Posts Tagged ‘Wealth Building’
Commemorating 9/11 With The Wall Street Mint Silver Bar
The Wall Street Mint Silver Bar were created in 2002, specifically to commemorate the events of 9/11. These gorgeous .999 fine silver bars feature the skyline of New York City, with the twin World Trade Center Towers, as it appeared before 9/11. Produced by the Wall Street Mint, these highly collectible, proof-like silver bars are no longer being made and are difficult to obtain. The Wall Street Mint Silver Bars are available in two sizes – 10 oz. and 100 oz.
Let’s look at the advantages to owning both sizes:
100-oz silver bars
1. Convenient way to invest a large amount of wealth in silver bullion form
2. Uniform shape makes it simple to stack and store them in a safe deposit box
3. 6.86 pound weight makes them easy to handle
4. Highly liquid as this particular size is an accepted trading unit
Coincidentally – 100 ounce silver bars came about in the 1970′s when inflation was soaring. Silver, a well-known inflation hedge, was highly sought after by investors as it was illegal to own gold bullion before December 31, 1974.
Small refiners started producing .999 fine silver products in order to meet the surging demand. Demand was so great by the mid-1970′s that large refiners like Engelhard and Johnson-Matthey began to produce the 100-oz silver bars.
10-oz silver bars
1. The favorite size of most investors
2. Smaller unit of value makes them easier to trade for other services and goods
3. Flat, uniform shape makes for easy, neat storage
4. You don’t need alot of money to invest
Because the Wall Street Mint Silver Bars are only available on the secondary market, they offer an investment opportunity with a great chance for future appreciation. Whether you invest in the 100 oz size or the 10 oz variety depends on your financial status and investment objectives.
Fundamental Trading Strategy Based on Interest Rate Differentials
As a forex trader, you should be aware of the role played by the interest rate changes in the general economic and investment climate. You should know that interest rates are an essential part of investment decisions and can drive currency markets as well as the stock and commodities markets in either direction. After the unemployment figures, Federal Open Market Committee (FOMC) rate decisions are the second largest currency market moving release.
The impact of the interest rate changes not only have short term consequences but also have long term impact on the currency markets. One Central Banks decision can affect more than a single currency pair in the interconnected forex markets.
In currency trading, an interest rate differential is the difference between the base currency interest rate and the counter currency interest rate. In the pair, EUR/USD, EUR is the base currency and USD is the counter currency. The interest rate differential for the EUR/USD pair will be the difference between the Euro interest rate and the US Dollar interest rate.
Understanding the relationship between the interest rate differentials and the currency pairs can be very profitable for you as a forex trader. In addition to the Central Banks overnight interest rate decisions, expected future overnight rates as well the expected timing for the interest rate changes can be crucial to the currency pair movements.
The reason why it is profitable is that international investors like hedge funds, big banks and institutional investors are yield seekers. They actively keep on shifting funds from the low yield assets to high yield assets.
Interest rate differentials are considered to be the leading indicators for currency prices. London Inter Bank Offer Rate and the 10 year government bond yields are usually used as leading indicators of currency movements.
Lets take an example, suppose the Australian 10-year government bond yield is 5.25%. The US 10-year government bond yield is 1.75%. The yield spread in this case would be 350 basis points in favor of the Australian Dollar.
Suppose the Australian government raised its interest rate by 25 basis points. The 10 year Australian government bond yield would also appreciate to 5.50%. Now, the new yield spread is 375 basis points in favor of AUD. The AUD will also be expected to appreciate against USD.
The general rule of thumb used by professional traders is that when a yield spread increases in favor of a certain currency that currency is expected to appreciate against the other currency in the pair. This is important information for you as a trader. Interest rate data is available on Bloomberg. Keep track of the currencies in the currency pairs that you trade with that data.
How To Trade Forex?
Learning forex trading should not be difficult. With decent understanding of money management rules and a good trading strategy, you should be ready for conquering the forex markets.
Always try to understand the big picture. You should start each trading session by looking at the daily charts and than zooming into 4hr, 1hr, 30min, 15 min etc charts. Forex trading is all about interpreting the past as well as about interpreting the future.
You need to know whether the market is ranging or trending before each trade. You should try to know any long term patterns that have developed by looking at the charts. By taking a general look at the different charts you will develop a feel of how the forex markets are behaving in the short as well as the long term.
You should try to figure out the general direction of the currency markets. You can use candlestick analysis and moving averages to identify long term patterns and reversals.
Bollinger bands applied to 4hr charts can be used to identify the daily trading range. Most of the price action is expected to be within the Bollinger bands. Any moves outside the bands can be viewed as short term abnormalities and ignored.
Do some scenario planning, once you have a general overview of the market. Make sure you know what news is scheduled to be released and what is the expected market reaction.
Understanding the big picture does not mean knowing the whole picture. You should only focus on your favorite pairs. It takes a longtime and effort to understand a currencys behavior, how it reacts to things like oil prices, interest rates etc. So concentrate only on a few pairs in forex trading.
You should always try to take notes and keep a daily trading journal. Start each entry in the trading journal by analyzing the general direction of the markets for that day. What you think how the markets are going to react to different news that is expected to be released that day? What should be your entry and exit for the trade. How many pips you are expecting to make?
After each trade, look at what went wrong and how to avoid it in future trading! In case of a good trade that made you pips, analyze how many pips you could have made more and how to tweak your trading strategy for better results in the future trades.
Keeping these general tips in mind while you are learning forex trading will help you a lot. Never ever trade without stop losses and practice on the demo account for at least three months before starting live trading.