How to Start a Small Business

Are you one of those who dream of owning your own business? You'll be your own boss, and the captain of your destiny—–maybe even a captain of industry. Is it hard? Without a doubt. Is it challenging? Absolutely. Do you have to be wealthy and well-educated with a lengthy resumé? Not at all! Can you do it? As the magic 8-ball says, "All signs point to yes!" So how do you do it, and make it work? Plan, plan, plan! There are some tried and true ways head down the path of creating your own business, and there is no time like the present to get started!

Steps

Setting Out the Basics

1. Have an idea. It might be a product you've always wanted to make, or a service you feel people need. It might even be something people don't know they need yet, because it hasn't been invented!
   • It can be helpful—–and fun—–to have people who are bright and creative join you for a casual brainstorming session. Start with a simple question like: "what shall we build?". The idea is not to create a business plan, just to generate some ideas. Many of the ideas will be duds, and there will be quite a few ordinary ones, but a few will emerge that have real potential.
2. Define your goals. Do you want financial independence, eventually selling your business to the highest bidder? Do you want something small and sustainable, that you love doing and want to derive a steady income from? These are the things that are good to know very early on.
3. Create a working name. You could even do this before you have an idea for the business, and if the name is good, you may find it helps you define your business idea. As your plan grows, and things begin to take shape, the perfect name may come to you, but don't let that hinder you in the early phases—–create a name that you can use while you plan, and don't mind changing later.
   • For a bit of fun, take a cue from the Beatles, who often use fun names for a song before it is finalized, like Yesterday, which had the working title of "Scrambled Eggs."
4. Define your team. Will you do this alone, or will you bring in one or two trusted friends to join you? This brings a lot of synergy to the table, as people bounce ideas off each other. Two people together can often create something that is greater than the sum of the two separate parts.
   • Think of some of the biggest success stories in recent times include John Lennon and Paul McCartney; Bill Gates and Paul Allen; Steve Jobs and Steve Wozniak; and Larry Page and Sergey Brin. In every case, the partnership brought out the best in both sides of the equation, and every one of them became billionaires. Is a partnership a guarantee of being a bazillionaire? No, but it doesn't hurt!
5. Choose wisely. When choosing the person or people you're going to build the business with, be careful. Even if someone is your best friend, it doesn't mean that you will partner well in a business operation. Things to consider when choosing your co-leaders and support cast include:
   • Does the other person complement your weaknesses? Or do both of you bring only one set of the same skills to the table? If the latter, be wary as you can have too many cooks doing the same thing while other things are left unattended.
   • Do you see eye to eye on the big picture? Arguments about the details are a given, and are important for getting things right. But not seeing eye to eye on the big picture, the real purpose of your business can cause a split that may be irreparable. Be sure your team cares about the and buys into the purpose as much as you do.
   • If interviewing people, do some reading on how to spot real talent beyond the certifications, degrees or lack thereof. People's innate talents can often be somewhat different from the conventional education streams they've pursued (or failed to) and it's important to look for "click" (you get along with them) and latent talents as much as paper credentials.

Writing a Business Plan

1. Create a business plan. A business plan helps to define what you think you need to launch your business, large or small. It summarizes the sense of your business in a single document. It also creates a map for investors, bankers, and other interested parties to use when determining how they can best help you and to help them decide whether or not your business is viable. There are seriously good books available on writing business plans that cover many chapters, and you should avail yourself of at least one of these as a guide (bookshops, libraries and online are good places to find these). In a nutshell, your business plan should consist of the following elements:
2. Come up with an executive summary. There will need to be several basic parts in your business plan. The first is the executive summary. Describe the overall business concept, how it will be monetized, how much funding you will need, where it stands currently, including its legal standing, people involved and a brief history, and anything else that makes your business look like a winning proposition.
3. Write your business description. Describe your business more specifically, and how it fits into the market in general. Who will you be selling to, and how will you deliver your product? If you are a corporation, LLC, or sole proprietor ship, state that, and why you chose to go that route. Describe your product, its big features, and why people will want it.
4. Come up with some marketing strategies. You must know your market if you are to be successful, so spend a great deal of time analyzing just who it is that will want your product, and how you plan on appealing to them to take cash out of their bank account and give it to you. What is the size of your market, will there be opportunities to expand the initial market, and what are your sales potentials? When you understand these variables, you want to sell them to the person reading your business plan.
5. Do a competitive analysis. As you develop the above sections, you will learn who your key competitors are. Find out who is doing something similar to what you are planning, and how have they been successful. Just as important is to find the failures, and what made their venture fall apart.
6. Write your development plan. How will you create your product? Is it a service that you are offering, or if it's more complex—software, a physical product like a toy or a toaster—whatever it is, how will it get built? Define the process, from sourcing raw materials to assembly to completion, packaging, warehousing, and shipping. Will you need additional people? Will there be unions involved? All of these things must be taken into account.
7. Plan your operations. Who will lead, and who will follow? Define your organization, from the receptionist up to the CEO, and what part each plays in both function and financials. Knowing your organizational structure will better help you plan your operating costs, and fine-tune how much capital you will need to function effectively. Keep in mind that your business will continue to evolve and that this will be a rough idea of who is needed to keep things functioning; as the business grows, you'll likely make changes to the hiring plans to fit what is happening at the time. Also, in a number of cases, the "staff" is you and whomever you can consult, such as your lawyer and accountant. This is fine, as long as you show that you're prepared to pay for external advice and help until your business is ready to take on staff.
8. Cover the financials. Succinctly, this describes how much you plan on spending, and how much you're making. Since this is the most dynamic part of your plan, and perhaps the most important for long-term stability, you should update this monthly for the first year, quarterly for the second year, and then annually after that.

Covering the Legal Side

1. Consider finding an attorney or other legal advisor. There will be many hurdles to leap as you go from working stiff to overworked and underpaid small business owner. Some of those hurdles will be composed of stacks of documents with rules and regulations, ranging from building covenants to city ordinances, county permits, state requirements, taxes, fees, contracts, shares, partnerships, and more. Having somebody you can call when the need arises will not only give you peace of mind, it will give you a much-needed resource who can help you plan for success.
   • Choose someone with whom you "click" and who shows that he or she understands your business. You will also want someone with experience in this area, as an inexperienced legal advisor could lead you to legal trouble or even fines and prison time.
2. Get an accountant. You’ll want someone who can deftly handle your financials, but even if you feel you can handle your own books, you’ll still need someone who understands the tax side of running a business. Taxes with businesses can get complicated, so you’ll need (at a minimum) a tax advisor. Again, no matter how much of your finances they’re handling, this should be someone trustworthy.
3. Form a business entity. You’ll need to decide what type of business entity you want to be, for tax purposes and hopefully to eventually attract investors. Most people are familiar with corperations, LLCs, etc., but for the vast majority of small business owners, you will need to form one of the following[1]:
   • A sole proprietorship, if you will be running (not including employees) this business on your own or with your spouse.
   • A general proprietorship, if you will be running this business with a partner.
   • A limited partnership, which is composed of a few general partners, who are liable for problems with the business, and a few limited partners, who are only liable for the amount in which they invest in the business. All share profits and losses.
   • A limited liability partnership (LLP), where no partner is liable for another’s negligence.

Managing Your Finances

1. Cover your startup costs. How are you going to finance your business initially? The bank, venture capitalists, angel investors, Small Business Administration (SBA), your own savings: these are all viable options. When you start a business, be realistic. You will probably not roll out of the gate making 100 percent of whatever you project, so you need to have enough ready reserve to fund things until you are really up and running. One of the surest roads to failure is under-capitalization.
   • Remember the four F's for investment: founders (people who share your idea), family, friends and fools
2. Have more than the minimum. You may determine it will take $50,000 to start your business, and that's fine. You get your $50,000, buy your desks and printers and raw materials, and then then the second month arrives, and you're still in production, and the rent is due, and your employees want to be paid, and all the bills hit at once. When this happens, your only likely recourse will be to pack it in. If you can, try to have the reserves for a year of no income.
3. Pinch those pennies. Plan to keep purchases of office equipment and overheads to a minimum when starting up. You do not need amazing office premises, the latest in office chairs and pricey artwork on the walls. A broom cupboard in the best address can be sufficient if you can artfully steer clients to the local coffee shop for meetings every time (meet them in the foyer). Many a business start-up has failed by purchasing the expensive gizmos instead of focusing on the business itself.
4. Crunch some numbers and plan ahead. Chart your way to financial success. What price do you intend to sell your product or service for? How much will it cost you to produce? Work out a rough estimate for net profit—factoring in fixed costs like rent, energy, employees, etc.
5. Check out your competitors. Know how much are they selling a similar product for. Can you add something to it (add value) to make yours different and hence make it a more enticing price? For example, perhaps your company would like to provide an additional year of guarantee at no cost, or a repair part free-of-charge or an additional gadget with the initial item.
   • Competition isn't just about the goods or services themselves. It is also about your social and environmental credibility. Consumers are increasingly conscious of the need to show that your business is concerned with labor conditions and isn't damaging the environment. Certification endorsements from reputable organizations, such as labels and stars, can reassure customers that your product or service is more aligned with their values than one lacking the certification.
6. Manage your running costs. Keep a close eye on your running costs and keep them in line with your projections. Whenever you see something spent wastefully—like electricity, phone plans, stationery, packaging—look around, and estimate how much really need, and minimize or remove the cost in every way possible. Think frugally when you start up, including hiring items instead of purchasing them and using pre-paid plans for services your business needs instead of locking yourself into long-term contracts.
7. Find a way to get paid. You will need to do something to get payment from your clients or customers. You can get something like a Square, which is great for small businesses since it requires the minimum amount of paperwork and the fees are minimal. However, if you feel uncomfortable with technology, you can go the old fashioned route and get a merchant account.
   • A merchant account is a contract under which an acquiring bank extends a line of credit to a merchant, who wishes to accept payment card transactions of a particular card association brand. Previously, without such a contract, one cannot accept payments by any of the major credit card brands. However, the Square has changed that, so don’t feel locked in or limited to this option. Do your research.
   • The Square is a card swiping device which connects with a smartphone or tablet and turns that device into a sort of cash register. You may have encountered this device in the businesses you frequent, as they are becoming common at coffee shops, restaurants, street food stands and other businesses (look for a postage-stamp sized plastic square plugged into a tablet or phone).

Marketing Your Business

1. Get a website. If you're selling online, get your ecommerce in gear and either build a website, or have one built for you. It's your storefront, so anything and everything you can do to make people want to visit, and want to stay, do it.
2. Hire professional designers. They may cost more initially, but a well presented and trustworthy site is essential. It needs to look professional and work with ease. If you are including money transactions, invest in security encryption and check that your money transfer companies are sound and reliable.
3. Discover your inner publicist. You might truly believe in your product or service but it won't fly unless everyone else believes in it too. If you're new to advertising and marketing or you dislike doing the sales pitch, now is the time to overcome such feelings and put on the publicist persona. You need to develop an excellent short pitch to convince people they need your product or service, one that reflects the value, purpose and potential of what your business is offering. Write down this pitch in many ways until you find one that you feel satisfied says it all and is something you can say readily. Then practice it like crazy!
   • Have interesting, eye-catching business cards printed.
4. Spend time developing an excellent social media presence. This can be done well before the business is ready, increasing anticipation. Use Facebook, Google+ and Twitter, and any other social media you participate in to build excitement and spread the word. You want to build a buzz so that people will begin following your progress. (Be sure to choose business accounts for your business and keep your personal accounts separate. The messages you send should be tailored differently, depending on which account you're sending from.)
5. Implement your marketing and distribution plans. With your product being built or services developed, and a reasonable expectation on when either is ready for selling, begin marketing. If you will be advertising in periodicals, they will need copy or images at least two months in advance of publication. If you will be selling in stores, get pre-orders sold, and shelf space allocated. If you will be selling online, get that e-commerce site ready to sell. If you're offering a service, advertise in appropriate trade and professional journals, newspapers and online.

Launching your Business

1. Secure space. Whether it's an office, or a warehouse, if you need more space than your garage or your spare bedroom, now's the time to get that.
   • If you don't generally need an office beyond your home, but may occasionally need meeting space, there are often places downtown that can address those needs. A quick Google search on "business meeting rentals [your city/state]" will deliver plenty of rental options in your area.
2. Build your product or develop your service. Once you have the business all planned, financed, and have your basic level of staffing, get going. Whether that's sitting down with the engineers and getting the software coded and tested, or getting materials sourced and shipped to your fabrication room (aka "garage"), or purchasing in bulk and marking up the price, the building process is the time during which you prepare for market. During this time, you may discover things such as:
   • Needing to tweak the ideas. Perhaps the product needs to be a different color, texture or size. Maybe your services need to be broader, narrower or more detailed. This is the time to attend to anything that crops up during your testing and development phases. You'll know innately when something needs tweaking to make it better or to make it less like a competitor's stale offerings.
   • Getting feedback. Friends and family make great resources for asking questions and getting feedback––don't hesitate to use them as your sounding board.
   • Needing to increase the size of your premises. This happens more often than expected. Once the stock starts piling up, you may find it ends up in your living room, bedroom and the garden shed. Think rental of storage premises if needed.
3. Launch your product or your service. When the product is all built, packaged, coded, online, and ready to sell, or when your services are fully worked out and ready to go, hold a special event to launch your business. Send out a press release, announce it to the world. Tweet it, Facebook it, let the word resound to all corners of your market—you have a new business!
   • Hold a party and invite people who can spread the word for you. It doesn't need to be pricey––purchase the food and drink from bulk discount stores and get family and friends to help with catering (you can give them a product or service in return).

Tips

• With the advent of the internet, online businesses are probably the easiest way to start and very much less expensive in terms of start-up cost than an offline counterpart.
• Always provide value and service to those who may be your customers, even if they are not currently. When they do need your product, you want them to think of you first.
• Don't be afraid to experiment with prices.
• Try to add more and more great ideas as you go!
• Keep learning, and be adaptable to change. Find buddies, mentors, local business-related organizations, Internet forums, and wikis to discuss the daily details of running a small business. It's much easier for everyone to perform their core businesses well and prosper when they don't waste time and energy "reinventing the wheel" on housekeeping.
• You can also consider trading on eBay or Overstock.
• Most direct selling companies have low start up capital compared to a traditional brick and mortar business. You can also break even rather quickly compared to the traditional business.
• A franchise is a great idea although the start-up capital is way too high for most people.

Warnings

• Beware of business propositions that seem to offer "something for nothing." They probably involve taking something from somebody—usually you. There are innumerable variations, some more polished than others. Examples include pyramid schemes[2] and advance-fee fraud.[3]
• Beware of people who ask for money before giving you business. Trade leads to prosperity through mutual gain,[4] so a business should be willing to pay you to work for it. (A franchise store or home-sales business may have legitimate start up costs, but they should reflect a reasonable cost of getting you started in the business so the managers would make money through your success, rather than just by getting you in.)

Related wikiHows

• How to Start a Finance Company
• How to Quickly Start a Legitimate Online Business
• How to Market a Home Party Business
• How to Come Up With a Business Idea
• How to Start a Crafts Business
• How to Name Your Business

Sources and Citations

1. ↑ http://bls.dor.wa.gov/ownershipstructures.aspx
2. ↑ http://en.wikipedia.org/wiki/Pyramid_scheme
3. ↑ http://en.wikipedia.org/wiki/Advance-fee_fraud
4. ↑ http://en.wikipedia.org/wiki/Gains_from_trade

• Starting and Managing a Business, U.S. Small Business Administration - http://www.sba.gov/category/navigation-structure/starting-managing-business
• Massachusetts Institute of Technology Sloan School of Management OpenCourseWare (free business-school courses) - http://ocw.mit.edu/courses/sloan-school-of-management/

Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Start a Small Business. All content on wikiHow can be shared under a Creative Commons license.

More Forex Global Trading Secrets-How to Be Disciplined in Forex Trading

What do you think the key for forex trading? It is not the perfect strategy, but perfect discipline. Discipline is a controlled behavior. So in forex trading you must have a controlled behavior which follows your strategy. Discipline will separates you between success and failure. Have you ever set your trading goals, set your stops and limits but eventually forget about that. You have your strategy but still didn't do the strategy and enter the market although it is not suits your strategy. And finally lost your money. How could that happened? It's because you lack discipline. Many beginner trader and some experienced trader too, often enter the market because they are tempted to go in due to the fear of missing out a big move although it breaks their trading rules.

Steps

1. Be easy on yourself for your mistakes. The more you get upset with yourself for your mistakes the more it will influence your future trading.
2. Keep practicing on a demo account. Set a goal, if you haven't got 50% return you will not go for real trade.
3. After every losing trade close your forex platform. This will you get you some time to cool off.
4. Put a Post-it note at your screen to be disciplined, so you remember to be disciplined.
5. If you find yourself praying for the market, that is ominous. Close your forex platform immediately.
6. Have your spouse accompany for your trading. She/he can reminds you for your action.
7. Use a demo account and have your spouse to trade for you. When you want to enter the market, you need to talk to him/her. This will slow your action and make you thinks clearly.
8. Relax and visualize yourself of your mistakes. Imagine your mistakes. Imagine your loss because of greed. In your mind see you takes defensive position for your next trade. Imagine every details of next trade. Do this often to change your mind.
9. Focus on your trading. If you have something else to do like working, don't trade.

Tips

• The key is making money in any financial market, including forex, is buy low and sell high. Study the charts to see where the support is (a price level the currency pair never seems to go lower) and aim to buy at that level; likewise, see where the resistance is (a price level the currency pair never seems to go higher), and aim to sell at that level. More likely than not, you will make money by so doing.

Warnings

• Don't be too greedy. Aim for 20-100 pips at a time to take profit.
• Don't trade too many different currency pairs simultaneously. This will endanger your margin requirement.
• Don't risk any money you cannot afford to lose. Risk money is money that if lost will not change your lifestyle the slightest. Consider ALL money deposited into a forex account as lost.
• Don't risk too much on any single trade. Keep a comfortable margin.
• Don't use stop-loss. If you don't risk too much at each trade, and follow "buying low and selling high," the price will almost invariably come back, even if it goes against you -200 pips, -300 pips, or even -400 pips. Forex is volatile so if you use stop-loss, your stops will very likely be taken out and you will lose money.

Related wikiHows

• How to Trade Forex Online
• How to Pick a Quality Stock for Investment
• How to Invest in Stocks
• How to Invest in Outdoor Equipment Companies

Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Be Disciplined in Forex Trading. All content on wikiHow can be shared under a Creative Commons license.

How to Invest Small Amounts of Money Wisely

Investing isn't just for the wealthy. Almost anyone can devote at least a little money to investments, keep close tabs on it, and wind up with more money than he or she started with. If you have a few thousand dollars or even a couple hundred you don't need right away, here are some suggestions on how to make the most of it. Note: This article assumes that you're looking to grow your money over time and are willing to take some risk rather than just saving your money in no-risk, low-yield savings accounts and CDs. It is also assumed that you already have an emergency fund set aside that includes enough money to cover normal living expenses for eight months should your income end suddenly. It is further assumed that you have no high-interest debt, such as credit cards. You would be further ahead paying off such debt rather than investing your money (because there are virtually no investments that would pay you as much interest as you would typically spend in carrying high-interest loans and other debt).

Steps

1. Pay yourself first. Set aside as much of each paycheck as you can for investing. Do this even if you can devote only a few dollars at first. Even $5 per week will add up over time. Try to cut your costs of living. Don't deprive yourself of necessities, but try to cut out luxuries, anything you don't have to have. Some of the wealthiest people in the world lived frugally when they first became serious about accumulating wealth.
   • If your employer offers direct deposit, consider sending a portion of each paycheck directly to your savings or investment account. If you never see that money, you won't be tempted to spend it.
2. Discipline yourself to build up your emergency fund to six months' worth of living expenses. You should also pay off any high-interest debt you're carrying. This is especially important in the likely event that the interest rate you're paying on such debt exceeds the interest rate you could expect to earn with your investments. See how to decide whether to invest or pay off debt for more information.  
   • If the interest payment on your debt is higher than what you'd be making with an investment, it's probably not wise to invest at first. In this case, try to pay off all your debt before investing your surplus; that way investing will actually make you money instead of merely underwriting your monthly debt payment.
3. Before you invest, educate yourself. You need to understand what investment options you have, how to read financial statements, how to analyze stocks (for quality, valuations, financial strength, growth potential, etc), as well as how to avoid investment scams and pitfalls, and where to find information.
   • Warren Buffett, one of the most successful investors ever, had read every investment book he could lay his hands on (at least 100 books by his count) before he turned twenty.
4. Promise yourself that you'll keep your costs of investing (fees and commissions) to less than 2% of the amount being invested. Multiply the amount you have to invest by .02. If the trading cost is more than that, put your money in a savings account instead until you can find an investment opportunity with a lower cost ratio.[1]
5. Choose one of the investing options below.

If you have $50 to invest

1. Buy stock directly with Dividend Reinvestment Plans ("DRIPs") or Direct Stock Purchase Plans ("DSPs"). Most plans will require a $50 minimum investment. Look for no-transaction-fee plans, and research any companies that offer such plans. With these you don't have to deal with brokers (or pay their commissions) because you buy stock straight from the company.
   • Not all companies offer this option, but more than 1,000 do. [2] You'll have to search for the companies that offer direct purchase programs, but you can find a partial list at [1].
   • In most cases you can make a one-time purchase or set up an automatic periodic-purchase plan. The latter is a disciplined and cost-effective way to build up a stock portfolio.
   • There may be a nominal commission or a minimum purchase requirement.
   • The main difference between DRIPs and DSPs is that to participate in DRIPs you must already own at least one share of the company's stock. You then collect your dividends in the form of additional shares instead of cash.Cite error: Closing

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1. • Does it have a monthly minimum investment? If so, that might affect your willingness to begin investing with that company.
   • Does it involve a relatively high fee to sell shares later? That might be an issue if you should prove to be an active trader. In general, you should use DRIPs only to buy high-quality stocks you plan to hold for a long time, so the sales charges will not be so important. If you intend to trade often, you should open a discount stock brokerage account that features low trading fees.
2. Look for mutual funds with a low minimum-purchase requirement. Some mutual fund companies will allow investors to start investing with small deposits, but you'll have to agree to an automatic investment plan whereby you let them deduct a fixed amount from your bank account every month for the purpose of buying additional stock. Such investments can be as little as $25. You may also be asked to start off with a small one-time investment, sometimes as low as $25. As noted, this is an easy and relatively inexpensive way to build up a stock portfolio. [3] See How to Select a Mutual Fund.

If you have up to $500

1. Invest in an index fund which tracks the broad market. Through boom years and recessions, mutual index funds that track the S&P 500 index have returned about 10% a year. That is a decent return on your money, and there are many non-index funds that fail to make that much for their clients. [2] There are many other indexes you can choose to track that may produce even greater gains. Once you choose an index fund and make your first contribution, you can add as much money as you want as often as is convenient without any additional costs or commissions. You are also free to stop investing whenever you want. Dealing directly with a mutual fund company in this way, you don't have to pay any broker's commissions.
   • The minimum investment varies, but with an Individual Retirement Arrangement (IRA) (USA only) you can open an account with as little as $250. (See How to Open a Roth IRA Account.)
   • If you have $500, more options will be available to you, and you can be a little pickier. In any event, look for an index fund with a low expense ratio (under 1% is best).
2. Consider opening a discount brokerage account. A discount broker doesn't offer all of the services of a full-service broker, but you can still purchase shares of stocks. Some accounts require a minimum initial deposit.
   • Until you have enough money that you can consider investing a few thousand dollars in a single stock (which means you would have many thousands to spread over a number of stock picks, thus spreading your risks), don't try to profit from short-term price swings. Brokers' commissions will make this unlikely to work well for you. Instead, with a limited amount to invest, plan to hold your investments for a long time (a few years) and pick companies that represent "value." (Value investing involves picking stock in companies that are under-appreciated by the market and are expected to increase in value once the market better understands their worth.) fundamental This tactic will expose you to company-specific risk, so don't use it as your primary investment strategy -- focus on index and other mutual funds (plus bank deposits).
3. Consider investing in a CD (certificate of deposit). A CD is for people who don't mind committing their money for a specified period of time at a fixed rate of interest. With a CD, you loan money to a bank or other institution for a certain time period, at the end of which the bank pays you back with interest.
   • CDs can last anywhere from a month to five years.
   • Generally speaking, the more money you invest in a CD, the higher your interest rate will be. Smaller institutions sometimes pay higher interest rates than bigger ones.
   • Say you want to invest $3,000, and you know you won't need the money in the next year. You buy a one-year CD with a simple-interest rate of 5.5%. At the end of the year, the bank gives you back your $3,000 plus the interest, which works out to be $165.

If you have $5,000

1. Follow the steps in the previous section. If you're able to save at least $5000 a year, you should also open a retirement account. This could be an IRA, a 401-k, a 203-b, or a similar option.

Tips

• There's no such thing as investing too much money, as long as your other financial commitments are taken care of. To paraphrase one well known online investment adviser, the key to meeting your long-range financial objectives is to "save, save, save" and then invest your savings wisely.
• Keep track of your investments for tax purposes.

Warnings

• Realize that there's always a chance you will lose your money. If losing the money will somehow ruin your life, don't invest it.
• Keep in mind that this money is for investing and nothing else. Understand that your investment may not be readily accessible whenever you may want it. That's what your emergency fund is for.

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Forex Global Trading-How to trade forex online

Trading foreign exchange on the currency market, also called trading forex, can be a thrilling hobby and a great source of investment income. To put it into perspective, the securities market trades about $22.4 billion per day; the forex market trades about $5 trillion per day. You can make a lot of money without putting too much into your original investment, and predicting the direction of the market can be a real rush. You can trade forex online in multiple ways.

Steps

Learning Forex Trading Basics

1. Understand basic forex terminology.
   • The type of currency you are spending, or getting rid of, is the base currency. The currency that you are purchasing is called quote currency. In forex trading, you sell 1 type of currency to purchase another type.
   • The exchange rate tells you how much you have to spend in quote currency to purchase base currency. For example, if you want to purchase some U.S. dollars using British pounds, you may see an exchange rate that looks like this: GBP/USD=1.589. This rate means that you'll spend 1.589 dollars for 1 British pound.
   • A long position means that you want to buy the base currency and sell the quote currency. In our example above, you would want to sell U.S. dollars to purchase British pounds.
   • A short position means that you want to buy quote currency and sell base currency. In other words, you would spend sell British pounds and purchase U.S. dollars.
   • The bid price is the price at which your broker is willing to buy base currency in exchange for quote currency. The bid is the best price at which you are willing to sell your quote currency on the market.
   • The ask price, or the offer price, is the price at which your broker will sell base currency in exchange for quote currency. The ask price is the best available price at which you are willing to buy from the market.
   • A spread is the difference between the bid price and the ask price.[1]
2. Read a forex quote. You'll see two numbers on a forex quote: the bid price on the left and the ask price on the right.
3. Decide what currency you want to buy and sell.
   • Make predictions about the economy. If you believe that the U.S. economy will continue to weaken, which is bad for the U.S. dollar, then you probably want to sell dollars in exchange for a currency from a country where the economy is strong.
   • Look at a country's trading position. If a country has many goods that are in demand, then the country will likely export many goods to make money. This trading advantage will boost the country's economy, thus boosting the value of its currency.
   • Consider politics. If a country is having an election, then the country's currency will appreciate if the winner of the election has a fiscally responsible agenda. Also, if the government of a country loosens regulations for economic growth, the currency is likely to increase in value.
   • Read economic reports. Reports on a country's GDP, for instance, or reports about other economic factors like employment and inflation, will have an effect on the value of the country's currency.[2]
4. Learn how to calculate profits.
   • A pip measures the change in value between 2 currencies. Usually, 1 pip equals 0.0001 of a change in value. For example, if your EUR/USD trade moves from 1.546 to 1.547, your currency value has increased by 10 pip.
   • Multiply the number of pips that your account has changed by the exchange rate. This calculation will tell you how much your account has increased or decreased in value.[3]

Opening an Online Forex Brokerage Account

1. Research different brokerages. Take these factors into consideration when choosing your brokerage:
   • Look for someone who has been in the industry for 10 years or more. Experience indicates that the company knows what it's doing and knows how to take care of clients.
   • Check to see that the brokerage is regulated by a major oversight body. If your broker voluntarily submits to government oversight, then you can feel reassured about your broker's honesty and transparency. Some oversight bodies include:
     • United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
     • United Kingdom: Financial Services Authority (FSA)
     • Australia: Australian Securities and Investment Commission (ASIC)
     • Switzerland: Swiss Federal Banking Commission (SFBC)
     • Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
     • France: Autorité des Marchés Financiers (AMF)
   • See how many products the broker offers. If the broker also trades securities and commodities, for instance, then you know that the broker has a bigger client base and a wider business reach.
   • Read reviews but be careful. Sometimes, unscrupulous brokers will go into review sites and write reviews to boost their reputations. Reviews can give you a flavor for a broker, but you should always take them with a grain of salt.
   • Visit the broker's website. The website should look professional, and links should be active. If the website says something like "Coming Soon!" or otherwise looks unprofessional, then steer clear of that broker.
   • Check on transaction costs for each trade. You should also check to see how much your bank will charge to wire money into your forex account.
   • Focus on the essentials. You need good customer support, easy transactions and transparency. You should also gravitate toward brokers who have a good reputation.[4]
2. Request information about opening an account. You can open a personal account or you can choose a managed account. With a personal account, you can execute your own trades. With a managed account, your broker will execute trades for you.
3. Fill out the appropriate paperwork. You can ask for the paperwork by mail or download it, usually in the form of a PDF file. Make sure to check the costs of transferring cash from your bank account into your brokerage account. The fees can cut into your profits.
4. Activate your account. Usually, the broker will send you an email containing a link to activate your account. Click the link and follow the instructions to get started with trading.[5]

Starting Trading

1. Analyze the market. You can try several different methods:
   • Technical analysis: Technical analysis involves reviewing charts or historical data to predict how the currency will move based on past events. You can usually obtain charts from your broker or use a popular platform like Metatrader 4.
   • Fundamental analysis: This type of analysis involves looking at a country's economic fundamentals and using this information to influence your trading decisions.
   • Sentiment analysis: This kind of analysis is largely subjective. Essentially, you try to analyze the mood of the market to figure out if it's "bearish" or "bullish." While you can't always put your finger on market sentiment, you can often make a good guess that can influence your trades.[6]
2. Determine your margin. Depending on your broker's policies, you can invest a little bit of money but still make big trades.
   • For example, if you want to trade 100,000 units at a margin of 1 percent, your broker will require you to put $1,000 cash in an account as security.
   • Your gains and losses will either add to the account or deduct from its value. For this reason, a good general rule is to invest only 2 percent of your cash in a particular currency pair.
3. Place your order. You can place different kinds of orders:
   • Market orders: With a market order, you instruct your broker to execute your buy/sell at the current market rate.
   • Limit orders: These orders instruct your broker to execute a trade at a specific price. For instance, you can buy currency when it reaches a certain price or sell currency if it lowers to a particular price.
   • Stop orders: A stop order is a choice to buy currency above the current market price (in anticipation that its value will increase) or to sell currency below the current market price to cut your losses.[7]
4. Watch your profit and loss. Above all, don't get emotional. The forex market is volatile, and you will see a lot of ups and downs. What matters is to continue doing your research and sticking with your strategy. Eventually, you will see profits.

Video

In the forex market, the trading spread is the difference between a currency purchase price and its sale price. With this guide, you'll learn how spreads can affect your trading profit margin.

Tips

• Start trading forex with a demo account before you invest real capital. That way, you can get a feel for the process and decide if trading forex if for you. When you're consistently making good trades on demo, then you can go live with a real forex account.
• Limit your losses. Let's say that you invested $20 in EUR/USD, and today, your total losses are $5, you woudn't have lost money. It is important to use only about 2% of your funds per trade, combining the stop-loss order with those 2%. Having enough capital to cover the downside will allow you to keep your position open and see profits.
• Try to focus on using only about 2% of your total cash. For example, if you decide to invest $1000, try to use only $20 to invest in the currency pair. The prices in Forex are extremely volatile, and you want to make sure you have enough money to cover the down side.
• If your currency pair goes against you and you don't have enough money to cover the duration, you will automatically canceled out of your order. Make sure you don't make this mistake.
• Remember that losses aren't losses unless your position is closed. If your position is still open, your losses will only count if you choose to close the order and take the losses.

Warnings

• Ninety percent of day traders are unsuccessful. If you want to learn common pitfalls which will prevent you from making bad trades, consult a trusted money manager.
• Check to make sure that your broker has a physical address. If a broker doesn't offer an address, then you should look for someone else to avoid being scammed.

Things You'll Need

• Brokerage account
• Cash to invest.

Related wikiHows

• How to Create a Currency Converter With Microsoft Excel
• How to Buy Stocks
• How to Avoid Broker Scams in Forex Trading
• How to Choose the Best Forex Software
• How to Read Forex Candlestick Charts

Sources and Citations

1. ↑ http://www.babypips.com/school/how-you-make-money-in-forex.html
2. ↑ http://www.investopedia.com/articles/forex/11/economic-factors-affecting-forex.asp#axzz2BSn9fLXc
3. ↑ http://www.babypips.com/school/pips-and-pipettes.html
4. ↑ http://www.100forexbrokers.com/how-to-choose-forex-broker
5. ↑ http://www.babypips.com/school/opening-a-forex-trading-account.html
6. ↑ http://www.babypips.com/school/which-type-of-analysis-is-best.html
7. ↑ http://forex.tradingcharts.com/learn_forex/6._Mechanics_of_Forex_Trading.html

Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Trade Forex Online. All content on wikiHow can be shared under a Creative Commons license.

Trading Stocks and Options

When you think about the companies that should benefit from the rising price of, and demand for oil, giant multinationals are the first that come to mind. But in his compelling piece for Barron’s, “Climb Aboard the Oil Train,” Jack Hough contends that railroads which are hauling the overflow that pipelines can’t handle are also poised to reap the gains, with Canadian Pacific (CP), Union Pacific (UNP), Kansas City Southern (NSC) and CSX (CSX) among the most likely winners.

First, Hough point out that U.S. domestic oil production is currently approaching record volumes.  “Earlier this year, U.S. oil production topped seven million barrels per day for the first time since 1993,” Keough said. “Analysts expected it to hit 10 million by 2020. For comparison, Saudi Arabia, the world’s largest producer, puts out just over nine million barrels per day, albeit of purer crude.” Part of this increase is due to hydraulic fracturing (commonly called “fracking”) which literally can squeeze oil of shale.

Although transporting oil by rail is significantly more expensive than using pipelines, the glut of oil has made rail transportation economically viable , given that rail infrastructure is already in place “Pipelines take years to build and can run up against environmental squabbling. Train tracks are already laid, and no one complains about adding more cars and extra offloading facilities,” Keough states.

Keough, citing Credit Suisse analyst Allison Landry, cautions that not all railroads will benefit equally, with Canadian Pacific appearing to be a solid short-term bet on the trend. “Canadian Pacific is uniquely positioned in that it can originate oil shipments from both Bakken shale and Canada’s oil sands. The oil sands have three to four times the output potential of Bakken. And while rail’s share of Bakken oil is expected to peak in late 2014 as new pipelines come online, pipeline capacity for Canada won’t surge until 2015 at the earliest.”

Landry also likes the oil transportation prospects of Kansas Southern and Union Pacific, while BMO analyst Fadi Chamoun likes Union Pacific, along with CSX and Norfolk Southern.

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