MetaTrader 5: Unloved Child of MetaQuotes

First thing that you have to know is that MT5 has been written in the new programming language called MQL5 comparing to C++ that was commonly used for MT4. For the regular users it means that all your custom indicators and EA that was created for MT4 are not working anymore. How pity is that? So the first reason why the MT5 is an unloved child is the fact that users are very much involved in MT4 trading.

Moneydance Software 20% Discount Sale

Last year when I was searching for the best personal finance software, I discovered a product called Moneydance. I outlined all the things I like about Moneydance in my Moneydance review. Anyway, it is the software I use, but I don't recommend it for everyone because there is no one-size-fits-all software. If you have to know How to Budget In Multiple Foreign Currencies, there is no better program (in my humble opinion).

The Fibonacci Sequence in Nature

Also, many plants show the Fibonacci numbers in the arrangements of the leaves around their stems. If we look down on a plant, the leaves are often arranged so that leaves above do not hide leaves below. This means that each gets a good share of the sunlight and catches the most rain to channel down to the roots as it runs down the leaf to the stem.

How to Use Stop & Limit Orders to Improve Trading Performance

Placing the limit order price too far above the starting price will mean that the order will not be executed because that price line is not crossed, let alone exceeded. If the sell stop order price is set too close to the starting price, it may not adequately allow for market volatility and potential recovery. A narrow band set for a stop order below the start price will reduce the risk for the trader, but it will also reduce the potential for recovery if the rate rebounds.

5 Reasons to Avoid Holiday Trading on Forex Market

I’m used to answering almost every single day to my clients why they shouldn’t trade during the holidays like Christmas and New Year, Independence Day and Thanksgiving Day. I can proceed according to the list but basically those are major US, UK, Germany and Australia holidays. Today I’m going to clarify the situation regarding all these holidays and try to answer the question: Is it worth trading during the currency market holidays?

Scalping in Forex: Small Steps to Big Money

A scalping trader has to be able to pick the right moment to get into the market and the right moment to exit. In whatever direction a currency pair is moving, there will be advances, pullbacks and further advance. There will be major movements and minor movements. A currency pair may move 100 pips over several hours, a pullback 70 pips for a few more hours, and then make a further advance of maybe 200 pips over three days. These are major moves but are for medium term traders, not scalping traders.

How to Find Reliable Forex Broker

Over the past decade Forex trading has gained high popularity and this has its natural impact on the creation and development of hundreds of brokerage companies. Therefore, to make a right decision and start to collaborate with the broker you find exactly suitable for you is quite difficult. Each of those brokers tries to work out certain methods and new approaches of trading to attract you making you its regular and constant client.

A Crash Course about the Forex Market Structure and Forex Hierarchy

The craze for Forex trading in many parts of the world is beyond imagination. As people look for alternative ways to make money in the face of dwindling incomes and disappearing jobs, more people are discovering online Forex trading as a potential way of making “easy” money. In some countries, you can hardly walk into three streets without seeing some form of Forex-related advert. This situation is not helped by the glittering adverts you see on some websites and financial TV stations.

10 Essential Money Management Rules in Forex Trading

Money management in Forex is one of the most important and yet most ignored topics. Too often we hear and see many trading strategies being advertised all over the place, but very little information out there on money management. Profitable trading is not all about one or two fluke profit trades. Profitability in Forex is the ability to make Forex trading profits over time, with consistency and regularity.

Top 10 Warren Buffett’s Tips and Famous Quotes to Learn

Warren Buffett is one of the richest men in the world. If you’re interested in knowing how to maximize your money, you can learn a lot just from his opinions and rules of life. For example, Buffett believes in spending his money wisely and with purpose. He still lives in the same dwelling he bought over 50 years ago. Many individuals can have more money simply by reducing wasteful spending.

When to Trade Forex and When NOT TO TRADE

It is true that Forex trading is by definition, a market that operates 24 hours a day. This is because there are various key trading zones where market activity in the Forex market is carried out, corresponding to the three major time zone financial districts. These are in London, New York and Asia. It is the activity in these zones, which come up one after the other that give the Forex market its 24-hour appellation.

3 Signs that Your Forex Broker May be A Con Artist

All investors must always be wary of scams when they are placing trades. Forex traders need to be especially careful, because they are placing trades in a largely unregulated, international market. Many Forex investors claim that they have been swindled by their own brokers. Make sure you understand the warning signs that you may be working with a dishonest broker.

Choosing a Forex Broker Using a Rating System and Individual Reviews

Why is it necessary to use the review process on Forex review sites or Forex forums? The answer is pretty obvious. The best way to get a pulse of what it is to actually use a Forex broker’s services is to see it in the eyes of those who have used the services of these brokers. A popular proverb says that it is better to learn from the experience of others than to have to learn from your own experience.

How to Trade with the Fibonacci Tools

The Fibonacci tool in Forex is a sequence of numbers used to determine key levels at which the price action could retrace to, and by extension, continue the move in the direction of the trend. The concept of the sequence of numbers was derived from the Fibonacci sequence, which was discovered by an Italian Mathematician called Leonardo Fibonacci.

3 Forex News Releases You Can Bank Huge With

Every month, there is a calendar of the release of certain important socio-economic and political news items that tell a story of the state of the economy of the nation where that release emanates from. These Forex news releases usually provide the benchmark for market sentiment, which ultimately determines the direction of the currency pairs.

Btmm And Quarter Theory

The Quarters Theory

In the process of combining The Quarters Theory methodology withfunda-mental analysis, favorable underlying fundamentals should be discovered and used to serve as a catalyst for significant price moves from one Large Quarter Point to the next, leading to the successful completion of Large Quarters. In spite of the common perception that fundamental analysis is only suitable for long-term investors, the economic and geopolitical news events that take place daily around the world affect how the...

S90Crossovers Trend Bounces and Holes in the Market

S90 Crossover Pattern

It is my belief that just about anyone, with time and practice, can develop peripheral awareness in the market. Observing uptrends and downtrends that may be viewed within larger time compressions as trends will reveal S90 Crossovers, just as vertical trading ranges will. The illustrations in this chapter offer a few different views of how Fibonacci levels may be observed, as well as trading ranges or trends within trends. Figure 8.1 is a view of trends within trends. This main trend is an...

Automated Trend Tracking Software

There's no guessing required with automated trend-tracking software systems. This type of software, found on some charting packages, allows ongoing adjustments for identification of trends due to constantly changing market conditions. Very few charting packages allow viewers to have access to floating trend lines within the trends. Automated trend-tracking software, such as that shown in Figure 10.5, allows you to view reversal trends within a larger trend when the two trend walls clash, the...

Extreme Levels of a Trading Range

What Are S90 Crossover Extreme Levels within the Forex This seemingly simple question requires a rather complex answer. S90 Crossover extreme levels (ELs) are outer Fibonacci levels found within trading ranges that were former level one and two S90 Crossovers, which are also found within multiple time compressions of a trading range that have historical significance as overlapping Fibonacci points in the market. These levels are measured horizontally, vertically, diagonally, and with inverted...

Multiple Time Compressions

Concorde Forex Group

Most charting packages will not allow traders to view eight time compressions at once. If a multiple compression chart package is available to traders, as shown in Figure 10.4, it will give you the necessary overall quick view of Fib comparisons, as well as a FIGURE 10.2 River Oscillator Indicator ROI signal . Courtesy of Concorde Forex Group, Inc. FIGURE 10.2 River Oscillator Indicator ROI signal . Courtesy of Concorde Forex Group, Inc. FIGURE 10.3 River channel RC signal. Courtesy of Concorde...

Defining Intermediate Highs and Lows

Now the fun begins Consider this, if we can identify a short-term high as any day with lower highs (not counting inside days) on both sides, we can take a gigantic step forward and identify an intermediate term high as any short-term high with lower short-term highs on both sides of it. Hold on to your seat belts because we can take yet another step and say any intermediate term high with lower intermediate-term highs on both sides is-you've got it-a long-term high. Figure 1.5 Pork Bellies...

Return on Assets

Return on assets is the amount a business earns on all its re-sources not only shareholder equity and long-term borrowing but short-term resources generated by effective management of working capital. A business may seek short-term, low-rate loans or buy goods on credit that it resells for cash, thus increasing the assets available for deployment at low or no cost. Those assets contribute to incremental increases in earnings, boosting both return on equity and return on assets. Suppose a...

Rolling Period Analysis

Rolling Period Formula

One problem with the runs test as a measure of performance consistency is that the runs test accounts for whether or not there was value added, but not for the size of the value added. We can use the risk-adjusted return measures to look for both evidence of and magnitude of consistent performance. First we calculate the major risk, return, and relative risk-adjusted return statistics for the period in the spreadsheet below. We can see that Funds B and C dominate Fund A in all respects, with...

The Many Inventions Of Steve Jobs [Slideshow]

Steve Jobs Steve Jobs was a visionary, a technologist, husband, father and an inventor. Jobs is listed on 342 patent applications, either as an inventor or a co-inventor ranging from computer software to staircases. The day before he died, he was awarded a patent on the OS X dock feature found in Macs. Here are some of his other inventions 1 Staircase If you were wowed by the stunning design of Apple stores, you have to thank Steve Jobs. At least when it comes to staircases.

HOWTO View Your Schedule K-1s Online And Import Them Into Turbo Tax

MLPs offer excellent yields, but if you hate paperwork come tax time, MLPs are not for you. First you have to wait at least till March 15th before filing taxes. That's the latest you receive your MLP specific tax document called Schedule K-1s. You'll receive one for each MLP you own and they are sent directly by the partnership firm, not by your broker.

Higher Time Frame Confirmation and Quantifying the Trend

In this section we consider the words intermediate and secondary, with the words long-term and primary interchangeable. We generally refer to a market movement as secondary and describe the trend that constitutes that movement to be intermediate-term. Similarly, we measure a primary move by identifying the long-term trend. Knowing how to use a higher time frame chart to confirm a price signal on a lower time frame is a skill that can reward a trader greatly. Many students will become impatient...

Trading Game Plan

There are many considerations that must be brought together in order to determine the best way to trade options. Following the markets throughout the years has enabled us to make numerous observations concerning the trading activity of underlying securities as well as their related option markets. While we do not proclaim to be experts in the ways of option trading, there are certain items that we look for before we will trade a particular option market. Our plan of attack is not necessarily...

Td Fib Range

As we indicated earlier, it's easy for a trader psychologically to jump upon an existing trend or participate with the majority of traders, but it's much more difficult to operate against the prevailing trend by anticipating likely trend reversal levels. To overcome this apprehension and accomplish this goal we researched what market characteristics preceded or coincided with possible market turning points. What we came up with was an indicator called TD Fib Range. TD Fib Range gets its name...

Td Line Gap Rebo

Due to the high levels of market volatility over the recent years and the market's tendency of forming a series of consecutive price gaps, creating numerous TD Line Gaps, we have added an additional element to perfect low-risk entries for TD Line Gaps. We refer to these enhanced TD Line Gap indications as TD Line Gap REBO, since we combine the critical TD REBO component to the TD Line Gap indicator. TD REBO is an indicator that identifies upside and downside levels at which market price...

Measuring the Smoothness of the Equity Curve

Equity Curve

This section shows how to use linear regression analysis to measure the smoothness of an equity curve. We will use contrived data to perform actual calculations. You will understand how to use standard error and how to calculate the risk reward ratio. In later sections of this chapter we apply these ideas to market data and trading system calculations. The main advantage of using linear regression analysis is that it provides a consistent framework to analyze every equity curve. The equity...

Implied Volatility Dynamics

In the previous chapter we looked at ways to measure and forecast realized volatility. In a sports gambling context this would be akin to us forecasting which team would be most likely to win the game. In this chapter we look at the ways implied volatility can move. This would be the equivalent of predicting how the bookmakers' line might move before the game. Remember that we are not trading either realized or implied volatility directly. We are trading the spread between the two, so edge can...

Ratio Analysis Of The Crb Index Versus Bonds

This section will begin with a comparison of the CRB Index and Treasury bonds. As stated many times before, the inverse relationship of commodity prices to bond prices is the most consistent and the most important link in intermarket analysis. The use of ratio analysis is another useful way to monitor this relationship. Ratio charts provide chartists with another indicator to analyze and are a valuable supplement to overlay charts. Traditional technical analysis, including support and...

Non Recombining Lattices

Figure 7I.1 illustrates a five-step non-recombining lattice for solving an American call option. Each node branches into two pathways that do not meet with other branches along the way (i.e., they do not recombine). The lattice shown here is the first lattice of the underlying asset. Asset 100 Cost 80 Maturity 5 Years Risk-free 5 Volatility 40 100.0

Three Classic Tools to a Three Step Setup

And that's because the motives and emotions that rule the market have not changed. Fear and greed rule and probably always will. Because of this fact, I purposely sought out books written in the early 1900s because the crutch of television and computers were not available to these traders. In my opinion, these books focus on price and chart patterns more than books written in the latter part of the century. Price and chart patterns are the most direct way to measure market emotion. Analyzing...

The Naked Trader Secret Traffic Lights System

I call it my 'traffic lights' system red for sell, amber for hold and green for buy I highlighted this in my first book but I've refined it a lot since then and there are quite a few additions -so readers of Book One take note What it's really done for me is enable me to quickly tell from a results report or an AGM statement what the state of play is. I can tell in just a few seconds whether to carry on looking at the company or forget it immediately. Once you have installed this you will...

The Wilkie Model Structure

Wilkie Model

The Wilkie model Wilkie 1986, 1995 was developed over a number of years, with an early version applied to GMMBs in the MGWP Report 1980 and the full version first applied to insurance company solvency by the Faculty of Actuaries Solvency Working Party 1986 . The Wilkie model differs in several fundamental ways from the models covered so far It is a multivariate model, meaning that several related economic series are projected together. This is very useful for applications that require...

Fibonacci Price Projections Or Objectives

Fibonacci Relationships

Last but not least, in this chapter I will show you how to apply Fibonacci price projections to the chart we are analyzing. These projections are sometimes also called price objectives. I tend to indicate them on my charts by the letters PO for price objectives rather than projections. These price projections are run from three data points and are comparing swings in the same direction.

Why Do All Investors Hold the Market Portfolio

Optimal Risky Portfolio

What is the market portfolio When we sum over, or aggregate, the portfolios of all individual investors, lending and borrowing will cancel out since each lender has a corresponding borrower , and the value of the aggregate risky portfolio will equal the entire wealth of the economy. This is the market portfolio, M. The proportion of each stock in this portfolio equals the market value of the stock price per share times number of shares outstanding divided by the sum of the market values of all...

Adding a trendline to an Excel candlestick chart

Tableau Candlestick Chart

Another function you can enjoy when using Microsoft Excel for charting is the trendline function. It's found in the same area as moving averages see the preceding section , so if you can add a moving average, you can easily add a trendline. A trendline is a line that indicates the direction of a trend either higher or lower. The line is usually drawn based on the lows in the case of an uptrend or the highs based on a downtrend of the price action in the trend. For more information on trendlines...

Concept Checkers Efficient Capital Markets

The two major tests employed to test the weak-form efficient market hypothesis EMH are A. event studies and runs tests. B. autocorrelation tests and runs tests. C. event studies and performance tests. D. time-series tests and cross-sectional tests. 2. Which of the following forms of the EMH assumes that no group of investors has monopolistic access to relevant information D. Both weak and semistrong form. 3. The strong-form EMH asserts that stock prices fully reflect which of the following...

Betas and Expected Returns

Because nonfactor risk can be diversified away, only factor risk commands a risk premium in market equilibrium. Nonsystematic risk across firms cancels out in well-diversified portfolios, so that only the systematic risk of a portfolio of securities can be related to its expected returns. The solid line in Figure 11.1A plots the return of a well-diversified Portfolio A with (3A 1 for various realizations of the systematic factor. The expected return of Portfolio A is 10 this is where the solid...

Find The Equilibrium Expected Excess Return On This Stock Using The Apt

We have assumed so far that there is only one systematic factor affecting stock returns. This simplifying assumption is in fact too simplistic. It is easy to think of several factors driven by the business cycle that might affect stock returns interest rate fluctuations, inflation rates, oil prices, and so on. Presumably, exposure to any of these factors will affect a stock's risk and hence its expected return. We can derive a multifactor version of the APT to accommodate these multiple sources...

The bullish squeeze alert pattern

The Bullish Squeeze Alert Pattern

The bullish squeeze alert pattern is one of my very favorite bullish patterns. It's a versatile three-stick pattern, and it pops up on a relatively frequent basis, meaning that the opportunities to trade it are more common than some of the other patterns I discuss. Spotting the bullish squeeze alert pattern The rules that govern the formation of a bullish squeeze alert allow for a little wiggle room. The strictest rule is that the first day of the pattern must be a down day. After that, the...

Recognizing a bullish meeting line pattern

Bullish Meeting Lines Pattern

The setup day of this pattern is a long black candle, and the signal day is a long white candle. The closing prices of the two days are equal or nearly equal, which indicates that the bears controlled the setup day. There's also a gap down opening, which shows that the bears are still in control at the beginning of the signal day, but the bulls soon arrive on the scene. As the signal day progresses, the low opening price brings in buying activity and a close that reaches the previous day's...

Leith Seegers Mc Kahan Real Estate Agent

Renata Circeo

While the research for this book began in the spring of 2004, the idea was born nearly two years earlier when we interviewed Cristina Martinez for our first book, The Millionaire Real Estate Agent. Cristina had built an amazing real estate sales business that generated over 4 million in gross income each year by catering to residential real estate investors. The stories she told inspired us and pointed us down the winding path that ends with these pages. Thanks, Cristina. I'd be remiss not to...

The Money Matrix

Money Matrix Pyramids

Most people are in the dark about money. They live from paycheck to paycheck in a twilight world with only the dim candle of conventional financial thinking to light the way. As a result they have a kind of finan I never let anyone rain on my parade or wreck my day. I never listen to anything negative. I'm in charge of my attitude. I had a lot of energy, and I had a plan, so it took me only four years to become a millionaire. Mary McDonald Millionaire Real Estate Investor Coopersburg, PA cial...

NBar Rallies Declines

Russell 2000 Tick Chart

Stocks making new Highs and new Lows with high volume attract momentum players. Momentum players continue to push these stocks until the supply or demand diminishes. But as in any rally or decline, these trends stop and reverse. The prices become oversold and overbought creating a condition for exhaustion of the supply and demand. Hence, if these prices reverse could be brief , an opportunity is presented. Traders who wait and take advantage of these counter-trades are daring and risky, but...

General Re Corporation

In 1996 Buffett paid 2.3 billion to buy the half of GEICO he didn't already own. Two years later, he paid seven times that amount about 16 billion in Berkshire Hathaway stock to acquire a reinsurance company called General Re.4 It was his biggest acquisition by far some have called it the single biggest event in Berkshire history.5 Reinsurance is a sector of the insurance industry not well known to the general public, for it doesn't deal in the familiar products of life, homeowner's, or auto...

How To Use Brain Trading System

BrainTrading System indicator package includes four main independently calculated indicators BrainTrendl, BrainTrendlStop, BrainTrend2, BrainTrend2Stop and four auxiliary indicators used for pictorial presentation of main indicators BrainTrendlSig, BrainTrendlStopLine, BrainTrend2Sig, BrainTrend2StopLine. BrainTrendl, BrainTrendlSig, BrainTrendlStop, BrainTrendlStopLine , BrainTrend2, BrainTrend2Sig, BrainTrend2Stop, BrainTrend2StopLine , BrainTrendl, BrainTrendlSig, BrainTrendlStop,...

HOWTO Do A 401K Rollover Correctly

On an average, a person will switch about 9 jobs during his working career. If he was lucky and smart, he probably enrolled in 401K plans when available. Now, if he didn't bother consolidating his 401Ks, that'll be 9 different accounts to remember at the time of retirement When you decide to leave a company, make a graceful, but clean break and don't leave anything behind ESPECIALLY your 401K It isn't really that hard to do a 401K rollover.

How to Afford to be a Stay at Home Wife or Mom

For over four years now, my wife and I have enjoyed living off one income. While our lifestyle might not be appealing to some, we absolutely love it. Every day I thank God that he has allowed our family to grow so close. It is a blessing my wife is a stay at home mom. She helps create such a healthy family environment. Since this is a sensitive topic to some, let me remind you that this post is not designed to convince anyone to stay home. Nor is it to say you are a bad parent if you don't.

Net Present Value Method

The net present value method focuses on selecting projects that maximise the 'net present value' NPV generated for the company Net present value is the net monetary gain or loss from a project, computed by discounting all present and future cash inflows and outflows related to the project. Using the NPV method, all future cash flows related to an investment project are discounted back to time 0 i.e. t 0 , taken to represent the start of the investment project. The NPV represents a specific kind...

Turtle Soup Plus One

The Turtle Soup Plus One setup is almost identical to the Turtle Soup setup, except it occurs one day later. It too, can be traded in all markets and in all time frames. We are looking for the market to make a new intermediate-term high low and then reverse the following day With so many trend-following breakout players in the investment arena, the rewards are large when a breakout fails and reverses. This is especially true if the market has given players a chance to add on to existing...

Distribution

The measurement of distribution is very important because it tells you generally what to expect. We cannot know what tomorrow's S&P trading range will be, but we have a high level of confidence that it will fall between 300 and 800 points. We have a slighdy lower confidence that it will vary from 400 to 600 points. We have virtually no chance of picking the exact range. The following measurements of distribution allow you to put a value on the chance of an event occurring. The frequency...

Level Three The Competent Trader

The chief object of education is not to learn but to unlearn. GOAL TO GAIN THE ABILITY TO READ THE MARKET ACCURATELY AND KNOW THE RESPONSES THAT WILL MAXIMIZE RETURN ON INVESTMENT. THIS REQUIRES LEARNING TO USE PROFITUNITY PLANNED TRADING AND PREPARING TO USE PROFITUNITY TRADING PARTNER . We are now entering the third level in our journey to Level Five. A pianist at this level is able to play a written piece of music perfectly. This requires reading and recognizing the instructions given on the...

Springs And Upthrusts

Most of the time, the markets are not in a trending mode but rather in a lateral range. On such occasions, the market is in a relative state of harmony with neither the bulls nor the bears in charge. The Japanese word for tranquility and calm is wa. I like to think of markets that are bounded in a horizontal trading zone as being in a state of wa. It is estimated that markets are in a nontrending mode as much as 70 of the time.' As such, it would be valuable to use a trading tool that provides...

Cost Comparison Method

For the cost comparison method CCM the target measure is, as the name suggests, the cost s of an investment project. It is assumed when using the CCM that the revenues of mutually exclusive investment alternatives and the option to forego the investment, if this is a permissible alternative are identical and that only the costs differ. Costs analysed include personnel expenditures wages, salaries, social expenditure etc. , cost of raw materials, depreciation, interest, taxes and fees, and costs...

Static Payback Period Method

The target measure used for the static payback period SPP method is the time it takes to recover the capital invested in the project. It can be calculated based on average figures or on total figures. Average figures are used here. The payback period of an investment project is the period after which the capital invested is regained from the average cash flow surpluses generated by the project. The SPP method offers a measure of the risk connected with an investment. Judging the absolute and...

Decision Theory

Decision theory rules and criteria may be applied when alternative scenarios for uncertain environmental and company conditions are included in a model. This helps to consider the effects of uncertainty in the project appraisal and reveals the expected outcome of each project alternative under the various scenarios. Usually, only limited numbers of alternatives and scenarios are considered, each involving a distinct set of input data. The decision situation can be illustrated with the help of a...

Internal Rate of Return Method

Internal Rate Return Method

The internal rate of return IRR method, considered next, is largely analogous to the NPV method. Only two assumptions are modified - concerning the reinvestment of free cash flow surpluses and the balancing of capital tie-up and economic life differences. Also, a different target measure is considered the internal rate of return. The internal rate of return is the rate that leads to a NPV of zero when applied as the uniform discount rate. The internal rate of return represents the interest...

Average Rate of Return Method

The average rate of return ARR method differs from the PCM in regard to its target measure. The ARR method combines a profit measure with a capital measure to focus on the return expressed as a rate of interest earned on the capital invested. Both the profit measure and the capital measure can be defined differently. Average capital tie-up can be used as the capital measure, while the profit measure can be determined by adding average profit and average interest. This leads to the following...

Visualisation of Financial Implications VoFI Method

The visualisation of financial implications VoFI method is based on the ideas of Heister 1962 that were later developed by Grob 1993 . Its defining feature is a comprehensive financial plan that considers all cash flows connected with an investment project. The VoFI comprehensive financial plan considers the economic consequences of an investment project, specifically in regard to The amounts and proportions of internal funds and debt capital used. The amounts and timing of debt redemption from...

Strategic Analysis Tools Supporting the Capital Investment Decision Making Process

While important in themselves, even the most rigorous financial analysis tools cannot capture all of the strategic dimensions of capital investment projects, since many of them are not amenable to quantification. Consequently, researchers have looked for other analysis tools that do help decision-makers to incorporate these important aspects. Broadly, two avenues have emerged for developing alternative strategic investment appraisal techniques. The first involves modifying established...

Utility Value Analysis

Utility Value Investment

This method seeks to analyse a number of complex alternatives, with the aim of ordering them according to the preferences of the decision-maker in a multidimensional target system. The ordering is carried out by calculating so-called utility values for the alternatives. In utility value analysis, multiple target criteria are weighted according to their importance to the decision-maker. The ability of the different alternatives here, the investment projects to fulfil each target is measured and...

Profit Comparison Method

As the name suggests, the profit comparison method PCM differs from the cost comparison method because it considers both the cost and revenues of investment projects. The target measure is the average profit, which is determined as the difference between revenues and costs. Apart from this difference, all of the other assumptions made in the CCM continue to apply for PCM. Absolute profitability is achieved if an investment project leads to a profit greater than zero. Relative profitability is...

Annuity Method

The annuity method AM uses the same discounted cash flow model as the NPV method. The only change is a different target measure, the annuity An annuity is a series of cash flows of equal amounts in each period of the total planning period. The annuity can be regarded as an amount that an investor can withdraw in every period when undertaking the investment project. The annuity of an investment project is equivalent to the NPV of that project, i.e. it is possible to equate both measures...

Historical Background

Sokyu Homma

Through Inquiring cf the Old We Learn the New This chapter provides the framework through which Japanese technical analysis evolved. For those who are in a rush to get to the meat of the book that is, the techniques and uses of candlesticks , you can skip this chapter, or return to it after you have completed the rest of the book. It is an intriguing history. Among the first and the most famous people in Japan to use past prices to predict future price movements was the legendary Munehisa...

Tings Cash Flow From Operations Forecast

Cash Flow From Operations Forecast for 2008 Fixed capital investment is equal to capital expenditures because there are no asset sales , which is equal to the change in gross PP amp E Working capital investment is the change in the working capital accounts, excluding cash and short-term borrowings WCInv AcctsRec2008 Inv2008 - AcctsPay2008 - AcctsRec2007 Inv2007 - AcctsPay2007 WCInv 30 40 - 20 - 15 30 - 20 50 - 25 25 Given that depreciation is the only noncash charge, we can calculate FCFF from...

Fcff And Fcfe Calculations

LOS 42.d Discuss the appropriate adjustments to net income, earnings before interest and taxes EBIT , earnings before interest, taxes, depreciation, and amortization EBITDA , and cash flow from operations CFO to calculate FCFF and FCFE. You are in danger of being buried alive by formulas in this topic review. We'll show you the ones you need to know for this LOS without showing you the derivations you're welcome . The basic idea is that we can arrive at FCFF by starting with one of four...

Concept Checkers Capital Structure and Leverage

Business risk is NOT affected by 2. Which of the following choices is a key determinant of operating leverage C. The competitive nature of the business. D. The trade-off between fixed and variable costs. 3. Which of the following statements is TRUE The optimal capital structure A. minimizes the weighted average cost of capital WACC and maximizes the share price. B. minimizes the cost of equity and maximizes the WACC. C. minimizes the cost of debt, the cost of equity, and the WACC. D. is...

The Taylor Trading Technique

In 1950, George Douglass Taylor published his book method of day trading,1 which he had been using for many years in both the stock and grain markets.2 The method is based on the experience of discipline and timing, but is carefully set down and can be implemented in either a sophisticated or simplified state. The system is intrinsically cyclic, anticipating 3-day movements in the grains. These 3 days can vary in pattern when they are within an uptrend or downtrend. Taylor's explanation of his...

FCFE Valuation versus Dividend Discount Model Valuation

The discounted cash flow model that uses FCFE can be viewed as an alternative to the dividend discount model. Since the two approaches sometimes provide different estimates of value, it is worth examining when they provide similar estimates of value, when they provide different estimates of value and what the difference tells us about the firm. There are two conditions under which the value from using the FCFE in discounted cashflow valuation will be the same as the value obtained from using...

Upper And Lower Bounds For Option Prices

In this section, we derive upper and lower bounds for option prices. These do not depend on any particular assumptions about the factors mentioned in the previous section (except r 0). If the option price is above the upper bound or below the lower bound, there are profitable opportunities for arbitrageurs. An American or European call option gives the holder the right to buy one share of a stock for a certain price. No matter what happens, the option can never be worth more than the stock....

Stock Market Profits

A Guide to Professional Trading For a Living INCORPORATED PO BOX 6206 GREENVILLE, SC 29606 Books and Gifts for Investors and Traders Michael S. Jenkins was bom in Schenectady, New York on March 12, 1949. From earliest childhood lie was fascinated with the stock market and studied every book and publication he could find regarding the subject. He studied Economics and Business Administration at Washington & Ixc University and graduated with a B.S. in Commerce in 1971. In 1975 he received an MBA...

Performance Evaluation

The top part oj the table shows the rate of return achieved by ABC. S&P .500. and T-bills aver a 10-year period The lower portion shows the leaven and Sharpe indices The top part oj the table shows the rate of return achieved by ABC. S&P .500. and T-bills aver a 10-year period The lower portion shows the leaven and Sharpe indices and the estimate s of the standard deviation is the square root of that, It is aiso useful to calculate the geometric mean rate of return, which is M (1 + i)0 +r2) (1...

Low-Cost, Diversified Investment Portfolio with Only Three Funds

You've heard it over and over, Diversify your investments But how exactly do you do that And how can you do it without getting complicated This simple guide will show you how to diversify your investments with only three funds. Keeping It Simple & Low-Cost I'll be the first to tell you that this is not an optimal portfolio. It's not the best, but it's a lot better than a lop-sided portfolio full of high fee funds. There are some costs to using a simple plan for your investments.

Five Things Everyone Should Know About Investing in Mutual Funds

Not everyone needs to know everything. I have an uncle who was recently honored as a university fellow at Lakehead University (Congratulations, Uncle John). He specializes in the study of Banach spaces and abstract convexity. Now I have no idea what any of that means and furthermore have no idea how someone can specialize in it. So I am glad that I don't need to know that. But, in the field of math I do need to know how to add, subtract, multiply, and divide.

Explain The Shape Of Feasible Region Of Risky Assets

The Shape The Feasible Region

This problem cannot be reduced to the solution of a set of linear equations It is termed a quadratic program, since the objective is quadratic and the constraints are linear equalities and inequalities. Special computer programs are available for solving such problems, but small to moderate-sized problems of this type can be solved readily with spreadsheet programs. In the financial industry there are a multitude of special-purpose programs designed to solve this problem for hundreds or even...

The Onefund Theorem

When risk-free borrowing and lending are available, the efficient set consists of a single straight line, which is the top of the triangular feasible region. This line is tangent to the original feasible set of risky assets (See Figure 6.14.) There will be a point F in the original feasible set that is on the Sine segment defining the overall efficient set. It is clear that any efficient point (any point on the line) can be expressed as a combination of this asset and the risk-free asset. We...

Unlimited Funds Versus Capital Rationing

It a firm has unlimited access to capital, the firm can undertake all projects with expected returns that exceed the cost ot capital. Many firms have constraints on the amount of capital they can raise, and must use capital rationing. If a firm's profitable project opportunities exceed the amount of funds available, the firm must ration, or prioritize, its capital expenditures with the goal ot achieving the maximum increase in value for shareholders given its available capital.

Factors That Influence a Companys Liquidity Position

In general, a company's liquidity position improves if it can get cash to flow in more quickly and flow out more slowly. Factors that weaken a company's liquidity position are called drags and pulls on liquidity. Drags on liquidity delay or reduce cash inflows, or increase borrowing costs. Examples include uncollected receivables and bad debts, obsolete inventory takes longer to sell and can require sharp price discounts , and tight short-term credit due to economic conditions. Pulls on...

Getting Started with Crystal Ball Monte Carlo Simulation

This appendix serves as a guide to getting started with Crystal Ball's Monte Carlo simulation software provided in the enclosed CD-ROM. To begin using your sample simulation software, run the setup.exe file in the Crystal Ball simulation folder in the CD-ROM. Follow the online instructions. Once installation is complete, restart the computer and open Excel. The Crystal Ball splash screen should appear momentarily, and the icon bar in Figure 9B.1 should appear in Microsoft Excel . To get started...

The Rule of Alternation

Elliott Wave Theory is based on the Rule of Alternation. Simply stated, this means that in financial markets and in all of the created universe, for that matter every action has an opposite action, or reaction. In its application to technical analysis, this rule was probably first observed and applied by Cicorgc Cole, who wrote a seminal work on technical analysis entitled, Graphs and Their Application to Speculation.Although Cole had a different name for it, he gave the following description...

The solution

In the last chapter I looked at the practical application of Elliott wave theory, how it is taught by many of the standard books, courses and software programs, and came to the conclusion that in practice the theory did not work for long enough periods for it to be a reliable technical analysis method. Having reached this conclusion, where can you go from here Rather than simply giving up and throwing the theory away I spent years looking at what (if any) parts of the theory produced reliable...

Applying Monte Carlo Simulation To Obtain A Real Options Result

Monte Carlo simulation can be applied to solve a real options problem, that is, to obtain an option result. Recall that the mainstream approaches in solving real options problems are the binomial approach, closed-form equations, partial-differential equations, and simulation. In the simulation approach, a series of forecast asset values are created using the Geometric Brownian Motion, and the maximization calculation is applied to the end point of the series, and discounted back to time zero,...

Introduction To The Real Options Analysis Toolkit Software Cdrom

The enclosed CD-ROM has several demo software programs, including the Real Options Analysis Toolkit software, Crystal Ball's Monte Carlo Simulation software, as well as example student problems and solutions. Appendix 9A lists the Excel-based functions available on the Real Options Analysis Toolkit software, while Appendix 9B provides a quick-start overview of using Crystal Ball's Monte Carlo simulation package. The remainder of this chapter is devoted to providing examples of short real...

Real Options Analysis Toolkits Function Description for Excel

These functions are available for use in the full version of the Real Options Analysis Toolkit software. Once the full version is installed, simply click on Start, select Programs, then Crystal Ball and Real Options Analysis Toolkit. Next, select Functions. The software will be loaded into Excel, and the following models are directly accessible through Excel by typing them directly in a spreadsheet or by clicking on the Equation Wizard and selecting the Financial All categories. Scroll down to...

Option To Abandon

Suppose a pharmaceutical company is developing a particular drug. However, due to the uncertain nature of the drug's development progress, market demand, success in human and animal testing, and FDA approval, management has decided that it will create a strategic abandonment option. That is, at any time period within the next five years of development, management can review the progress of the research and development effort and decide whether to terminate the drug development program. After...

Introduction of the Fibonacci Trading Tools

In general, for corrections with Fibonacci-related trading tools, an impulse wave that defines a major market trend upward or downward will have a corrective wave before the next impulse wave reaches new territory. This occurs in both bull market and bear market conditions. Analysis would be easy if we could detect a single general pattern of corrections. The problem is that there can be many more price patterns than impulse waves in the commodities, futures, stock index futures, stocks, or...

Entry Rules and Exit Rules

The basic strategy for trading the markets using PHI-ellipses is, first, to wait for a price move to develop inside the borders of a PHI-ellipse and, second, to act counter to the main trend direction as soon as the end of the PHI-ellipse has been reached and market pricing leaves the PHI-ellipse. Catching the rhythm of market moves by attaching PHI-ellipses and adding countertrend trades to each other is illustrated in Figure 5.10. Figure 5.10 Basic scheme of investment by using PHI-ellipses.

5 Profitable Low Risk Options for Investing a Lump Sum of Cash

After months of attempting to transfer funds from the sale of our house from PNG to the USA, we finally were able to get the first batch of funds transferred into our US bank account. Since we're currently very content renters, we've decided to delay buying a house. We may wait four months, or we may wait four years. We have no idea, and we love the flexibility renting offers. However, now that we've got the funds, it is time to decide the best place to park the money .

Finding the Overall Effective Yield of a Wraparound Mortgage

The first step in finding the effective yield of the bonus is to fill out the wraparound analysis chart (Table 10.1). In looking at the amortization chart for the wraparound mortgage and the existing financing, you will be able to note the year in which the build-up of difference stops and amortization of that balance begins. This is significant since it establishes the year the bonus begins to benefit the mortgagee. In the Hodges Shopping Center Case Study (Table 10.1), this occurs in the...

Turtle Soup

The Turtle Soup' pattern typifies the basic testing concept in swing trading, It is a volatile pattern with the potential for substantial gains. It is definitely not as easy to trade as it looks, but the reversals that follow through indicate a potential change in trend of significant duration, and a very tight risk point is predefined. Before looking at the rules for this pattern, let's talk about its background. In the 1980s, a group of traders known as the Turtles used a system that...

Fixed ratio MM

Imagen Fixed Ratio

Fixed ratio MM was first introduced by Ryan Jones in his book The Trading Game in 1999 13 . In the fixed ratio position sizing the key parameter is the so called delta. This delta is the dollar amount of profit per traded unit to increase the number of units by one. A delta of 10,000 means that if you're currently trading one lot you would need to increase your account equity by 10,000 to start trading two lots. Once you get to two lots, you would need an additional profit of 20,000 to start...

Debt in the Bible | Is Borrowing Money a Sin?

Here's my summary of what the Bible says about debt it's not a wise thing to do, but it's not a sin . Honestly, the Bibles doesn't have an exclusively negative stance on debt. There are situations where borrowing is a good option. Be careful not to harbor this wicked thought The seventh year, the year for canceling debts, is near, so that you do not show ill will toward your needy brother and give him nothing. He may then appeal to the Lord against you, and you will be found guilty of sin.

Switching brokers? What you need to know to avoid getting hit with fees!

So you've been thinking of switching your online broker. But how does this work What happens to the stocks you hold Do you have to sell and re-purchase them Are there fees involved Taxes If you've never switched a broker before, fear not. It isn't that complicated, though for the uninformed, you may be hit with exit fees by your existing broker. In this HOWTO I'll even show you how to minimize or avoid this. Exit fees vary from 50 to 95.

Bridgeway Capital Management

Bridgeway Capital Management is a small and unique fund shop founded in 1993 by John Montgomery. Montgomery began as a research engineer at MIT but became interested in applying quantitative computer models to the stock market and received an MBA from Harvard University in 1985. Bridgeway funds have very low expense ratios and high tax efficiency, and Montgomery is respected by many industry observers for his integrity and straightforward shareholder letters. Bridgeway funds charge a management...

The Four Stages of Tax Sensitivity

The distance between the holdout and the tax-sensitive manager covers a broad territory, and it's useful to classify investment managers by the degree of their tax sensitivity. There are four stages to developing the skills required. Moving from one stage to the next often entails a conceptual shift or a willingness to add complexity to the management process. Stages 1 and 2 require a philosophical shift from pretax approaches. Stages 3 and 4 require a technological infrastructure.

Tax Aware Investment Management

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If You Own Mutual Funds Or ETFs, Don't Ignore This Metric

100 of our RETIREMENT FUNDS BEAT THEIR 5-YEAR LIPPER AVERAGE This is an ad from T.Rowe Price promoting their retirement funds. But ads like these are all too common in the mutual fund industry. Open any business or investing magazine and you'll find all sorts of metrics based around Lipper.

How to Diversify Your Money for Secure Retirement Investments

This is a guest article by Tal Baron who writes for Currenssee a Forex trading Social Network.Tal was able to explain how to channel your money into some diversify secure means of retirement investments,this is indeed a must read article. With the recent debt ceiling issues and the ongoing threat of a double-dip recession, the future of investing has suddenly become very uncertain especially in the United States.

Measures of Tax Efficiency

A citizen can hardly distinguish between a tax and a fine, except that the fine is generally much lighter. There are fo ur key cal culat ions that practitioners may encounter for measuring the tax efficiency of the portfolio management process Ac co untant's ratio amount of long-term capital gains realized amountoftotal capitalgains realized C ap ture ratio Rat Rbt, where R equals the return after-tax and Rbt equalsthe return before-tax Relative wealth measure1 Rat - Rbt l Rbt X 1,000...

Taxation Of Mutual Fund Income

Investment returns of mutual funds are granted pass-through status under the U.S. tax code, meaning that taxes are paid only by the investor in the mutual fund, not by the fund itself. The income is treated as passed through to the investor as long as the fund meets several requirements, most notably that at least 90 of all income is distributed to shareholders. In addition, the fund must receive less than 30 of its gross income from the sale of securities held for less than three months, and...

Shorter Clearer Mutualfund Disclosure May

Mutual-fund investors are about to get shorter and clearer disclosure documents under new rules adopted by the Securities and Exchange Commission earlier this week. But despite all the hoopla surrounding the improvements including a new profile prospectus and an easier-to-read full prospectus there's still a slew of vital information fund investors don't get from any disclosure documents, long or short. Of course, more information isn't necessarily better. As it is, investors rarely read fund...

Debt Paying Ability or Solvency Ratios

Stock analysts, investment portfolio managers, individual investors, investment bankers, economists, and others are interested in three key financial aspects of a business cash flows, solvency, and profit performance. Cash flow analysis does not use ratios (at least not yet). In contrast, the analysis of solvency and profit performance makes use of several benchmark ratios. Bankers and other lenders when deciding whether to make and renew loans to a business direct their attention to certain...