John Chow’s ways of Avoiding Income Tax
Posted on February 19, 2008
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For those who are familiar about blogging, you will know that John Chow is a famous blog monetizer & 5-figure pro-bloggers who is very successful making money online.
In his blog, he claimed that he is an accountant and that may lend some weights to the above topics. His articles may stir up some controversy in areas of Income and Expenditure. According to him “Tax avoidance is not illegal, tax evasion is. The two are completely different from each other. Avoiding income tax is not the same as evading it” Anyways, what prompts him to write is in his own words “some would say they go against the spirit of the law. Let’s see. Which do you think is more corrupt: government buying votes with your money, or the efforts of every citizen to deny the government as much money as legally possible so as to force it back on the road to financial responsibility?”
This post will most likely benefit readers from US and Canada. For readers from Asia, it will be an interesting read. John Chow divided his posts into 3 series - click here for part 1, click here for part 2 and the final wrap up here.
This post also acts as a form of encouragement to all Forex Traders – Only when you are very profitable in your trading that Income Tax comes into play. For Forex Traders, being able to pay Income Tax is really an honour !!.
Cheers, Kampai, Proscht^^!!Is there really a Better Time to trade in the 24-hour Forex Market?
Posted on February 18, 2008
Filed Under Forex Trading | 1 Comment
I think most of my readers know by now that the Forex market is a global 24/7 market. All the players can gain into the market very conveniently without having to wait for the markets to open.
At any given time, there is always a major financial center open where banks, dealers, hedge funds, corporations, individual investors and speculators are trading currencies.
Traders can trade during anytime of the day or night, and do not have to wait for any markets to be opened before placing their trades. Unlike other markets such as stock or futures, traders would have to wait till the markets open and trading is usually confine to about less than 7 hours a day. It’s truly a global market where everyone could participate in it without having to worry about different time zone.
Being a market that operates 24/7, there must be readers who wonder when will be the best time to trade Forex or is there a better time than others.
This article will not only cover the topic of Forex operating hours, but also reveal the overall trader mindsets towards market hours on the whole.
To understand whether there is a best time to trade the Forex market or not, one’s need to understand what is the ‘actual’ operating hours of the 4 Forex market – Sybney, Tokyo, London & New York.
Below is the hours in GMT when all the markets open and close for operation.
Forex Market GMT
Sydney Open 21:00
Sydney Close 06:00
Tokyo Open 23:00
Tokyo Close 08:00
London Open 07:00
London Close 16:00
New York Open 12:00
New York Close 21:00
From the above graph, you will notice that there are three times when the Forex market overlaps. Meaning 2 markets are traded concurrently.
23:00 – 06:00 GMT – Sydney and Tokyo Overlap.
07:00 – 08:00 GMT – Tokyo and London Overlap.
16:00 – 21:00 GMT – London and New York Overlap.
In Forex Trading, when 2 markets are open concurrently, there are usually more volume and volatility.
Knowing the operating hours is only the beginning of the story. What that is more important is that every Forex trader has to understand his/her own trading style. You must ask yourself this question. Are you a Forex Intraday trader? Are you a Swing trader? Are you a Long term player? If you don’t even know what type of trader you are, it will not be easy for you to be successful in this business.
In the Forex market, unlike equity trading, there are very few so-called Long Term investors. Basically, the long term traders don’t bother much about market hours, as their open trading orders normally attempt to bypass all the short term volatility of the market.
Swing traders who hold their position for one or more weeks are also not too concerned about market hours. Their main concern will be for entry or existing of trades when more than one market is open to take advantage of more volatility.
Of all the trading style, Intraday traders are the one most concerned about market hours. Based on below-mentioned report, London session provides the most liquidity and volatility. London operating hours also overlaps two other markets, namely the Tokyo market and New York market.
According to a survey complied by Basel-based Bank for International Settlements (BIS), in April 2007, the average market turnover in the global Forex market reached an all-time record high of US$3.2 Trillion. The report mentioned that London had the biggest global share of US$1.3 Trillion in daily turnover, or 34.1%. The New York market came in second with a daily trading volume of US$664 billion, or 16.6% share. The third, fourth and fifth ranking went to Switzerland, Japan and Singapore accordingly. Singapore’s Forex market share of 5.8% or US$231 billion was ahead of Hong Kong and Sydney with about 4.4% global share.
For Intraday traders, they will most likely prefer to be around when more than one market is open. But that does not mean that currencies will not move when only one market is open.
It is also important to trade that currency pairs that are related to the particular markets open. For example, when Sydney and Tokyo markets are open, currency pair such as AUDJPY will have increase volatility compared to New York market opens. Likewise, when the London market is open all the currency pairs such as EURGBP and EURCHF will tend to move more than in Sydney session.
However, Forex market being a fully and truly connected global market, when a particular market makes big move, don’t even think that other markets will not move. There is a saying that big and successful Forex traders never sleep, as the market is always open for business.
Cheers, Kampai, Proscht^^!!A Video Inspired by the Technology Boom and Bust
Posted on February 15, 2008
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With the current stock market meltdown and NASDAQ hovering around bear territory – An interesting question comes to mind. Is another technology bubble on the way?? Or is it here already?
Hope everyone enjoy the video. By the way, the original song in this video is from Billy Joel – “We Didn’t Start the Fire”.
Cheers, Kampai, Proscht^^!!Lot Sizes and Leverage in Forex Trading
Posted on February 14, 2008
Filed Under Forex Education | 2 Comments
I think most of you will know by now that one of the major advantages in Forex Trading is the high degree of leverage provided by most brokerage companies. In the Forex market, depending on which brokerage firm a trader use, $1,000 could control $100,000 in currency. Such controlling leverage of 100 to 1 is quite typical of most trading account. Using $1,000 to control $100,000 is also known as “margin”.
In the last few years, lots of brokerage firm have offer e-mini account which may be funded with as little as few hundred dollars. Such account minimum lot size will be $100, which in return control $10,000 in currency value.
With such leverage or margin, a 1% relative change in a currency will equate to about 100% return on investment if the trade is in the trader’s favor. There have been many discussions on the topic of margin or leverage and some argue that high leverage is dangerous. For most investment vehicles, leverage is a double-edge sword. This is a point for the individual concerned to mange their own risk. In the Forex Trading arena, managing of one’s risk is in essential the most important element towards a trader trading success.
Cheers, Kampai, Proscht^^!!Major Currencies Interest Rate as of 11 February 2008
Posted on February 11, 2008
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Following the latest EUR and GBP interest rate released on 7th Feb 2008. Interest rate for Sterling Pound was cut from 5.50% to 5.25% after caving in to the rumors of an imminent economical recession. On the other hand, as expected, European Central Bank holds its interest rate steady at 4% for the eight consecutive months.
A day before, the Australian dollar interest rate was raised from 6.75% to 7.00%, an 11 year high. The Reserve Bank of Australia said that the tighter monetary policy was needed against escalating inflation.
After this latest round of interest rate adjustment, the interest rate of major currencies is as follows:
Japanese Yen (JPY) - 0.50%
Swiss Franc (CHF) - 2.75%
US Dollar (USD) - 3.00%
Euro Dollar (EUR) - 4.00%
Canadian Dollar (CAD) - 4.00%
Sterling Pound (GBP) - 5.25%
Australian Dollar (AUD) – 7.00%
New Zealand Dollar (NZD) - 8.25%
Forex Market Mechanism
Posted on February 9, 2008
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I believe all of you already know by now that the Forex market is the largest traded market in the world. So how are these currency pairs quoted on the Forex market? You will see two numbers on all Forex quotes. The first number is called the bid and the second is known as the offer (or the ASK) price. Take for instance EURUSD, you will see 1.4394/1.4395. The first quote of 1.4394 is the bid price, the price where traders are prepared to buy Euro against the USD Dollar. The second number 1.4395 is the offer or ask price and it is the price traders are prepared to sell the Euro against the US Dollar. You will notice that there is a difference between the bid and the offer price. This difference is known as the spread. Based on the previous EUR/USD quote, you know that 1 Euro is equal 1.4394 US dollar.
The way profit is measured of a currency is by “pips” or point. PIP is the acronym for price interest point. If the EUR/USD moves from 1.4394 to 1.4444 that is 50 pips. A pip or 0.001 is the last decimal place of a currency quotation with the exception of the Japanese Yen and Yen cross rates. A price movement for the USD/JPY from 111.10 to 111.60 will be 50 pips.
Cheers, Kampai, Proscht^^!!Gong Xi FA Chai 2008
Posted on February 6, 2008
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Wishing all my Chinese Readers that celebrate Lunar New Year on 7th Feb 2008.
May the year of Rat bring you Good Health & a Fountain of Wealth.
Cheers, Kampai, Proscht^^!!Technical Analysis in Forex Trading
Posted on February 2, 2008
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In Forex Trading, technical analysis is the study of market action, mainly through the use of charts and indicators to forecast the future movement of a currency.
There are a few principles that a technical analyst applies. The price is a compressive reflection of all market forces.
To a technical analyst, regardless of what the fundamentalist are saying, the price you see is the price you get. Price moves in trend – up (bullish), down (bearish) and flat (sideway) until the trend is broken and a reversal takes place. The time duration of the trend may be long intermediate or short. The historical trend will repeat itself.
The tools of the technical analyst are indicators, chart pattern and system. Moving average, Bollinger band and Stochastic Oscillator are some of the indicators. Trend line, support and resistance are some examples of chart pattern.
FED cut Interest Rate to 3.00% on 30th January 2008
Posted on January 31, 2008
Filed Under Forex News | 2 Comments
On Wednesday, as forecasted by many financial analysts, US Federal Reserve made its second deepest interest-rate cut by 50 basis points. Within a short span of less than 2 weeks, FED has lowered its overnight bank lending rate to 3.0%. Just 4 months ago, the rate was 5.25%.
The FED believed that the rate cut was necessary with the tightening of the credit market, battered housing market, volatile financial market and weakness in the job market. It also hinted that it will continue to lower interest rate if the economy continues to show more sign of weakness.
After the FED decision was made, the greenback fell against the Euro and the Yen. Wall Street analysts already are betting on more rate cuts in the next few months. If the US interest rate is going lower, it’ll definitely continue its slide against major currencies. With this interest rate cut, the US interest rate of 3.0% is only slightly than Swiss Franc 2.75 %( CHF) and the Japanese Yen 0.50%. As of now, the interest rate of major currencies is as follows:
Japanese Yen (JPY) - 0.50%
Swiss Franc (CHF) - 2.75%
US Dollar (USD) - 3.00%
Euro Dollar (EUR) - 4.00%
Canadian Dollar (CAD) - 4.00%
Sterling Pound (GBP) - 5.50%
Australian Dollar (AUD) - 6.75%
New Zealand Dollar (NZD) - 8.25%
As we wait for the FED next schedule meeting on March 18, let turbo charge our mental state with this great money visualization video……
Cheers, Kampai, Proscht^^!!Will there be any FED Rate Cut on 30th Jan 2008?
Posted on January 29, 2008
Filed Under Forex News | 7 Comments
With hours to go before the next FOMC meeting on 30th Jan, everyone in the global financial market is waiting for US Federal Reserve official Interest Rate announcement.
All the players are guessing and speculating whether FED will continue to cut its Interest Rate further or put it on hold.
With the latest cut of three-quarters of a percentage point last week, the key short-term interest rate now stands at 3.5%. Ultimately, whether the Interest Rate remains the same, lower by 25 basis points or 50 basis points will be Bernanke and gang decision. Many analysts are saying that the cut will only be a quarter of a percentage point but the futures market is pricing a greater half percentage cut. If the equity market does not get its 50 basis points cut, it will tank. If there is no cut, it will basically mean disaster. For the currency market, regardless of who is right or wrong, one thing for sure – market volatility.
As I’m not really a big fan of news trading, I will be staying sideline for now till the entire dust settle before resume trading. To all readers like myself, let’s relax and enjoy another hilarious Dance video…..
Cheers, Kampai, Proscht^^!! « go back — keep looking »-
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