The Duality of Life

I always believe in the rule of duality: everything in life is just a matter of TWO choices. You chose the first or the second option is really up to you. After all, there are really NO bad decisions. It is how you react to your decision that defines your success.


As much as I don't want to heed anyone's advice, I still wouldn't want to miss a thing. What they say could be true and perhaps an effective piece of advice.

If I caught myself difficult to decide, I always take into account the details and important considerations to resolve the issue. This is my way of assuring myself that I did my best of self-assessment before taking my decision. Needless to say, this is driven by fear of result.

As of this moment, my dilemma is about these two compelling reasons: live life to the fullest (present) OR save and invest (future).

To live life to the fullest is to experience the best things in life what God has given to us. Money may not have the capacity to buy happiness, but the things that could make us happy involves money.

In other words, happiness still has a cost. And we couldn't afford not to be happy even if the price to pay is high. While we are young, there is so much to enjoy that our elders could have done.

Most of the elderly people regret of not having the chance to experience their dreams of travel and adventure. There's still time but the problem is their health conditions. Aching joints, hypertension, and impaired vision are some of the inhibiting factors. Thus, it is reasonable to try things while still young.

To experience a variety of adventure is tempting: beach-bumming, concerts, amusement parks, out of the country tour, etc. I always thought I would never let myself get stuck in my own city for the rest of my life.

There is so much to explore: interesting people, places, events, experiences and adventure. If I keep on living where I had lived, I will always get what I always had.

On the flip side, I strongly believe that nothing can go wrong with saving and investing. To live in the present is compelling but the future must also be considered.

Retirement pensions may not be enough as the money loses its value due to increasing inflation year after year. If there's nothing left aside for the future, what would there be to look forward to? 

To clear things out, saving may not last until you retire. Saving ends until you invest. The main purpose of saving is to have the capacity to capture every opportunity that comes our way.

Remember, cash is king! It's like having few extra bullets left aside for hunting when there's no food left to eat. Although the money saved may be used for emergency purposes, that should never be the sole reason but for investment.

Saving is for losers, investing is for winners. If you are saving but don't have plans to invest, sooner it will lose its value. 

Advice could also be good or bad. There's an advice that we perceive as good but in second thought, it's not. I'm not promoting a deeper thought of advice before taking actions.

I'd rather suggest taking any decisions and assess the results. If you are happy with it, then clearly that is what's best for you. In contrast, if you're not happy with your decision, move on and learn fast. Next time you encounter the same situation, you know what to do.

Since we only live once, we don't have the chance to try both options. I do believe in both but one seems to be a bad advice. That advice is luring us for a straight road when in fact it is a crooked path.

Whatever it is, bottom line is we make ourselves happy and we are responsible of the consequences in the decision that we take. I do not recommend the best advice because that seems to be unfair to you.

We have different priorities, opinions and philosophies in life. There is no one to decide but you alone. Steer and take charge!

Experimenting with penny stocks

NASDAQ:JOEZ

A couple months ago I (specifically, when money from my 403(b) rolled over) I decided to invest in a penny stock. I wanted to see if it is actually possible to "make a quick buck" on penny stocks. So I bought 100 stocks of JOEZ. Joe's jeans is a high end jeans brand that is mainly sold in department stores, but also has its own stores. Within the high end jean collection, they are a popular purchase.

I read up on them, discovering the website seeking alpha in the process. They had just undergone a merger with Hudson Jeans, which seemed to me like a positive step (Hudson jeans are also very popular in the high-end jeans market). Well long story short, I haven't gained a penny yet.  My losses aren't huge either, but it is still disappointing!

After making this investment and seeing it do miserably I decided to do some more research on penny stocks (sometimes I like to do things backwards). 

After checking a couple websites, I have 3 main lessons learned:

1. Penny stocks are extra risky

2. Penny stocks often have a different status

3. Penny stocks can be deceiving

1. Penny stocks are risky

Wikihow has a great 12 step process for investing in penny stocks and the first step is about knowing the risks.  Penny stocks are risky because of a couple different reasons. First, there is generally a lack of information about the stock. Many penny stocks are not traded on the stock exchange meaning they don't have to file with the SEC and thus, do not need to follow the guidelines and restrictions of trading on the stock exchange. Lastly, penny stocks can be harder to sell; they are less liquid because there is the chance you won't find a buyer at your asking price for them.

2. Penny stocks often have a different status
As I mentioned before, some penny stocks are not traded on the stock exchange. They are most likely OCT (over the counter) stocks. These stocks do not adhere to the same regulations as regularly traded stocks.  Also, look at the history or the stock and signs of instability.  According to wikihow, "Look for delisting or signs of decay in more established penny stocks."

3.  Penny stocks can be deceiving
Since OTC stocks are not government regulated, you have to be your own regulator.  When researching a penny stock, be critical. Don't believe everything the press says. Go to the financials if they're available and do your own research.  Wikihow explains that one way fraudsters try to make money is by investing heavily in a stock and hyping it up, convincing novice investors the stock is a winner.  This deceit is one of many reasons you need to be careful.

For more information, especially regarding penny stock investing strategy, I recommend checking out the wikihow article. Another good resource is Investopedia's Lowdown on Penny Stocks.

Trading Binary Options in the United States

Image Courtesy: findunifi.com

Binary options have become a very popular trading vehicle and new binary options brokers are opening their doors in a steady stream. But most binary options brokers are not under supervised by any recognized regulatory organization and there is very little oversight involved, so caution is always advised when opening a binary options account.

Binary considerations to be‘exotic options’, but binaries are easily understand and are extremely simple to use. The most common binary option is a "high-low" option. A trader who chooses this type of trade selects an asset from a host of commodities, currencies, stocks or indices, decides on a specific time period, as short as 15 minutes, and predicts which direction the price of his asset will go-up or down. This is referred to as his strike price.

Binaries Basics

If the trader has called correctly, and the price went in the direction chosen within the right time frame, he will receive a return which was fixed before he placed his trade, usually between 70-80% of his investment regardless of how much the instrument moved. A trader who has wagered incorrectly on the market's direction suffers a loss on her/his investment.

Binary options are used as an alternative for speculating or hedging.  Advantages of binaries include an identified risk and reward ratio, no commissions, choice of strike prices and expiry dates, access to multiple asset classes in global markets and flexible investment amounts. Disadvantages include non-ownership of the asset, little or no regulatory oversight and a profit payout that is normally lower than the loss on losing trades.

Binaries in the United States

Binary options traded in the U.S. are structured differently than European binaries and without regulation, the U.S. Securities and Exchange Commission sees greater potential risks to the trader. Till 2008, most foreign binary options brokers were not legally allowed to solicit trading from U.S. residents unless that broker was registered with a U.S. regulatory body such as the SEC or Commodities Futures Trading Commission. In 2008, the SEC began to regulate certain exchanges such as the Chicago Board Options Exchange (CBOE) which began listing binary options for U.S. residents while the Nadex binary options exchange in the U.S. became subject to oversight by the CFTC.

There is still quite a bit of misunderstanding regarding the legality of binary options trading in the U.S.  Much of it is a stems from the increase in off-shore binary options platforms and the off-exchange or OTC contracts they offer. Off-shore platforms are still prohibited from soliciting binaries to retail customers in the United States. And only recently, in 2013the CFTC charged a Cyprus-based company with selling them illegally to U.S. investors.

Be ready for the Unpredicted: 4 Causes to Budget

The process of budgeting is important for everybody, and it concerns not only people, who have troubles with overspending. When you have budget, you see where your means are spent and it helps you in planning for future and for the emergencies you may face. It also benefits to the relations within your family. If you have budget, you are ready to face any unanticipated financial challenges which may occur.

You gain Control over Where Your Means Go

The main reason to start budgeting is to develop better spending patterns. Making a budget demands an in-debt look from your part at your finances and decisions, which are vital for your future. You will be able to spend less and accumulate more savings, thinking over each purchase you want to make twice. You will try to align all your needs with the budget you have, it will help you get rid of binge expenses and gain better control on where your means go.

Keeping within the budget does not mean you are unable to buy items which you’d like to or apply for some extra cash from time to time. It even allows you purchases of what you want, because you can reduce costs in other areas. If your budget is proper you can afford BMW instead of some cheaper car seeming more attractive from price point of view.

Budget Keeps You Focused on Long-Term Goals

One more important reason to create a budget is to benefit to your long-term goals, retirement in particular. Though all of us have different financial goals, budgeting helps you reach them. The Investigations show, that less than 15% of Americans are confident in their comfortable retirement. On the one hand it’s due to the social security concerns; on the other hand, it’s because of not proper budgeting for retirement time.

It Helps You Accumulate Means for Emergencies

Emergencies happen to all of us and this is one more reason to budget. It’s impossible to do without an unexpected car break down, losing your place of employment or facing some unforeseen medical expenses. Having a budget allows you make planning for emergencies and it relieves your stress when you face them.

It’s reasonable to save at least three months’ worth of income so that you can cope with financial difficulties. Budgeting gives you the opportunity to contribute to emergency fund, so that the necessary sum is there, when you need it.

It Benefits to Your Family Relationships

According to Utah State University Research, the chance for divorce is 30% higher in the families which disagree about finances at least several times in a month. Budgeting reduces misunderstandings in the family about finances and benefits to better relationships. The additional advantage lies in the fact that children have less stress if they understand the budget of their family.

So budgeting is good in many ways and allows you to plan for the emergencies, thus relieving your stress during them. Do you see some more reasons for budgeting? Tell us, please.

Price Consolidation in Forex Trading

Forex traders love to trade on price consolidation breakouts. So what is a price consolidation?

In terms of technical analysis, consolidation is the movement of an asset's price within a well-defined pattern of trading levels. Consolidation is generally regarded as a period of indecision, which comes to an end when the price of the asset breaks beyond the restrictive barriers. Periods of consolidation can be found in charts covering any time interval (i.e. hours, days, etc.), and these periods can last for minutes, days, months or even years. Lengthy periods of consolidation are often known as a base.

Once the price of the asset breaks through the identified areas of support or resistance, volatility quickly increases and so does the opportunity for short-term traders to generate a profit.

With Forex, price consolidation occurs when there is no obvious uptrend or downtrend in short-term time frames. With prices still fluctuating up and down, consolidation does not take place in ranging markets. In fact, consolidation is a period when prices are less volatile and are seemingly moving sideways. Market prices do not fluctuate and typically stay within a 10 to 15 pip range.

Breakout

When currency traders identify a price consolidation, they usually anticipate a breakout to follow. A breakout occurs when prices break out of consolidation, penetrating the support, downward breakout or resistance, upward breakout lines. Forex traders look to make profits from consolidation and breakout. Because you cannot know while currency trading whether the market will break out of consolidation downward or break out upward, you need to prepare for both. This is called a straddle trade. In this situation, you would want to place an order to buy 15 pips above the resistance level and at the same time, an order to sell 10 pips below support level.

Although currency trading breakouts from consolidation can lead to profits, you can also trade from within the consolidation. You would not use a straddle in this situation. Instead you would sell at the resistance level with a limit at the level of support and a stop loss at the last level of resistance. Or you could buy at the support level and with a limit and a stop loss at the last level of support.

Breakout Momentum

Many people trade when the price breaks out of the highest or lowest level of the consolidation. If prices break upwards, they buy. If prices break downwards, they sell. This decision is based on the supposition that the momentum of the break will be strong enough to push price further in the same direction.

This postulation has proven true in most instances. Trading at breakout can be very profitable. But it isn’t easy to decide when to exit a trade once its in-the-money. Any hesitation regarding when to sell can result in unanticipated losses as breakouts reverse directions very quickly.