Where To Find Foreclosure Auctions

If you are, you may be looking in the wrong place. Are you looking to buy a new home?

Foreclosure properties are often considered a great buy, as they are easy to find and affordable. Instead of visiting the online websites of realtors or flipping through their brochures, place your focus on foreclosure properties.

One of the most popular ways that foreclosures are bought and sold is at an auction. This auction typically takes place at a county, town, or village government office, such as the clerk 's department. As for how you can find these foreclosure auctions, they are often advertised in local newspapers. You can also search local records, as foreclosures are public notice.

One of the few downsides to buying a home at a foreclosure auction is the inspection, as you aren't typically granted one. Most bidders are bidding on the home as-is. As-is isn't so bad, but it may be if you haven't seen the property.

With that said, since foreclosures are public notice, you should be able to get the address of the property in question. You will want to drive by. Although you should not judge a book by its cover, a drive by can give you an idea of what to expect. When you have doubts, it may be best to move on and target other auctions.

If you decide to attend a foreclosure auction, the last thing you want to do is just show up. That is unless you are scouting to see how an auction works. When you are serious about purchasing a foreclosed property at an auction, you need to be prepared.

This preparation involves having financing lined up. Many will require that you either have the money on hand or show proof that you do have the financial resources needed to follow through with the sale. Contingency loans are generally prohibited. Check deposits are sometimes required before you can even place a bid.

After this point has passed, you can start the eviction process if the current occupants do not leave voluntarily. This is where they can still fight to keep their home. Many states give current occupants a redemption period or a grace period.

In fact, it is likely that you will be unable to do so. If you are the winner bidder, it is important to know that you may not be able to move into your new home right away. For bids that are not sealed, the auctioneer will start with a figure, often around $1,000 or less and the bidding will continue on. Once everyone has placed a bid, the highest bidder will be announced.

It is not uncommon for bids to be sealed. As for the auction itself, it depends.

This knowledge is important, as many fellow bidders will be investors looking to turn a profit, not buy their first home. If you are unfamiliar with the buying and selling of real estate, foreclosures, or auctions, you can learn a lot. You should be allowed to do so.

As it was previously stated, you may want to attend a foreclosure auction and just sit on the sidelines.

Using Your Credit Card: What Is Its Purpose?

This can make a big difference in how you use it and what you will pay in charges and fees for using it. Before choosing a credit card, consider what it is that you plan to use it for. Not all credit cards are the same, and this goes beyond the APR that most people are aware of. There is a wonderful feeling to having a credit card when you need one, but that blanket term "credit card" can be misleading at times.

If you pay in full, you do not incur finances charges which are based on the company APR. Keep in mind that finance charges do not kick in unless you carry over a balance. If you intend to follow this routine, then APR will not matter as much to you.

There are some consumers who will pay off their bill each and every month, and rarely, if ever, carry the balance over into the next billing cycle.

For those who will be paying the full balance each month, consider a credit card that has a longer grace period and has no annual fees. This allows you to use the credit for little, if any, charge. Do keep in mind, however, that if you happen to lapse and carry a balance, you will have to pay the finance charges and then APR will matter to you.

Most people, however, do carry over a balance and for those individuals it is important to find the credit card that offers the lowest annual percentage rate (APR). The APR is the number that the credit card company will use to calculate your monthly finance charge so the lower this number the less money you will pay.

If you think that you may use your credit card to get cash advances, you will certainly want to look at the fees and charges for that service. It is important to remember that many, if not most, of the credit card companies charge a higher rate for cash advances than they do for purchases. Some companies will charge a substantial amount more and you would do well to avoid using these cards for cash advance purposes.

Make sure you look for that before you sign up, as it may not be in your best interest to pay higher rates for benefits that you will not use. Many of the companies that offer these promotions will have a slightly higher APR to help offset the cost of the programs. The old adage that nothing is free applies here as well.

There is nothing wrong with opting into these programs if they are benefits that you are going to actually use. These might include such things as frequent flyer miles, phone minutes, rebates and other things. Many people are lured into poor credit card choices by the promotions that many companies offer.

This information must be clearly printed and if you have to hunt for it, then you may want to avoid dealing with that company. Federal law requires that all solicitations and applications for credit cards include key information on the rates and fees that they charge consumers. In order to find out what the APR and other fees are for any particular company, you can visit their website or you can look at the information that comes to you through the mail.

How To Get Out Of Debt

It happens to us all. For many individuals it 's easy to get caught up in the credit card hysteria. The percentage of the population that is in debt is growing at an exceptional pace.

If you're looking for an easy way out, however, don't bother reading on. If you've got over your head in credit card debt and would like to know how to get out of debt, we will show you. Those emotional purchases can add up, and before we know it we've got a problem on our hands.

We see things we like and buy them, on our credit cards of course.

If you have been thinking to yourself, how to get out of debt, it 's important to understand that it 's no easy or simple task. It was certainly easy to spend the money, but paying it back is not so much fun. You need to start by cutting back on your spending.

It sounds simple, but this is an important step in getting out of debt. The surpluses that come from lower spending should be allocated towards paying off your credit cards. Though it is important to set aside a small fund for emergencies. Emergencies are inevitable; they will happen.

We typically reach for our credit cards in these circumstances. That way you can focus on how to get out of debt, rather than how to not add to it. With savings, however, you'll be prepared. It 's important that you're disciplined, only utilizing these funds in extreme emergencies.

It 's easy to just make the minimum balance payments, but this barely keeps you even. This assumes you don't spend any money on your credit cards, which isn't always realistic. It 's important that you stop your credit card spending.

This is one of the best ways on how to get out of debt. Stop adding to the problem. Also, you'll be a little more frugal when you're spending your cash. It doesn't always seem like your own money when you spend with plastic.

It 's important to understand that there is no easy way out. Debt negotiation services are not necessarily the answer. They're out to get paid. They may settle your debt, but will do so at a cost. The cost being your credit and excessive fees. It may involve hard work and focus, however, you will get things paid off over time.

Refinancing is a common instrument utilized to remove debt, but it is not at all the solution. By refinancing your credit card debt 's you're just playing a shell game, moving your debts from one location to another. For many individuals that got caught up in this during the housing bubble are way above their heads.

As a result, bankruptcy, foreclosure, and IRS issues are now the problem. When you evaluate the two in hindsight, simple debt issues are a breeze to deal with. So, don't get your self over your head by looking for the easy way out.

It 's paramount not to get carried away looking for the easiest way out. By no means is getting out of debt easy. It takes time and some elbow grease. But, bankruptcy and all the other bad things that can happen are much more severe, and goes to show how bad things can get. The morale of the story here is that there is no magic bullet, no easy solution, and your debt problem will not solve itself.

You've got to take it into your own hands and make it happen, even if it takes the sacrifice you're unaccustomed to. So, make an effort, you will be satisfied that you did.

Learn how to make money onlineandhow to get out of debt.

Buying Family Income Benefit For Family Protection

For those who value the financial protection that life insurance provides but find that they cannot afford the expense, a Family Income Benefit policy can be an excellent alternative.

This lesser known type of financial protection plan is typically cheaper than the average life cover policy, and it can be an excellent way of providing for your family in the event of your death.

How Does Family Income Benefit Work?

Like a traditional life insurance policy, family income benefit provides money for your family; however, these two types of financial protection are quite different. A life insurance policy provides a lump sum when a claim is made, and the value of the lump sum is the same whether the claim is made two years into the policy, or a year before it terminates (assuming it is level cover).

With a family income benefit, the opposite is true. A family income benefit plan lasts for a fixed amount of time, but if you should die while the plan is live, your family will receive monthly payments up until the policy terminates. If, for example, your plan lasts twenty years, and you die after ten years, your family will receive a monthly payment for the remaining ten years. If you die after 18 years, they receive the same payment for the remaining two years. If you're still alive when the policy terminates, no payments are received. The benefit payment structure is the main reason why family income benefit is less expensive than conventional life insurance.

Who is it for?

This type of income life insurance plan is ideal for young families, and in fact the plan was designed with them in mind. Conventional life insurance isn't always affordable for young families, but the much lower cost of a family income benefit (choosing a family income benefit can halve your monthly premium payments in comparison to a conventional life insurance policy) means it 's possible to provide financial protection for your family without compromising your financial security in the present.

Flexible and Tax Free

A family income benefit plan is extremely flexible. You're able to designate any end date for your policy, and can choose how much income your family will receive each month. For example, you can choose to keep your policy in effect until your youngest child finishes school or university, or until they are old enough to be financially independent.

As with conventional insurance policies, family income benefit provides tax-free payments. The policy does not have a cash-in value, however, as there is no investment component involved. Many companies which offer a family income benefit plan also offer a cash option so that the beneficiary can opt for a cash lump sum instead of a series of monthly payments should a claim be made.

This ensures that your policy will continue to hold its value, and will remain capable of meeting your family 's financial needs regardless of when the claim is made. If, for example, you buy a policy this year, and your family makes a claim in twelve years, the payments they receive will be adjusted upwards in line with the increased cost of living. This means that the cost of living is factored into how much money your family receives each month.

Another option is to link your policy to the Retail Prices Index.

If you are unsure, it 's highly recommended to consult a regulated financial adviser who can find the best policy for you based upon your specific needs and budget. Insuring your family 's financial future is important so it 's vital to know what you need and get it right.

Market Timing Is No Way To Invest

In this article, we will focus on the two most popular strategies that you can use to invest without having to worry about market timing. Most investors end up missing out on a continual rise by waiting for a stock to plummet first, or sell way to early by underestimating how high the price will go. This is easier said than done.

Ideally, investors try to buy a stock when the price has reached a support level (a level at which the price is as low as it will go).

The theory is that this will lead to greater returns overall, since smaller numbers of shares will be bought while the cost is low. According to this technique, shares of stock are purchased in a specific amount on a specified periodic basis (often monthly), regardless of current performance. Dollar cost averaging (DCA) is an investing technique intended to reduce exposure to risk associated with making a single large purchase.

An example of DCA would be as follows: If I want to buy 1,200 shares of IBM stock using DCA, then I might decide to purchase 400 shares of IBM per month over the course of the next three months. Hypothetically, during month one, the price of IBM may be $105 per share, and then it might drop to $95 per share during month two, and then rise to $100 during month three. If I bought all 1,200 shares during month one, I would have cost me $105 per share. But, by spreading the purchase over a three month period, I managed to buy IBM at an average price of $100 per share.

The primary drawback of using DCA is that you may not be maximizing your overall return. If there is an indication that a certain stock is currently undervalued and might shoot up in price, you would actually make less money using DCA than if you had bought all the shares in the beginning before the price skyrocketed. So, it is not always a winning strategy to spread your purchases over a period of time.

Value averaging, also known as dollar value averaging (DVA), is a technique of adding to an investment portfolio to provide greater return than similar methods such as dollar cost averaging and random investment. With the method, investors contribute to their portfolios in such a way that the portfolio balance increases by a set amount, regardless of market fluctuations. As a result, in periods of market declines, the investor contributes more money, while in periods of market climbs, the investor contributes less.

Here is an example of DVA: I want to invest in Yahoo using DVA. For the sake of argument, we will say that Yahoo is currently $10 per share. I determine that the value of the amount I am going to invest over the course of 1 year will rise, on average, $1,000 each quarter as I make additional investments. If I use DVA, I invest $1,000 to start.

So, I am investing less as the stock price increases. If, at the end of the first quarter, the share price has risen to $15 per share, that means that the value of my investment for the first and second quarter to $2,000.

Make sure you know something about the company you are going to invest in before you go forward. But, neither of these strategies are necessarily full-proof. Dollar value averaging usually works better than cost averaging because value averaging results in less money being invested as the stock price goes up, whereas with cost averaging you continue to invest the same number of dollars regardless of the share price.

Why Bad Credit Doesn????????t Matter To Payday Loan Companies

If bad credit is the main thing hindering you from obtaining a loan successfully, you????????ll be happy to know that it????????s not a requirement when it comes to payday loan companies. Whether you????????re borrowing to purchase a home or car, you????????ll almost always hear the loan provider inform you about applicants having to undergo a credit chick before any loan application is approved.

What is a Payday Loan?
Before we get deeper into the reasons why bad credit matter naught to payday loan companies, let????????s discuss first what a payday loan exactly is.

Payday loans are short term loans ???????? rarely lasting more than half a month and you????????ll know why later on. Their amount ranges usually from $100 to $1,000. Exactly how much you can borrow is usually based on your preferences and income. Payday loans can be borrowed anytime, but they do have universal laws when it comes to paying them off: you have to pay them off on your next payday.

Payment Methods ???????? Why Bad Credit Doesn????????t Matter to Payday Loan Companies

It????????s mainly the payment methods used for payday loans the reason why these companies don????????t mind what your credit rating is. It wouldn????????t even matter to them if you????????ve excellent or the worse credit. Their preferred payment methods make those numbers pretty much inconsequential.

The first payment method allows the payday company to automatically and electronically access your bank account on your payday. Upon access, they will be able to retrieve the total amount due from your account. Although permitting a second party to access your account seems hazardous, the chances of getting ripped off are pretty slim. What you should really about is having adequate money in your account to cover your loan.

Payday loan companies will be able to know when they have to access your account because of the investigation they performed regarding your employment. When you????????re applying for a payday loan, you might notice a number of specific questions regarding your work, and those are what allow them to determine whether you????????re a good credit risk or not.

Not only will they make sure that you????????re working for the same company you????????ve enlisted in your application form, but they????????ll also confirm with your company how much you????????re earning and which dates of the month do you receive your paycheck.

The second payment method is less risky for you but still provides adequate protection for the payday loan company. This time, you????????ll have to issue a check from your own checking account for the total money owed. This check is postdated and will only be deposited in their account on the given date.

Whichever method you end up choosing, the payday loan will still come up the winner. If you can????????t cover your loan on time, you will have to shoulder the interest charges for that month. It????????s hefty, but at least it????????s not as big as the money you borrowed.

By confirming exactly how much you????????re earning, the company will also be able to compute the reasonable amount of money that you????????re allowed to borrow. Income verification is also another reason why bad credit doesn????????t matter.

If you want something to worry about, make sure you????????ve got yourself a great job and your own bank account. Thus, when applying for a payday loan, you need not worry about having good or bad credit.

Social Security Benefits Will Not Pay All The Bills

When talking to financial planners they will tell you that it is never too soon to begin planning for your financial future, but at some point, it will be too late. Most people will spend years working, knowing retirement is going to sneak up on them, and unfortunately, few will begin planning soon enough. There are few times in life worth looking forward to that are better than retirement, unless it is retiring knowing you will have financial security for you and your family.

For example, a person who averaged a net pay, take home, of about $3,200 per month, may expect only about $1,500 per month if they work until full retirement age. There are very few who will not qualify for Social Security benefits when they reach the appropriate retirement age, but the money from those benefits is not likely to provide a lifestyle they have grown accustomed to living. It has often been said about business that those who fail to plan, are planning to fail and the same could be said about planning for retirement.

If they choose to go into retirement at age 62, Social Security benefits will be reduced by 25 percent and by 20 percent, if they work until they are 63. This reduction will be in place regardless of how long Social Security benefits are paid. The only time it will increase is when the government issues cost of living adjustments, which usually are not very high.

To maintain your standard of living through retirement, a minimum of $1,700 will be needed each month, in addition to Social Security benefits just to stay even. You might consider the savings by reducing the expenses by not going to work everyday, but as the cost of living rises on an annual basis, you will want to know that your income has the option of rising with it. How to achieve that additional income is what you need to plan for now, while you are still working. Remember, that income from additional employment after age 62, if you are receiving retirement benefits, will cause your monthly Social Security benefits check to be reduced.

Others may decide not to give up a plum job, continue working through their first years of full retirement, and not receive Social Security benefits at that time. Continuing to work beyond the age of eligibility for full Social Security benefits will be rewarded by an increase in allowable annual benefits. By staying on the job and paying into Social Security for an additional five years, for example, will see the monthly Social Security benefits increase by as much as eight percent per year.

Estimating what you will most likely need to live on and any difference between the two amounts is the additional amount needed to save before you quit working. Consider all available retirement income, Social Security benefits, and retirement fund from your job, 401K or IRA and estimate what the monthly income will be once you become eligible for full Social Security benefits. At some point, a person has to sit back and look at the big picture, and then break it down into manageable pieces. Estimating what you will most likely need to live on through their retirement years.

Consider all available retirement income, Social Security benefits, and retirement fund from your job, 401K or IRA and estimate what the monthly income will be once you become eligible for full Social Security benefits. At some point, a person has to sit back and look at the big picture, and then break it down into manageable pieces. There is no magic time to begin planning for retirement, but everyone should be aware by now that Social Security benefits will not offer enough to live on through their retirement years.

Caution should be noted, however that putting pre-tax money into a retirement account will trigger a tax on that amount if it is used prior to full retirement age. The important thing is to have the money put aside when you will need it the most. Whether you begin another savings account or add additional money into an existing IRA or 401K-retirement fund is irrelevant.

How To Get A Short Term Loan

Here is what you need to know about getting one for your needs. This is where it could be real handy to get a short-term loan. Something has come up and you are in need of some cash - but only till payday.

You do work, and the money is coming, its just that payday is a week away. Every now and then money can get a little tight in between paydays.

These loans enable you to get the cash you need in a very short time - sometimes in about an hour, but some places will take up to 24 hours. Short-term loans also go by a number of other names, such as payday loans, cash advance, fast cash, and a few more.

All you need in order to get your short-term loan is being employed at the same place more than three months. In addition, you will need to make more than $1,000 each month. They will ask for the name and phone number of your employer, and may call for verification. In some cases, you may need to fax copies of some of your recent pay stubs to them as proof of your income. A bank statement may also be needed, too.

You will also need to be ready to give some pertinent checking account information. This is where you will get your money, which will be directly deposited into it. Also, the money will probably be withdrawn out of it on the day the loan becomes due. An alternative way of paying is that you pay the loan off in person at the loan office. This account will need to have been in existence also for about three months.

Short term loans, or payday loans, are required to be paid back in just a few days - usually your next payday. Your first loan from a payday loan office - or Web site will be small, probably less than $400. You also want to make sure that you pay it off on time, too, as this will help you to get payday loans in the future for more money. Not paying it will quickly get you into trouble and banned from future payday loans.

One nice thing that you will also want to look around for is that a number of payday loan providers will let you have the first one interest free. At this rate, you will want to shop around some so that you can find a good one. This can range anywhere from about 15 all the way up to 30%.

Be aware that these payday loans can have quite a high interest rate.

By shopping around, you may be able to find even better deals. Because of the high amount of competition between the lenders, new features are slowly being added to make their loan product more desirable. Some, though, will allow you to pay it back in three or four payments - instead of all at once. This is a newer feature, and not many do it yet.

Some payday loan lenders also have some differences in how long you will be given to pay the loan back, too.

Car Loans Made Easy

This article will provide all the info you need to consider when buying a car on credit. But what should you be looking for if you decide to splash out on a flash new motor? Halifax released figures last year showing that 67 per cent of those taking out loans to buy cars are men, mostly around January and August when the new number plates come out.

Everyone wants a new car and increasingly people are using loans to afford them. Over 2.4 million new cars hit the UK???s road in 2007, and the figure is not expected to be much lower in the year to come.

Obviously you are going to have to get down study them eventually, but the task will be a lot easier if you have some idea of the basic options available. There are millions of different products out there, and they are all packed with mind boggling small print and thousands of additional terms and conditions. The big decision you must make is choosing the type of credit arrangement you want.

One popular option is hire purchase. With this method you hand over a deposit, and then pay off monthly installments until the car is yours. Most dealerships will let you buy a car off them this way. The interest rate on hire purchase can vary though, and you should compare the price of borrowing the money elsewhere. Some dealers will look to push you into an arrangement that will not necessarily be the best deal for you, so it is worth looking at the cost of borrowing before you head off to look at cars. The advantage of hire purchase is that the loan is secured on the car, so there is no chance of losing your house if you fail to keep up with repayments.

Personal contract purchase (PCP) is similar to hire purchase in that you put down a deposit and then pay monthly installments. With PCPs though, there is also a lump sum that must be paid at the end of the installments in order for you to own the car outright. This sum, the minimum guaranteed future value (MGFV), is often quite large, but gives you the option of buying the vehicle there and then, walking away with nothing, or switching to another PCP plan and getting a new car. PCPs usually have lower monthly repayments than hire purchase meaning you can afford a better car. They do work out more expensive in the long run though.

Both of these options are available only from dealers, and it can often be cheaper to take out a personal loan. Taking out a loan has the added advantage that you own the car outright from the moment you start making payments. If the loan is secured on your house then there is always the risk of finding yourself homeless though. It is generally cheaper to borrow money from a bank than a dealer, especially if you shop around. But banks are becoming increasingly fussy about who they hand out thousands of pounds to, and it make take some searching to find a cheaper deal that will accept you with a blemished credit history.

If driving a brand new car is personal The payments are often cheaper than with PCPs or hire purchase, and you always have the option of getting a new car at the end of every deal. There are big advantages to this though. The big problem with this scheme is that you never actually own a car, and just rent one off the dealer instead. The payments are often cheaper than with PCPs or hire purchase, and you always have the option of getting a new car is personal contract hire (PCH).

There are big advantages to this though. The big problem with this scheme is that you never actually own a car, and just rent one off the dealer instead. If driving a brand new car is personal contract hire (PCH). The payments are often cheaper than with PCPs or hire purchase, and you always have the option of getting a new car at the end of every deal.

There are big advantages to this though. The big problem with this scheme is that you never actually own a car, and just rent one off the dealer instead. The last way of getting yourself a new car is personal contract hire (PCH).

So do your research, get some comfy shoes on, and good luck. At the end of the day the more legwork you do, the more likely you are to find a great deal. Don???t get drawn in by flashy introductory offers which cost a fortune in the long run.

Price comparison websites are a great way to compare lots of palns at once, and after consulting them and your dealer, you should be able to find the deal that is cheaper for you. Once you have worked out which of these plans you think will suit you the best, the only thing to do is to shop around.

Fico Frequently Asked Questions

Don't worry, you're not the only one. Do you have a few questions about what FICO actually means? You've received the credit report, gone through it, and everything looks pretty much in order.

So, you have decided to consolidate your debts and are trying to improve your credit score.

It is an industry term and is a measure for your credit score. It stands for Fair Isaac Company, which created the most commonly used credit score on the market. First, what exactly is FICO and what does it stand for?

What specifically is a credit score and what can it say about a consumer? A credit score is a numerical calculation based on many different factors. The score can be anywhere between 350 and 850. The lower the number, the worse the rating, the higher the number the better off you are.

Different factors can determine your magic number. These include: past behavior and whether you made payments on time, how much credit you had in the past, and income. A high number generally means the individual is more likely to pay on time and not lose a creditor any money. A better credit score could help you get a better deal on debt consolidation if you need it, although by the time you need debt consolidation help, it 's likely your credit rating is pretty damaged.

Of course, everyone has a right to view his or her FICO scores. For more information, go to the myfico website. A lot of people don't realize how to best use their credit scores and the information that they reveal, and when you see them, you'll know whether you need to improve. Make note of which debts need to be reduced or eliminated most immediately, for a place to start. You are also able to see if there is any incorrect information on there and correct it.

You should also know that the lender looks at more than just your overall rating. There are three additional factors that will affect whether or not you can secure a loan. The first is your credit reputation or your score. The second is what, if any, collateral you have to put up against the loan. Finally, the lender will look at your general income; this will give them a clearer picture of your ability to pay the loan. Someone with a lower credit score but positive other factors may have a better chance in some instances than someone who has the opposite.

What factors affect your credit rating? Some of these things include late payments, the amount of the payment and how tardy you were in paying it. More recent instances of this will have a heavier negative impact than will something that happened a while ago. Bankruptcies, of course can also greatly affect your FICO score. How long has your credit been substandard? That can also affect your number.

Lenders may also look at include new credit applications, how much money in total you owe, how much credit history you have, and what kind of outstanding debts you have. These are all important things to remember when applying for any kind of loan or debt consolidation.

Is there a best way to fix your FICO score? Well, first, straighten out your finances. Pay your bills on time and bring current any that are past due. Although you should pay off credit cards and then cut them up if you can't trust yourself not to use them, you should not close accounts unless you will find this too tempting. This is because closing accounts can actually lower your credit score.

Double-check your credit report and the information on it to be sure everything is accurate. Pay credit cards off as fast as possible, starting with the highest interest rate first and making minimum payments on the others. This will help make sure you really do only use it for emergencies. You may want to keep one credit card for emergencies only, and put it in a container of water and freeze it, so that to get to it, you have to thaw the ice first.

So, too, will opening new ones.

This will further raise your score. A final tip is that you should not apply for any new credit card debt, at least until your accounts are all current and you are credit card debt free.

Selling Strategies - Setting A Stop Loss

However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case. Sometimes the best way of lowering exposure to risk is not to invest at all!

Trailing stop loss. So, how to best protect yourself when the markets disagree with your due diligence? We all have stories of that "must have" "can't lose" stock that looking back, we didn't really need to buy, and it definitely lost.

Its important to understand the psychology of investing. When we make money, there is instant euphoria. When we start to lose money, there is a sudden "deer caught in the headlights" type of emotion, which makes us unable to do the right thing. We fear that the moment we sell, will be the moment that it starts to rebound. Not only do we fear that we will be that guy who sold at the low of the day, but that we will miss out on untold fortunes because we got out too early.

While this happens, more often than not, a small loss turns into a much bigger loss. Remember, a 40% loss started off as a 5% loss.

So what is the best stop loss strategy? Well, we happen to have 2. One simple, one a little more complicated, but possibly more effective and capital saving.

The first strategy is called a "trailing stop loss". Its simple and effective. We're going to add a small twist to it. A traditional trailing stop loss simply means that you set a percentage that you are willing to lose. For example, if you purchase 1000 shares of ABC at $5/share, you could set a stop loss at 10%. This means that if the stock dips below 10% of your purchase price ($5 - 10% = $4.50), you're out of the market and no longer risking capital. If the share price moves higher, you would set your stop loss at 10% below the closing price. If ABC moves to $5.50, you would set your stop loss at $4.95. If the stock drops below that price, you're out.

By setting your stop loss at the time of your purchase, you are taking the emotion out of investing. Specifically, you are taking out the "deer caught in the headlights" emotion. This will save you grief and will save you money. If your stock moves like you think it will, you can lock in your gains automatically.

Our twist to this strategy though, is to first establish the dollar amount that initial stop loss is worth, and let that dictate what your stop loss will be.

Given the same example as above, your initial stop loss would be $4.50. You would only be risking $0.50 per share or $500. This represents the most you are willing to lose, regardless of which way the investment goes.

If the share price moves to $7.00, instead of setting your stop loss at $6.30, (thus risking $0.70 or $700 of your money), you would set your stop loss at $6.50, which risks the same $500 you were initially willing to lose when you first started.

This little twist helps you keep more of your profitable investments. Why put more profits at risk?

The second stop loss strategy is, although a little more complicated, will protect more of your money.

While we would love to take credit for this strategy, we found it when reading Chart Trading by Darryl Guppy. This strategy starts by looking at your overall capital, not the amount of the specific investment. For example, if you had $20 000 in your investment account, you could trade 51 times if each time you invested you put 2% of your total capital at risk.

While 2% doesn't sound like a lot, lets have a look at an example. Given your investment account has $20 000 in it and you only want to put 2% of it at risk, you would be willing to risk $400 per trade. This ensures that you will have 51 chances to get it right before you run out of money.

Where you set your stop loss is basically the point where you are risking $400. Given our initial example, your stop loss would be at $4.60. If the price moves from $5 to below $4.60, you have lost $400. What if you purchased 2000 shares at the same $5? Your stop loss would be then set to $4.80. Anything below that, and you have risked more than $400. If you think that you want a deeper stop loss, then you would purchase fewer shares. The idea is simple: you never risk more than the same amount per trade.

As the price increases, you then change the amount of your stop loss accordingly. If the stock hits $7, you would set your stop loss at $6.60.

This will lower the number of chances you have at getting it right. Your 10% stop loss would put $1000 at risk. However, what if you purchased 2000 shares at $5 each?

Given our initial stop loss strategy, assuming you lost $500 each trade, you could lose approximately 40 times before you ran out of money.

On the other hand, if the market disagrees with you, you can still keep the majority of your money! This way, when your hard work pays off, you'll appreciate it more. Its much better to think about the amount you are prepared to lose.

Many investors think of the ways they are going to spend their profits before they are made. Its up to you how much money you are preparing to risk.

Basic Home Loan Terms Explained

Though some or all of these terms may seem somewhat foreign to you, do not get overwhelmed, there are simple explanations for each and every one of them. ARMS, points, interest rates, good faith estimates, pay-downs, lock-in dates, so on and so forth. They are inundated with information riddled with terms of art. The wonderful world of home buying can sometimes overwhelm the first time home buyer.

So a mortgage is a loan against property that is secured with a lien against it. This "mortgage" is basically a lien against the property until such time that loan is satisfied. Mortgages are simply a loan against property that is secured with a "mortgage". Typically all home loans fall into two basic categories: mortgages and home equity loans.

Let us start with the different types of loans there are.

A home equity loan is a loan that is also secured with a lien against the property. The home equity loan lien is secondary to the first mortgage on the home. This type of loan is based on the amount of equity in the house. Equity is the difference in dollars between the value of the home and the amount owed on it. Equity can be a positive number (the house is worth more than what is owed) or can be a negative number (negative equity) which means that there is more owed on the house than the house is worth.

A lien is simply a legal term that indicates that someone other than the homeowner has a legal right and interest in the property. So, if the property is ever sold, all liens need to be satisfied - any money owed to anyone with a lien must be paid, otherwise the new owner may become obligated to pay the amount owed. A lien is against property, not a person. Typically in all real estate transactions there will be a title search that will reveal any liens against the property. This title search is basically an examination over anyone and anything that may have some legal interest, obligation or right to the property.

If there are multiple home loans on a property the order they are paid in is the oldest to the newest. This is only a factor if the property is being sold for below what is owed. This is either through a "short sale" where the house is being sold by the homeowner for below the amount that is owed in the house. They will need approval from all lien holders in order to do this. This is also an issue if a house falls into foreclosure.

Within these two types of loans you will want to know the difference between a fixed-rate mortgage and a variable rate mortgage. A variable or adjustable rate mortgage is an ARM. Fixed-rate mortgages have the same interest rate from the first day of the loan to the last day of the loan unless it is refinanced. A fixed rate or variable rate loan will generally start off for a period of time at a specified rate and then after that period ends, if the loan has not been paid off or refinanced then the rate becomes adjustable based on specific conditions set forth in advance - typically tied to the federal interest rate. An ARM loan will have typically a 3 or 5 year period during which the rate is lower than the going rate. This is used to entice would-be borrowers or help borrowers have lower payments for the initial period.

"Points" are often discussed in connection with loan packages and interest rates. You can "pay down" an interest rate by paying points for example. What this means is you can pay for a lower interest rate if you pay a specified number of points. Points are simply one percent of the loan amount. So a $100,000 loan equates to $1000 for every point.

Another term you will often here is PMI, private mortgage insurance. PMI is insurance for your lender when the amount you borrow is more than 80% of the value of the property. In these cases the borrower needs to pay for this insurance policy. The calculation for your monthly PMI payment is 0.5% of your loan amount divided by twelve.

Tied to the calculation of PMI, as well as many other factors of the loan is an appraisal. An appraisal is a determination by a real estate professional of what the value of the property is. They will evaluate the property and similar properties in the area. They will consider market trends, recent sales and other factors to give an estimate on what the property is worth and would sell for.

Typically your lender will have a cushion in the escrow account of 2 - 3 months in case you fall behind in your payments. Your lender then makes your required tax payments. Your lender will collect 1/12 of your yearly taxes every month in order to be assured that your taxes are paid. Escrow is money that is being held typically to pay taxes.

Another potential add-on to your monthly payments is escrow payments.

The more you know the better off you will be. During the home loan process, however, you should never feel embarrassed or ashamed to ask what a term means. Though there are many more terms you may encounter these are the most often used, misunderstood terms.

Debt Settlement - The Truth

Many find their search leading to alternatives such debt settlement, which has been growing in popularity in recent years. Obviously, those individuals faced with such challenges have no choice but to find the best solution to become debt-free, and put their money worries behind them. There are currently many people who find themselves in a very difficult financial situation, where they?re faced with mounting debt and not nearly enough income to meet their monthly financial obligations.

Unfortunately, there happens to be a great deal of untruths to be found, regarding the process of debt settlement, and if you?re considering this route it?s important to be well informed of the facts before reaching a final decision regarding the best way to resolve your credit accounts.

Additionally, I recently encountered some information regarding debt settlement that happens to be a complete fabrication. The author of a recently published article claims that debt settlement companies convince your creditors to ?re-age? your accounts so that they appear current. This information is simply not true, nor has it ever been true; as a matter of fact the author of this article is either a liar or someone who shouldn?t be writing about a topic with which they?re not completely familiar and informed. It is the job of debt settlement firms to simply negotiate with your creditors to settle your accounts for less than the full balance (usually 50% or less). There?s no logic in re-aging your accounts (nor will creditors agree to do so) during the process of debt settlement.

If you want to learn more about income taxes as If you?d like to learn more about income taxes as a result of debt settlement click here. Both of these are indeed plausible concerns if you?re considering debt settlement. If you?d like to learn more about income taxes as a result of debt settlement, such as possible tax liabilities and a potential for a decreased credit score. Both of these are indeed plausible concerns if you?re considering debt settlement.

If you want to learn more about income taxes as a result of debt settlement, such as possible tax liabilities and a potential for a decreased credit score. If you want to learn more about the possibility of a temporarily decreased credit score as a result of debt settlement click here. If you want to learn more about income taxes as a result of debt settlement click here. If you?d like to learn more about income taxes as a result of debt settlement click here. Both of these are indeed plausible concerns if you?re considering debt settlement.

I?m sure you?ve heard or read about some of the consequences of debt settlement, such as possible tax liabilities and a potential for a decreased credit score.

Before hiring a company be certain to interview many firms, and please beware of companies whose representatives appear to be more interested in collecting your money than legitimately assisting you to resolve your current predicament and overcome your financial hardship. These same reputable companies will agree to work for you on a contingency basis, allowing you to pay for services rendered only after a satisfactory agreement has been reached with your creditor. There are many debt settlement companies that don?t require large up-front fees, or even that you make monthly payments to a trust account. It?s time to put your money concerns behind you, but it?s equally important to conduct sufficient research so you?ll be well-informed before attempting to follow a course of action with which you?re not familiar.

Forex Trading - Should You Invest?

Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money. Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around.

What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other. Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing.

A forex market will be present when two countries are involved in trading, and when money is traded for goods, services or a combination of these things. Currency is the money that trades hands, from one to another. Often times, a bank is going to be the source of forex trading, as millions of dollars are traded daily. There is nearly two trillion dollars traded daily on the forex market. Should you get involved in forex trading? If you are already involved in the stock market, you have some idea of what forex trading really is all about.

The stock market involves buying shares of a company, and you watch how that company does, waiting for a bigger return. In the forex markets, you are purchasing items or products, or goods, and you are paying money for them. As you do this, you are gaining or losing as the currency exchange differs daily from country to country. To better prepare you for the forex markets you can learn about trading and purchasing online using free 'game' like software.

You will log on and create an account. Entering information about what you are interested in and what you want to do. The 'game' will allow you to make purchases and trades, involving different currencies, so you can then see first hand what a gain or loss will be like. As you continue on with this fake account you will see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will have to take a brokers information at value and play from there.

If you, as an individual want to be involved in forex trading, you must get involved through broker, or a financial institution. Individuals are also known as spectators, even if you are investing money because the amount of money you are investing is minimal compared to the millions of dollars that are invested by governments and by banks at any given time. This does not mean you can't get involved.

Your broker or investment advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US citizens so if you are searching the internet for a broker, are sure you read the print, and the information about where the company is located and if it is legal for you to do business with that company.

For more information and resource links on FOREX visit:Free Forex Training

I Didn???t Buy That!

when we respond coat racks they in veritably say oh that???s right and that is the end of the problem. As a merchant that sells coat racks online we receive calls from time to time from people questioning a charge from us they ask ???What do you sell??? Have you ever opened your credit card company they will give the contact number for the merchant.

This is handled by the FDIC you can get more Credit card disputes are supposed to be resolved within 90 days after you call your credit card company and explain the situation all credit card purchases are covered by the Federal Truth in Lending Act and are covered under the Fair Credit Card Purchasing Act or commonly known as the Consumer Protection Act. This is handled by the FDIC you can get more detailed information from their web site at fdic.gov. Credit card disputes are supposed to be resolved within 90 days after you call your credit card company and explain the situation all credit card purchases are covered by the Federal Truth in Lending Act and are covered under the Fair Credit Card Purchasing Act or commonly known as the Consumer Protection Act.

This is handled by the FDIC you can get more detailed information from their web site at fdic.gov. If you can not get a good answer from the merchant call your credit card company and explain the situation all credit card purchases are covered by the Federal Truth in Lending Act and are covered under the Fair Credit Card Purchasing Act or commonly known as the Consumer Protection Act.

If your credit card company will reverse the charges.

The request for a new credit card will show up on your credit report if you see any new cards or loans issued in your name that you did not in fact open contact the lender who issued the loan and get it cancelled and any charges taken care of. The request for a new credit card issued to the thief with their signature and address. Many ID thefts are done so to get a new credit card issued to the thief with their signature and address.

Your credit report can possibly show you any fraudulent activity. You are allowed to get a new credit card will show up on your credit report once a year for free, it is a god idea to take advantage of this and actually set a date every year and request a copy on that date.

Using Your Card: What Is Its Purpose?

This can make a big difference in how you use it and what you will pay in charges and fees for using it. Before choosing a credit card, consider what it is that you plan to use it for. Not all credit cards are the same, and this goes beyond the APR that most people are aware of.

There is a wonderful feeling to having a credit card when you need one, but that blanket term "credit card" can be misleading at times.

If you pay in full, you do not incur finances charges which are based on the company APR. Keep in mind that finance charges do not kick in unless you carry over a balance. If you intend to follow this routine, then APR will not matter as much to you. There are some consumers who will pay off their bill each and every month, and rarely, if ever, carry the balance over into the next billing cycle.

For those who will be paying the full balance each month, consider a credit card that has a longer grace period and has no annual fees. This allows you to use the credit for little, if any, charge. Do keep in mind, however, that if you happen to lapse and carry a balance, you will have to pay the finance charges and then APR will matter to you.

Most people, however, do carry over a balance and for those individuals it is important to find the credit card that offers the lowest annual percentage rate (APR). The APR is the number that the credit card company will use to calculate your monthly finance charge so the lower this number the less money you will pay.

If you think that you may use your credit card to get cash advances, you will certainly want to look at the fees and charges for that service. It is important to remember that many, if not most, of the credit card companies charge a higher rate for cash advances than they do for purchases. Some companies will charge a substantial amount more and you would do well to avoid using these cards for cash advance purposes.

There is nothing wrong with opting into these programs if they are benefits that you will not use. These might include such things as frequent flyer miles, phone minutes, rebates and other things. Many people are lured into poor credit card choices by the promotions that many companies offer.

This information must be clearly printed and if you have to hunt for it, then you may want to avoid dealing with that company. Federal law requires that all solicitations and applications for credit cards include key information on the rates and fees that they charge consumers. In order to find out what the APR and other fees are for any particular company, you can visit their website or you can look at the information that comes to you through the mail.

Will Forex Trading Be Right For You?

When it comes to Forex currency trading, there are some basic character traits and lifestyle elements that need to be in place in order to make a go of this type of trading.

Here are some examples of traits and conditions that should exist in your life before you embark on a round of currency trading.

Many people are looking for a way to get rich overnight.

That there are many scams out there that continually lure people in with wild promises of instant wealth is easily demonstrated by watching television or checking the bulk folder of your email account.

While there are some people that attempt to make ridiculous promises about the money to be made in currency trading, the fact is that for many it is just like any other type of work.

You must be prepared to put in your time, have some success and also experience some failures now and then.

If you are looking for instant success and have visions of spending the rest of your life on the beach after making a killing with currency trading, then you need to do some serious rethinking.

In like manner, you will need to posses the attribute of patience if you are to get anywhere with currency trades.

While you may indeed experience incremental success with your transactions, your gains will come over time and usually will be rather small in and of themselves.

You may need to hang on to a currency for a period of time rather than trading it off, with an eye to the way you believe things will look a week or a month from now.

Make sure you can keep your cool and allow your better judgment to come into play. Patience tends to be rewarded handsomely.

The state of your finances also is a big factor when it comes to making a decision about getting involved with currency trading.

As with any type of investment, you need to make sure you can afford to lose what you invest without creating any problems with maintaining your current standard of living.

While some people like living on the edge, the fact is there is no glory in going for a deal and ending up having to sell the house in order to cover what turned out to be a bad deal.

If you are not able to keep your head when it comes, to only using your disposable resources, to fund your currency trading, then you need to rethink the whole idea.

There is a lot of money to be made with currency trading. However it is not a venture that is right for everyone.

If you are looking for a get rich quick scheme, have a problem thinking decisions through with a cool head, or have a tendency to not take care of your basic financial needs before you invest, then Forex currency trading is not the right choice for you.

If you are business minded and have the ability to make good logical decisions, then I am sure you will love trading currencies.

It should be noted that Forex trading involves substantial risk of loss and is not suitable for all investors.

You Can Make Money With Penny Stocks

I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. Most people consider penny stocks to be a poor investment.

But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board. Regulatory agencies sometimes classify them as a stock with a price below $2. Stockbrokers define them as any stock that trades below $5 per share.

Penny stocks are defined differently depending on who you talk to.

The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets.

The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.

Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.

The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.

Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones.

So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.

To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.

You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.

Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:

1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?

2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.

Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is. 3) Consumer Demand: Will there be a demand for what the company is selling?

Just make sure you do your homework before you invest and you should do extremely well. The earlier you get started, the more money you can make in the long run. Try to set aside some money for investing in penny stocks and start while you are still young.

What Is Your Financial Worth?

An important question to ask yourself is whether you live to work or work to live.

Despite this reality, there are steps you can take to elevate your financial position. Ultimately, until you reach an income that allows you to be carefree about your finances, working is partly about obtaining money. I do enjoy my work, but the primary reason that of working is to fund my lifestyle. In my case, I fall quite neatly into the second category.

The first and foremost step is to consider your attitude towards money. Do you see money as the answer to your troubles or do you see it as societies method for control? Ultimately, the way you view money will have an effect on your finances.

If you view money as the key to your happiness you will never be satisfied with your financial situation. It is the same for those who see money as the root of the world?s evil. By viewing money as means of achieving your goals and dreams you will develop a healthy attitude towards money.

Setting goals for yourself will help clarify what you want out of life. This may be an intimidating task but it is a vital step. Essentially this will allow you to establish what income is necessary for you to achieve your goals.

It is crucial that you set realistic and attainable targets. Setting unreasonable goals will lead to disappointment when you fail. Taking this into account, it is also important that you set challenging goals. This ensures a feeling of self accomplishment so ensure that you?re not selling yourself too short.

Learning is the key to achieving your goals. Learning breeds experience, information and new ways of thinking. By refusing to learn the unknown, you are actively allowing others to step up and take over your position. Your experience and knowledge is becoming less important as each day goes by. In order to earn more you must increase your knowledge bank. Gaining new skills and experience will make you viewed highly as valuable employee. In turn, this will increase your salary potential.

After taking action to become considered a valued employee in your industry, you must look at your current and future employment situation. Are you likely to remain stagnant in your employment position or is there the possibility for a promotion in your company. If there is no possibility of advancement, you may have to seek opportunities elsewhere.

If you decide to stay with your current employer, your next step is to ask for a raise. Although a daunting task, you are only limiting your potential by settling for what you are currently earning. The potential rejection is enough to make even the most confident employee nervous. To combat this fear, make yourself knowledgeable on how your company deals with raises. If yearly salary increases exist, then record your achievements. This gives your employer evidence as to why a raise is deserved. It is important to be fully prepared and to calmly communicate your requests. Discuss your wants and why you deserve them. Researching into what others in your industry or profession are earning will give you something to compare your salary with. It will give you an idea of what you should be getting paid. The negotiation process will be easier once your preparation has increased your confidence levels. It is important not to threaten resignation as this will dampen your chances of a raise and affect your future career.

If it is deserved, then most employers will expect for you to request a raise. Remember that raise requests are predicted by most employers.

If this is the case, start to job search but make sure that you leave your current position on first-rate terms. A company?s budgeting restraints may have affected your raise request as apposed to your workplace performance. It may be time to start looking at positions elsewhere if your deserved raise is rejected.

Stop Losses - My Biggest Downfall

One of the common email questions I get through my website relates to difficulties in sticking with stop losses.

Of course, when price gets to that level there?s no shortage of reasons why they should hang in there just a little further it?s sure to move back into profits. Some traders don?t place one in the market at all, promising that they?ll get out when price hits a certain level.

Other traders have no problem placing their stop. But for some reason, they decide to remove that order from the market before its hit.

Well, I got another email this morning ? ??Sticking to stop losses is my biggest downfall, any suggestions??

This particular question came from someone who says they?re fairly new to trading, so I think it?s great they?ve recognized this problem so early. Well done. But it?s such an important question and such a common question, that I felt I should share my answer.

Firstly, difficulty in sticking to your stops is certainly a common problem - so don't feel too bad about it. This means it?s not just you ? others have been through the same issues, and overcome them. So there?s no reason why you can?t do this as well.

The difficulty is getting rid of this bad habit. Traders say that they understand the need for the stops - they see the danger in letting the trade run - but for some reason even if they had full intention of exiting at the stop loss, they still let it run, either by not placing the stops at all or by removing the stop once it 's in the market.

Where does this problem come from? Well, I could write a whole book on this, but let?s try to summarize it here.

Basically I believe the problem is fear. Not just the fear of a small loss of money occurring with this trade, but a much deeper fear at the very heart of your trading endeavor and your life. What does total failure to become a trader mean to you? What does losing all your money mean to you? What does that mean in terms of your opinion of yourself? What will your family think of you? What will your friends think of you?

This is what you're risking every trade, because every small loss takes you potentially one step closer to ultimate failure.

So, even if a person rationally understands the need for stops, and places a stop in the market with full intention of following their plan, they succumb to the greater fear as the trade approaches their stop loss and remove it from the market. After all, the nature of the market is 'uncertainty', so it can surely come back from here and get into profit again. And you can ALWAYS find further technical analysis to support your decision to remove the stop, and hold for just a little longer. And there will ALWAYS be other analyst or news opinions to support the decision to remove your stop.

Sorry if this sounds all rather dramatic, but its reality and it will continue to happen until a person learns to manage their trading decisions despite their emotions. (Note that I didn't say 'control' their emotions. Too many people say that you need to control your emotions, or trade without emotions. Rubbish! You're human and the emotions will happen no matter how much you want to control them. You cannot overcome them by willpower on a consistent basis. You rather need to find strategies to manage your trading decisions despite these emotions).

So, the way forward:

1. Establish total confidence in your system - ensure thorough back testing and forward testing so that you KNOW it provides you with an edge, despite small losses. This will reinforce the fact that small losses are part of the system, and can't hurt you over the long term.

2. Compare results had you let stops run - go over your historical trades, and compare results had you not got out at your stop. Initially you might find that many of them did come back. However work out how much money you can afford to draw down before you either lose everything, or the pain would become unbearable. Then all you have to do is find one or two that don't come back before getting to this point. This will reinforce the danger of letting your stops run.

3. Ensure stops are always placed in the market. If your broker doesn't allow for an exit order attached to an entry order, get a new broker. Despite the fact that some traders still remove the order once it?s in place, it is still harder to do that than not placing one in the first place. So make sure you always place an exit order at the same time as your entry order.

4. Ensure you have a documented trading plan, and procedural steps (eg. checklist) for trade entry, management and exit. Ensure that there are no circumstances within your plan that allow for removal of your stop loss. Then as you trade these steps, act as if you were two people (stick with me here, I know it 's getting weird) - firstly you're the trader, and secondly you're the boss of your trading firm who is a real fan of risk management and following rules. For every action that you as a trader make in entering or removing an order from the market, pause and assume the identity of the boss of the business - would you be happy with the decision that your employee is making, or would you overrule it? Would you sack the trader if he makes the decision he 's about to make? Often this is sufficient to overcome the problem. Assuming the identity of the 'boss' or 'risk management guru' allows our rational side to come through and reinforce the need for taking our small losses.

5. Use an accountability partner. Explain your problem with someone independent from your trading, perhaps your wife, husband or a friend, and ask if they are happy to assist with your trading through ensuring compliance you?re your plan. Then, after each trade (or trading session or week), show them each of your trades. Show them evidence of the stop placed at entry, and held till exit. Enforce some form of punishment if you break your rules - make it something you will really hate. Often we find that it 's easier to hold the stops if someone else is depending on us to do so - the fear of embarrassing ourselves through showing poor discipline can often be enough to counter the fear of loss, and keep your stop order in the market.

It?s a difficult problem to overcome. But through building confidence in your trading strategy through thorough testing, and through disciplined application of your plan with the assistance of your ?alter-ego? boss and your accountability partner, you can overcome this. Never give up.

Lance Beggs

All Rights Reserved. Lance Beggs. Copyright.2008.

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