Learn FOREX – How A Connected World Can Help You Make Money Trading FOREX

Markets do not exist in isolation and to learn FOREX well you must understand that stocks & shares, bonds, futures, indices, commodities, and FOREX are all interrelated. The world is becoming more and more connected. It is very easy for individual traders and large trading institutions to move money between different tradeable items. The economies of the world are also tightly bound as was demonstrated very effectively in the recent crash from 2008.

There is a whole branch of trading called inter-market analysis where traders study the relationships between different trading instruments. The intention is to find correlations that can help predict the future movement in the markets and to make money. Many of the correlations are related to the perception of risk and where money is moved at any one time. The big players can transfer their investments very quickly to where they believe they will get higher returns or safer.

What kinds of correlations are there and why do they work?

Well let’s take some examples.

Inflation & Gold

If there is a perception in the market that price inflation is increasing then the value of traders’ money is decreasing unless they do something. One of the favored instruments to invest in at this time is Gold. You can see this presently (April 2011) where the price of Gold is rising steadily because it is seen as a hedge against inflation. In other words investors are buying Gold so as to offset the value of their money as it decreases over time.

Oil versus US Dollar

There is an inverse relationship between the value of the US dollar and oil, or at least there seems to be. Why would this happen? Well there are many theories such as:

a) As the value of the dollar drops, the price of dollar denominated commodities has been boosted.

b) If the price of oil goes up, and a country is a net importer of oil such as the US, the this will worsen their balance of trade deficit, and this weaken the value of their currency.

c) The dollar is coming under pressure as the reserve currency for purchasing oil, with other alternatives such as the euro becoming more prominent. This has started to undermine the value of the dollar.

I suspect is could be a mixture of all these examples and others. The important point is that as a trader we can take advantage of this as we trade. There is also a correlation between the Canadian CAD and the oil price as well due to the fact that Canada is a major oil exporter.

AUD (Australian Dollar) and GOLD

The AUD has a relationship with the price of GOLD because Australia is a major exporter of Gold. Therefore the more the country can sell the better its trade deficit will be and the value of its currency will rise. Because the New Zealand economy is so inter-related with the Australian there is also a strong correlation between the value of the NZD with the price of Gold.

To summarise, its important to understand these relationships because they can help you fortify your analysis on a particular currency pair. This is another conjunction; if your charts are telling you the EURUSD is dropping and you can see that the price of oil is going up then that is more supporting evidence. For more information click on the link below.

A Savings Plan Where You Can Actually Make Money

Many folks want a savings plan where they can actually make money, not just miserly interest. Also, many would consider investing money in stocks and bonds if they felt it could be done without much risk. Here’s a custom-built savings plan and investment program I offered clients when I was an active financial planner.

We’ll use Jack as our example. Jack wanted a savings plan that was safe and paid more interest than he could earn at the bank. Plus, he didn’t want too much money accumulating in the bank where it was so readily available because he was always tempted to take a withdrawal and spend it.

Jack had never been into investing money in stocks and bonds to make money because he abhorred risk and did not know how to invest. He also disliked and did not trust the investment industry or those who worked in it. Because he knew he needed an investment program as well as a savings plan if he wanted to earn higher returns, he decided to talk to me.

We started Jack’s first financial adventure with $600 per month flowing (automatically) from his checking account to a large mutual fund family. All of it went directly into a money market fund where it was safe and earned a competitive interest rate. Plus, this gave us flexibility because money could easily be moved from there to any of the other funds offered by the fund family.

The money market fund was earmarked as his savings plan. Of the $600 that went in each month, $300 would stay there. The other $300 was his investment plan and would automatically flow each month into three different funds, $100 each.

The three other funds were: a short-term bond fund, an intermediate-term bond fund and a conservative stock fund. The bond funds gave him more interest in the form of dividends, which were simply automatically reinvested to buy more shares. The stock fund offered both dividends (that were also reinvested) and growth.

Jack was now investing money as well as saving it. He was finally an investor, accepting only a moderate to low level of risk overall. As money flowed from his money market fund each month to his bond funds and stock fund, each $100 purchase would automatically buy more shares when the price was down and fewer when the price was higher.

This is called DOLLAR COST AVERAGING, and it works to lower the average cost per share. Plus, as Jack’s dividends reinvested periodically he would accumulate more shares.

There you have it. A savings plan and an investment program all in one simple package. Jack was still a client of mine 20 years later and eventually allowed me to be a bit more aggressive in my recommendations. But he still does not trust the investment industry.

Fast Moneymaking Ideas: Make Money on Your Free Time

These days, it is a fact that money does not go as far as it used to, which is why a lot of people are spending long hours at work just to support their needs. Generating ideas to earn money is not that hard because you only need to be creative and determined most of the time.

Use Your Free Time To Earn Money

Aside from regular work, you can also use your free time to do something that you enjoy and earn at the same time. Of course, it will be better and longer lasting if you choose a moneymaking scheme that is close to your hobby, and not something that you will get bored with easily.

There Are A Lot of Ways To Make Money

Fast moneymaking ideas come in different forms. Some of them will require you to go out and interact with people, while others need you to stay home and communicate in some other way.

Work on Paid Surveys

If you are a mother who wants to earn money from home, you can do paid surveys for companies. You only need to have a little monetary investment, and once you have passed all the requirements, you are ready to start earning big money by just telling your honest opinions. The advantage of this option is that you earn per survey that you finish, and the pay is also satisfactory. Of course, you do not need to leave your chores at home or even your children; you can get to them anytime they need you because the work does not require you to be in front of the computer all day long.

Post Links

Another idea to generate money fast is by posting links and advertisements all over the Web. This is also good for people who cannot leave home but want to earn extra income. Here, you just need to look for a client and learn how and where to post links and ads. This job can also provide a satisfactory income if you are dedicated enough. It is something that you can do in order to kill time at home instead of just watching television. Aside from a computer with an internet connection, you do not need anything else to start. Payments are usually sent by check or through a bank deposit, whatever option you have chosen. Hence, you do not literally need to go out and leave the comforts of your home.

Of course, there are several other ideas out there that you may try, and it is up to you to decide if you can commit to it for the sake of earning extra without much effort.