Debtonator

Michael Jordan was one of the best basketball players in the world. So what do Michael Jordan and automated Forex trading have in common? It is known in sports terminology as a cold streak or slump. Michael Jordan has missed more than 9000 shots in his career. He and his team have lost almost 300 games, and he failed to make the final game winning shot more than 25 times in his career. Does this make him a poor basketball player because he has failed over and over again during his career?

An athlete will go through a losing streak, and every trader will go through a similar losing streak, a period of consecutive losses with no profitable trades. In trading, this term is defined as drawdown, and it can be defined as a percentage or a number. Regardless of whether you are trading manually or using any automated Forex trading systems, you will experience a period of consecutive losses. It does not matter if you are Michael Jordan of the basketball world or the Warren Buffett of the investment world, everyone will face losses during their career or investment period. Losses are inevitable, and as investors/traders, we cannot avoid them. Trading involves both risk and reward; hence, it is impossible to obtain any type of reward without involving some risk.

An automated Forex trading system cannot avoid a losing streak; however, it is with proper money management that it can minimize the losses during the cold streak. For example, if an automated Forex trading system has a maximum drawdown of $3,000 using a 0.1 standard trading lot, it is not advisable to start trading with this system using $5,000 as starting capital. If you are unlucky and a drawdown immediately starts right after you have turned on your automated Forex trading system, you will see your trading account going from $5,000, to $4,000, to $3,000, to $2,500 and then to $2,000. In this example, you just experienced a losing streak of $3,000, or a 60% drawdown.

Before using any particular trading systems, you want to know what is the largest loss you can face when an automated Forex trading system starts incurring losses due to changes in the volatile Forex market. You must understand that this is a temporary worsening condition of a trading system. This period is the trading risk, and it will pass. With this risky period, a good trading system will recover and provide you with ample rewards (a.k.a. profits). Depending on your level of risk tolerance, a 60% drawdown is quite extreme in one’s trading account. If you know that the drawdown is $3,000, you may want to start trading with $10,000 instead of $5,000. During a losing streak of $3,000, you will only experience a drawdown of 30%, which is a lot more tolerable.

Be a good investor scout and always prepare for the largest losing streak during your investment period. A drawdown period can be as long as three months; hence, don’t jump from one system to another system looking for the Holy Grail. If you have found a profitable trading system, stick with it during its three months drawdown period and you will be handsomely rewarded for your patience. Alternatively, follow a profitable automated Forex trading system and wait until it starts losing and then jump in. Just like Michael Jordan of basketball, after missing three baskets, he will likely score on the fourth basket, so don’t give up on him too early.

–
Winsor A.G.A. Hoang is a registered Professional Engineer and the founder of foreign currency trading software services. He has developed five managed Forex trading software for auto trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use the published trading results as free Forex trading signals.

Source: http://www.articletrader.com

Originally posted here: 
Understanding the Drawdown in Automated Forex Trading Systems

Michael Jordan was one of the best basketball players in the world. So what do Michael Jordan and automated Forex trading have in common? It is known in sports terminology as a cold streak or slump. Michael Jordan has missed more than 9000 shots in his career. He and his team have lost almost 300 games, and he failed to make the final game winning shot more than 25 times in his career. Does this make him a poor basketball player because he has failed over and over again during his career?

An athlete will go through a losing streak, and every trader will go through a similar losing streak, a period of consecutive losses with no profitable trades. In trading, this term is defined as drawdown, and it can be defined as a percentage or a number. Regardless of whether you are trading manually or using any automated Forex trading systems, you will experience a period of consecutive losses. It does not matter if you are Michael Jordan of the basketball world or the Warren Buffett of the investment world, everyone will face losses during their career or investment period. Losses are inevitable, and as investors/traders, we cannot avoid them. Trading involves both risk and reward; hence, it is impossible to obtain any type of reward without involving some risk.

An automated Forex trading system cannot avoid a losing streak; however, it is with proper money management that it can minimize the losses during the cold streak. For example, if an automated Forex trading system has a maximum drawdown of $3,000 using a 0.1 standard trading lot, it is not advisable to start trading with this system using $5,000 as starting capital. If you are unlucky and a drawdown immediately starts right after you have turned on your automated Forex trading system, you will see your trading account going from $5,000, to $4,000, to $3,000, to $2,500 and then to $2,000. In this example, you just experienced a losing streak of $3,000, or a 60% drawdown.

Before using any particular trading systems, you want to know what is the largest loss you can face when an automated Forex trading system starts incurring losses due to changes in the volatile Forex market. You must understand that this is a temporary worsening condition of a trading system. This period is the trading risk, and it will pass. With this risky period, a good trading system will recover and provide you with ample rewards (a.k.a. profits). Depending on your level of risk tolerance, a 60% drawdown is quite extreme in one’s trading account. If you know that the drawdown is $3,000, you may want to start trading with $10,000 instead of $5,000. During a losing streak of $3,000, you will only experience a drawdown of 30%, which is a lot more tolerable.

Be a good investor scout and always prepare for the largest losing streak during your investment period. A drawdown period can be as long as three months; hence, don’t jump from one system to another system looking for the Holy Grail. If you have found a profitable trading system, stick with it during its three months drawdown period and you will be handsomely rewarded for your patience. Alternatively, follow a profitable automated Forex trading system and wait until it starts losing and then jump in. Just like Michael Jordan of basketball, after missing three baskets, he will likely score on the fourth basket, so don’t give up on him too early.

–
Winsor A.G.A. Hoang is a registered Professional Engineer and the founder of foreign currency trading software services. He has developed five managed Forex trading software for auto trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use the published trading results as free Forex trading signals.

Source: http://www.articletrader.com

Continued here: 
Understanding the Drawdown in Automated Forex Trading Systems

Michael Jordan was one of the best basketball players in the world. So what do Michael Jordan and automated Forex trading have in common? It is known in sports terminology as a cold streak or slump. Michael Jordan has missed more than 9000 shots in his career. He and his team have lost almost 300 games, and he failed to make the final game winning shot more than 25 times in his career. Does this make him a poor basketball player because he has failed over and over again during his career?

An athlete will go through a losing streak, and every trader will go through a similar losing streak, a period of consecutive losses with no profitable trades. In trading, this term is defined as drawdown, and it can be defined as a percentage or a number. Regardless of whether you are trading manually or using any automated Forex trading systems, you will experience a period of consecutive losses. It does not matter if you are Michael Jordan of the basketball world or the Warren Buffett of the investment world, everyone will face losses during their career or investment period. Losses are inevitable, and as investors/traders, we cannot avoid them. Trading involves both risk and reward; hence, it is impossible to obtain any type of reward without involving some risk.

An automated Forex trading system cannot avoid a losing streak; however, it is with proper money management that it can minimize the losses during the cold streak. For example, if an automated Forex trading system has a maximum drawdown of $3,000 using a 0.1 standard trading lot, it is not advisable to start trading with this system using $5,000 as starting capital. If you are unlucky and a drawdown immediately starts right after you have turned on your automated Forex trading system, you will see your trading account going from $5,000, to $4,000, to $3,000, to $2,500 and then to $2,000. In this example, you just experienced a losing streak of $3,000, or a 60% drawdown.

Before using any particular trading systems, you want to know what is the largest loss you can face when an automated Forex trading system starts incurring losses due to changes in the volatile Forex market. You must understand that this is a temporary worsening condition of a trading system. This period is the trading risk, and it will pass. With this risky period, a good trading system will recover and provide you with ample rewards (a.k.a. profits). Depending on your level of risk tolerance, a 60% drawdown is quite extreme in one’s trading account. If you know that the drawdown is $3,000, you may want to start trading with $10,000 instead of $5,000. During a losing streak of $3,000, you will only experience a drawdown of 30%, which is a lot more tolerable.

Be a good investor scout and always prepare for the largest losing streak during your investment period. A drawdown period can be as long as three months; hence, don’t jump from one system to another system looking for the Holy Grail. If you have found a profitable trading system, stick with it during its three months drawdown period and you will be handsomely rewarded for your patience. Alternatively, follow a profitable automated Forex trading system and wait until it starts losing and then jump in. Just like Michael Jordan of basketball, after missing three baskets, he will likely score on the fourth basket, so don’t give up on him too early.

–
Winsor A.G.A. Hoang is a registered Professional Engineer and the founder of foreign currency trading software services. He has developed five managed Forex trading software for auto trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use the published trading results as free Forex trading signals.

Source: http://www.articletrader.com

Here is the original post:
Understanding the Drawdown in Automated Forex Trading Systems

There are many reasons why investors are unaware of or uncomfortable with short selling. One major reason is because it is counter intuitive. It makes more sense and is more intuitive for people to buy something, hold on to it, and then sell it at a higher price. You buy a stock at $2, hold onto it for 6 months, and then sell it for $3. Let’s take an example, you buy a house, you live in it, and then you sell it to buy another house. You can buy a house for investment, and you can rent it out to help pay for the mortgage. You don’t live there, but you still own the house. In all of these examples, you buy something, you own it, and then you sell it.

In short selling, you are selling something that you don’t own. It is counter intuitive because you can’t go around your neighborhood and sell a house that you don’t own. Hence, short selling does not make a lot of sense to people. Don’t worry, the next example will ease you slowly into the concept.

It is midnight, you are out of milk, and your kid is crying. You run over to your neighbor’s and ask to borrow a jug of milk. It happens that your neighbor just bought a jug of milk for $5, but he refuses to take your money. Instead, he tells you to buy him another jug of milk later, and you will be even. The next day, you go to the supermarket and the jug of milk is on sale for $3. You buy the jug of milk and return it to your neighbor and save yourself $2 in the process. Basically, you consumed the milk (an asset that isn’t own by you), and then you delivered an identical milk back to your neighbor at a later time. This is the concept of short selling. A short sale is the sale of a security that isn’t owned by the seller, but that is promised to be delivered.

Say you don’t think that Nortel Networks’ share price should be at $120 per share because the company is not profitable. You can borrow 10 shares from your stockbroker, and sell them for a gain of $1,200. When the stock price drops to $70, you buy back the 10 Nortel shares at $700, and return them to your broker. You borrowed 10 shares from your broker, and then you returned 10 shares, pocketing $500 in the process. If the price of the stock rises, though, you have to buy it back at a higher price, and you lose money.

In Forex trading, you can make money in both up and down markets if you are able to anticipate the up and down trends in the market. If you believe that the currency pair is going up, you buy at the low price and then sell at the high price. Alternatively, if you believe that the currency pair is going down, you sell at the high price and then buy at the low price to recover. In real time Forex trading, the rates of the currencies can change at any time. For instance, the quotes accessible for a specific currency pair can move upwards or fall down within a blink of an eye. This forces the investors to be extremely flexible and to go with the trend. Whereas, in the stock market a bull run can last as long as several years; hence, it is difficult to switch your thinking from a bull to a bear market.

Even though you have tools of short selling and long buying to in the foreign currency market, Forex trading is extremely difficult to master and more than 95% of traders lose their money. Understand that any method or software that boasts a 300% return on investment will also contain a minus 300% drawdown. Ask the right questions before purchasing or renting any currency trading software.

–
Registered Professional Engineer Winsor A.G.A. Hoang, founder of profitable forex trading software. He has developed five automated forex software for forex managed accounts trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use published trading results as free Forex trading signals.

Source: http://www.articletrader.com

See the original post: 
Understanding Short Selling in the Forex Market

There are many reasons why investors are unaware of or uncomfortable with short selling. One major reason is because it is counter intuitive. It makes more sense and is more intuitive for people to buy something, hold on to it, and then sell it at a higher price. You buy a stock at $2, hold onto it for 6 months, and then sell it for $3. Let’s take an example, you buy a house, you live in it, and then you sell it to buy another house. You can buy a house for investment, and you can rent it out to help pay for the mortgage. You don’t live there, but you still own the house. In all of these examples, you buy something, you own it, and then you sell it.

In short selling, you are selling something that you don’t own. It is counter intuitive because you can’t go around your neighborhood and sell a house that you don’t own. Hence, short selling does not make a lot of sense to people. Don’t worry, the next example will ease you slowly into the concept.

It is midnight, you are out of milk, and your kid is crying. You run over to your neighbor’s and ask to borrow a jug of milk. It happens that your neighbor just bought a jug of milk for $5, but he refuses to take your money. Instead, he tells you to buy him another jug of milk later, and you will be even. The next day, you go to the supermarket and the jug of milk is on sale for $3. You buy the jug of milk and return it to your neighbor and save yourself $2 in the process. Basically, you consumed the milk (an asset that isn’t own by you), and then you delivered an identical milk back to your neighbor at a later time. This is the concept of short selling. A short sale is the sale of a security that isn’t owned by the seller, but that is promised to be delivered.

Say you don’t think that Nortel Networks’ share price should be at $120 per share because the company is not profitable. You can borrow 10 shares from your stockbroker, and sell them for a gain of $1,200. When the stock price drops to $70, you buy back the 10 Nortel shares at $700, and return them to your broker. You borrowed 10 shares from your broker, and then you returned 10 shares, pocketing $500 in the process. If the price of the stock rises, though, you have to buy it back at a higher price, and you lose money.

In Forex trading, you can make money in both up and down markets if you are able to anticipate the up and down trends in the market. If you believe that the currency pair is going up, you buy at the low price and then sell at the high price. Alternatively, if you believe that the currency pair is going down, you sell at the high price and then buy at the low price to recover. In real time Forex trading, the rates of the currencies can change at any time. For instance, the quotes accessible for a specific currency pair can move upwards or fall down within a blink of an eye. This forces the investors to be extremely flexible and to go with the trend. Whereas, in the stock market a bull run can last as long as several years; hence, it is difficult to switch your thinking from a bull to a bear market.

Even though you have tools of short selling and long buying to in the foreign currency market, Forex trading is extremely difficult to master and more than 95% of traders lose their money. Understand that any method or software that boasts a 300% return on investment will also contain a minus 300% drawdown. Ask the right questions before purchasing or renting any currency trading software.

–
Registered Professional Engineer Winsor A.G.A. Hoang, founder of profitable forex trading software. He has developed five automated forex software for forex managed accounts trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use published trading results as free Forex trading signals.

Source: http://www.articletrader.com

See more here:
Understanding Short Selling in the Forex Market

There are many reasons why investors are unaware of or uncomfortable with short selling. One major reason is because it is counter intuitive. It makes more sense and is more intuitive for people to buy something, hold on to it, and then sell it at a higher price. You buy a stock at $2, hold onto it for 6 months, and then sell it for $3. Let’s take an example, you buy a house, you live in it, and then you sell it to buy another house. You can buy a house for investment, and you can rent it out to help pay for the mortgage. You don’t live there, but you still own the house. In all of these examples, you buy something, you own it, and then you sell it.

In short selling, you are selling something that you don’t own. It is counter intuitive because you can’t go around your neighborhood and sell a house that you don’t own. Hence, short selling does not make a lot of sense to people. Don’t worry, the next example will ease you slowly into the concept.

It is midnight, you are out of milk, and your kid is crying. You run over to your neighbor’s and ask to borrow a jug of milk. It happens that your neighbor just bought a jug of milk for $5, but he refuses to take your money. Instead, he tells you to buy him another jug of milk later, and you will be even. The next day, you go to the supermarket and the jug of milk is on sale for $3. You buy the jug of milk and return it to your neighbor and save yourself $2 in the process. Basically, you consumed the milk (an asset that isn’t own by you), and then you delivered an identical milk back to your neighbor at a later time. This is the concept of short selling. A short sale is the sale of a security that isn’t owned by the seller, but that is promised to be delivered.

Say you don’t think that Nortel Networks’ share price should be at $120 per share because the company is not profitable. You can borrow 10 shares from your stockbroker, and sell them for a gain of $1,200. When the stock price drops to $70, you buy back the 10 Nortel shares at $700, and return them to your broker. You borrowed 10 shares from your broker, and then you returned 10 shares, pocketing $500 in the process. If the price of the stock rises, though, you have to buy it back at a higher price, and you lose money.

In Forex trading, you can make money in both up and down markets if you are able to anticipate the up and down trends in the market. If you believe that the currency pair is going up, you buy at the low price and then sell at the high price. Alternatively, if you believe that the currency pair is going down, you sell at the high price and then buy at the low price to recover. In real time Forex trading, the rates of the currencies can change at any time. For instance, the quotes accessible for a specific currency pair can move upwards or fall down within a blink of an eye. This forces the investors to be extremely flexible and to go with the trend. Whereas, in the stock market a bull run can last as long as several years; hence, it is difficult to switch your thinking from a bull to a bear market.

Even though you have tools of short selling and long buying to in the foreign currency market, Forex trading is extremely difficult to master and more than 95% of traders lose their money. Understand that any method or software that boasts a 300% return on investment will also contain a minus 300% drawdown. Ask the right questions before purchasing or renting any currency trading software.

–
Registered Professional Engineer Winsor A.G.A. Hoang, founder of profitable forex trading software. He has developed five automated forex software for forex managed accounts trading. His automated software is internationally ranked with live trading results published every 30 minutes. Visitors can use published trading results as free Forex trading signals.

Source: http://www.articletrader.com

See the rest here:
Understanding Short Selling in the Forex Market

Your Name
Your Address
Your Phone #

Creditor’s Name
Department
Creditor’s Address
Date

Dear Creditor,
Re: Account Number__________ 

This letter is to confirm the debt settlement offer made between myself and your customer service representative (over the phone) on [date].

I appreciate that your company has agreed to work with me in settling my debt. The amount that your representative and I have agreed upon to settle the debt in full is $___________.

I would appreciate if you co-ordinate with the credit bureaus and remove any negative entry related to this account. It’ll actually help me regain a perfect credit rating.

I hope you’ll find the above terms acceptable. If it is so, please sign this letter of acceptance and return a copy to me. As soon as I receive this signed acknowledged agreement, I shall forward you the settlement amount (as stated above) through a money order.

Yours truly,

Your Signature
Your Name

And this is another perfect example of a debt settlement letter. As the late, great mayor of Chicago, Richard Daley (the boss, the don, the man in charge, the machine, the godfather) once said, “Alcohol and drug addiction are problems, and we should use outside agencies that know the business. They do business all over the country. Why don’t we contract them to do it? See, we should be in certain businesses.”

Know this for a fact - debt settlement can be yours today. So let’s get started, shall we? Why should we lose sleep over lost bridges? Debt settlement can clear up all financial frustration that comes with debt and credit card debt, and it can eliminate debt, too. Let me clear about this: debt settlement can wipe out debt, make it gone, make it outta here.

There’s simply no need and no place in society for debt. Who needs it? We surely don’t need it. Let’s make the most of debt settlement once and for all.

Your Name
Your Address
Your Phone #

Creditor’s Name
Department
Creditor’s Address
Date

Dear Creditor,
Re: Account Number__________ 

I appreciate the fact that your company is willing to negotiate with me for settlement of my debt. This letter is to make a counter offer in response to the amount your customer service representative wants me to pay for payment of debt in full. The amount that I wish to offer you for payment of my debt is $__________.

Unfortunately, I don’t have enough money to pay all my creditors. So, I can only settle debt with those creditors who’re willing to meet my terms. However, I’ve been able to negotiate successfully with a couple of creditors and I doubt if I’ll have enough funds remaining at the end of this month.

While I settle the debt, I’d request you to help me remove any negative listing (late payment, charge-off etc) on this account from my credit file. In fact, I’d be willing to offer you more money if you can report my account status as “Paid in full” to the credit bureaus.

If you find these terms agreeable, please sign the attached letter of agreement and return a copy to me. Upon receipt of this signed acknowledged agreement, I will send you a money order in the amount as stated above.

Yours truly,

Your Signature
Your Name

And this is a another sample debt settlement letter. This can help you to become debt free, to reduce your debt, to eliminate debt, to get rid of debt, to make debt a thing of the past, to get on with your life. On with the future. On to bigger and better things. Yes, we may have suffered some bumps and bruises along the way, war wounds if you will, but these debt experiences will have made us wiser, if not healthier and wealthier. Never look back. When your back is up against the wall - make lemonade.

Your Name
Your Address
Your Phone #

Creditor’s Name
Department
Creditor’s Address
Date

Dear Creditor,
Re: Account Number__________ 

I appreciate that your company is willing to work with me in settling my debt and paying it off. This letter is to make a counter offer in response to the settlement offer made by your customer service representative (over the phone) on [date].

The amount that I would propose to settle the debt in full is $_________. However, I would request you to remove any late payment entry or charge-offs on this account from my credit report.

I’d like to inform you that I have several debt accounts with other creditors as well. Unfortunately, I have limited amount of funds. So, I can pay only those creditors who are willing to meet my terms. I have already reached mutually agreeable settlements with a few creditors and I doubt whether I’ll have enough funds to pay everyone.

If your company is willing to accept my proposal, please sign the attached letter of agreement and return a copy of the same to me. As soon as I receive this signed acknowledged agreement, I shall send you the money order in the amount I’ve proposed.

Yours truly,

Your Signature
Your Name

And this my friends is a sample debt settlement letter.

There are many other variables to consider when writing a debt settlement letter. These include such things as: how much money is owed. How much money has been paid off. How long have the accounts in question been open. Were there special circumstances which lead to falling behind on your debt payments, things such as a job layoff, illness or death in the family, was there some emergency cosmetic surgery needed, things of this nature.

When all these ducks are in a row, then fire away and hope for the best. As they say - reach for the stars!

Your car can be lost for missing one payment

If you need to raise a few thousand dollars and you can’t get a regular bank loan, you might be tempted to apply for a car title loan. Your vehicle is put up as collateral, and then you repay the money over a few months. No credit checks are done, and you aren’t required to give banking information. Sounds good, right? Er, no… It might be easy to get an auto title loan, but you need to know it’s a very risky way to borrow.

Interest rates can be astronomical

In some states, interest on consumer financing products such as auto title loans is capped at 30-36 percent a year. However, lenders will compensate by charging steep fees if you are late in payment, and for issuing loan documents and verifying no outstanding loans or liens on the vehicle.

Elsewhere, APRs (annualized percentage rates) on title loans are often 300 percent or more. For example, in Illinois, rates are unregulated and can be as high as 700 percent a year. The interest rates can be manageable, just like with payday loans, if you’re able to pay the loan off within a month or two. However, because car title loans are often worth several thousand dollars, many borrowers find themselves extending their loans many times, and getting deeper and deeper into debt as interest charges pile up.

Be aware of scams

Car title loans are illegal in several states, but there you might be offered a “motor vehicle line of credit” or “sale and leaseback” deal instead. Though they’re similar to car title loans, as they are not permitted you don’t have legal recourse if the lender decides to seize your vehicle even if you have made payments when due.

It is illegal for a title loan issuer in the US to charge a fee for repossessing a car, but some will still demand payment. Some borrowers have had to pay for cleaning in addition to hourly rates for someone to pick up their cars, and mileage and towing fees.

“Pay on time or we’ll take your wheels”

When you pawn your jewelry to raise some cash, you know you have to go back and make regular payments or the pawn shop will confiscate your valuables and sell them. A car title lender can do the same thing with your vehicle. In other words, if you miss just one payment of maybe a couple of hundred dollars, you could lose a vehicle that’s worth many thousands, and you’ll have no way of getting around. That’s a pretty big risk to take.

Some lenders will sue you instead, which means you don’t have to give up the car – as long as you can pay the entire amount you owe them, plus court costs and other legal fees – and of course that can be a challenge when you’re strapped for cash. Before signing car title loan paperwork, check the fine print for details on penalties for late or non-payment. Can the loan company seize the car if your payment is just a day late? Will they hike your interest rate instead? Can they track you with GPS and disable the engine remotely if they aren’t paid yet?

Try to find the money somewhere else

The risk of losing your car to a title lender is so high that, for most people, it’s worth making the effort to borrow from a different source. You could try a payday loan instead, which does not require your car as collateral. You could be eligible for a credit union loan or government assistance. How about having a garage sale or selling some things on eBay?

It’s hard to live without a car, and you might not want to risk yours due to not being able to handle title loan payments.