and laboratories claim to be able to define a deficiency of a nutrient or vitamin through analyzing a sample of your hair. The Internet enables these clinics and laboratories to advertise worldwide and a quick search should provide you with numerous web sites offering hair analysis.
These investigations have a simple yes - no question, is the drug, toxin, or heavy metal there or not? There is also the advantage that most of the metals and toxins looked for have a fairly stable chemical nature. They are un-reactive compared to nutrients so they are less likely to change with exposure to the environment. With nutrient analysis the laboratory is attempting to define shades of gray - exactly how much of the nutrient is there? This has been shown to be virtually impossible to do. Even sending hair samples from the same donor to different analysis labs yields contrasting results.
Each vitamin and most minerals are present in blood in extremely small concentrations. Blood also contains a great number of chemicals and molecules and many of these tend to interfere with vitamin and mineral tests. For this reason, a procedure like HPLC (high pressure liquid chromatography) that separates the vitamin or mineral from contaminating substances is usually performed prior to conducting the actual test.
Following separation or purification by HPLC, the vitamin or mineral is detected by a color reaction or fluorescence reaction. In these reactions, the amount of color or fluorescence that is formed is proportional to the amount of vitamin or mineral in the sample, allowing the amount of nutrient present in the original sample to be calculated. In the case of some nutrients, the purified factor of interest is reacted with a special chemical (reagent) prior to detection.
Hair analysis helps the hair loss specialist to reach a diagnosis on hair loss. There can be several Causes of Hair Loss in Women and Hair Loss in Men and after a correct diagnosis is made, the correct women hair restoration treatment can be suggested.
This is not to say all hair analysis is invalid. Analysis of hair is a very useful method of defining exposure to heavy metals. A hair analysis can reveal whether a person has had a chronic exposure to chemical toxins in the environment. And of course hair analysis can be used to show that an individual has been using illegal drugs. The test is known as Hair Follicle Drug Testing. These forms of hair analysis are looking for the presence of a particular chemical that is not normally found in hair, or looking for expression over and above that which is known to be safe.
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Abhishek Lodha |
2007-04-03 |
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Title: Self Analysis - Know Yourself
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For the purpose of self analysis, first of all it is very important to know your self as a person. Are you one of your best friend? Self analysis is the adventure of knowing yourself better. your efficiency, your potentials all are revealed through self analysis.
Your Best Friend.
Doubtlessly one of the most neglected friends you have is you yourself. And yet every man, before he can be a true friend to the world, must first become a friend to himself. In this society where abbreviation flourishes in the crowded cities and marts of businesses, few are the men who have not been subjected, on every hand, to a campaign to convince them that they are much less than they think they are.
You would have easily fought with anyone who said anything about your friends what is implied about you as well. But now the time has come when you need to fight to fight for the best friend you will ever have - yourself.
The first move in striking up this friendship is to make an acquaintance with what you are and what you can become. 'Know Thyself!' said the ancient Greek. Until recently, it was not possible to make a very wide acquaintance. Little was known about human psychology and the behavioral pattern as a science. But with development in atomic physics some conclusions can be drawn about the apparent goals of life in general and your own goals in particular. We use the knowledge in knowing ourselves and to predict the actions of other men.
Laws of Survival and Abundance
The dynamic principle of existence is Survival.
When one thinks of survival one is apt to make the error of thinking in terms of 'barest necessity.' But that is not survival. For it has no margin for loss.
For example, say an engineer is constructing a bridge. At the time of its construction he uses something which we call the 'factor of safety'. If the bridge is to hold ten tons, hen he builds it to hold fifty tons. Thus he makes the bridge five times as strong. Then he has a margin for deterioration of materials, overloading and sudden unforeseen stress of elements and any accident which may occur.
In life, the only guarantee of survival is abundance. Suppose, a farmer who calculates twelve bushels of grain for his food for a year and plants those twelve bushels only has cut back his chances of survival very marginally. An individual survives or succumbs in ratio to his ability to acquire and hold the wherewithal of survival. The security of a good job, for instance, means some guarantee of survival - other threats to existence not becoming too overpowering.
Survival is not possible or cannot be found where there are no ideals, honesty, love, passion, closeness and emotions for the near and dear ones. A man who is known to be honest is awarded a good survival - good friends and good jobs; while the man who has his ideals survives for so long he remains true to his ideals.
In short, the most esoteric concepts fall within this understanding of survival. Survival is possible as long as you remain faithful to yourself, your friends and family, your relatives and also towards the laws of the universe in general. When he fails in any respect, his survival is cut down. The end of survival, however, is no sharp thing. Alive in this moment and dead in the very next moment is not what we call Survival. It is actually living up to the best.
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Mike Singh |
2007-02-04 |
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Title: Learn Technical Analysis - How Can Expectancy Increase Profits?
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When it comes to explaining expectancy in the market, you must first look at financial analysis as well as technical analysis. These two types of analysis are usually combined together to gain information on future trades. The first one is related to supply and demand, while the second is related to the more specific aspects of the market.
Both of these, while related to expectancy, can only be used with some degree of certainty. This degree of certainty is in fact not very big. This is all based on probability. There is a main variable on both of these. This variable can be used in some instances as a tool on the trading market. In fact this technical analysis is a very powerful tool. A lot of people just starting out are afraid to use expectancy, but it is actually quite easy to understand. Expectancy is basically an equation; where expectancy equals the probability of a win or average win minus probability of a loss or average loss.
This is basically the profit that will be expected. For example if your probability of win is around a thousand dollars and your loss is expected to be three hundred dollars, your expectancy will be seven hundred dollars. This means that the seven hundred dollars is basically your profit.
The main goal to using expectancy is of course trying to figure out how to gain the most profits. Instead of focusing just on the profitability of a trade, you see more of a general overview. Expectancy is tools that will help you see the net profits for a certain amount of time. If you use expectancy correctly over time you will minimize your risks. Although not all risks can be avoided when it comes to trading, you can greatly lessen the risk you are taking. That is part of the reason why understanding expectancy can be a great benefit to you and your trades. You will be able to better see your profits over the long term, especially when it comes to future trades.
As you can see this type of commodity is actually quite easy to understand. When it comes to figuring it out, it can be done with relative ease. In fact figuring out expectancy is the easiest part. Once you figure it out, it is just a matter of applying expectancy to the given situation. Though expectancy will not totally eliminate the risk factors, it can greatly help you minimize them.
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Martin Chandra |
2006-12-13 |
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Title: Investment Strategies: Technical Analysis and Fundamental Analysis
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For those unfamiliar with the term, Forex (Foreign Exchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced.
In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
Forex is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day.
With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the Forex money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
The two fundamental strategies in investing in Forex are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price.
Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself.
Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation.
An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants.
For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
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Thomas McCarthy |
2006-08-28 |
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Title: Fundamental Analysis Vs. Technical Analysis
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Private and institutional investors use fundamental analysis as their basis for stock purchases, while short-term traders use technical analysis. Since the risk-reward ratio and time horizons used in investing and trading are very different, it makes sense that these two different methods are employed. Investing and trading are very different animals, and their differences are characterized by the investing processes that fundamental and technical analysis illustrate.
Fundamental analysis relies on economic supply and demand information for the long term and company's financial health in the short term. An investor is informed of these conditions by a stocks annual growth rate, five-year, one-year, and quarterly earnings records, and P/E (price-to-earnings) ratios. Investors reliant on fundamentals are more interested ina stock's performance year to year than they are in market behavior. They do not fret when the market plunges one day and surges another, because their goal is the end result of steady, conservative growth.
Although fundamental analysis provides highly valuable information, many people do not have the time required to research the fundamentals. Taking an hour or more to research one company's new product potential and compare present and past earnings is too much for some, but certain fundamental concepts are simply invaluable. One such statistic is the EPS, or earnings-per-share ranking. Earnings-per-share are calculated by dividing a company's total after-tax profits by the company's number of common shares outstanding. You'll want to compare the EPS of the company in question to other comparable companies in the sector to see how your investment stacks up within the industry.
Technical Analysis is the alternate method of stock research, focused on the study of timing, price fluxuation, and investor sentiment. The most common method of technical analysis is conducted with a chart that shows a stock's price history. We know that the prices represented in the chart do not occur randomly, and it is the collective mindset of all investors that creates prices. These buyers and sellers create patterns because they operate from memory. Different types of charts can be configured to show a wide variety of indicators and everyone has their personal favorites. By analyzing charts and price history a trader can attempt to predict market sentiment and stock price movement, but this is far from an objective science.
Technical analysis and fundamental analysis are the two basic sectors of reasoning that constitute the way investors and traders go about choosing stocks, and you must follow your own financial strengths in determining whether daytrading or investing, and technical or fundamental analysis are right for you.
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