Last Bank Standing - The Wall Street Mega-Crash

Dateline Washington, October 19th (get it?) 2010: the Peoples Bank & Trust of America has now established itself as the only bank of any kind in the USA, totally owned and managed by the US House of Representatives. A 2/3 majority must now approve all investment banking transactions; your district representative's staff reviews individual mortgage applications; and all 401(k), IRA, and remaining employer pension assets have been rolled into the Social Security Slush Fund.

Only federal and state elected officials are exempt from the 45% all purpose Income Tax. The estimated time to bring new companies public is 4.5 years; all individual account dividends and interest are paid directly into your IRS "grabber" account; CEO's salaries are limited to 50% of the amount paid to a first year congressman, and any government budget shortfalls are withdrawn from corporate earnings before any corporate obligations can be dealt with.

All employees receive the federal mandated minimum wage, except senior executives who are limited as mentioned above. Scary? This is a scenario that could play out if Congress (or the SEC) does not come to the rescue of the credit markets. You missed your opportunity to help stop it, but chances are a fix is on its way.

How many more businesses, jobs, and hopes will be killed by this irresponsible Congress? When will the average blogger realize that when a corporation fails, we all suffer? One would think that the informed and enlightened could take time out from their texting for a little research and education. Instead, they show their power by influencing public opinion numbers and the marshmallow politicians who worship them. As economist Irwin Kellner and I have pointed out, this is no bailout and we are not nearly approaching a recession.

Kellner's September 28th Market Watch article points out ten major differences between now and then: (1) In 1929, the DJIA plunged 40% in two months vs. around 30% in about a year. (2) In 1933, the jobless rate was 33% vs. 6% today. (3) The GDP shrank 25% then, but has increased 6% now. (4) Consumer prices actually fell 30% then but haven't ever since.

(5) Home prices dropped 30% then, but only 16% from the recent bubbly highs. (6) 40% of all mortgages were in default then vs. only 4% now. (7) 9,000 banks failed in the 1930s compared with just 25 or so (bigger and broader based ones) recently. (8) The Federal Reserve reduced the money supply, (9) raised interest rates, and (10) raised taxes on foreign imports.

Further, Kellner points out, we now have automatic stabilizers, deposit insurances, and market trading restrictions as protective elements. Today's Congress however, has never been good at connecting dots, has accomplished nothing under an unpopular president, and is ignoring its role as the primary creative force in today's problems. This transfusion is needed because: bad laws have obscured the values on financial institution balance sheets, and have created a clot in the credit arteries that keep the economy alive.

Educate yourselves on the Accounting Rule's that require institutions to book paying assets at pennies on the dollar. Find out why institutions are afraid to loan money to one another--- over night, at any rate of interest--- strangling the credit markets.

Doing nothing is killing jobs, killing companies, and deferring retirements for those who were counting on 401(k) and IRA dollars to provide them with income. Congress, of course has an old-fashioned pension plan, so it is unaffected by such financial realities.

Investigate the relaxation of lending standards that Congress orchestrated over the past few administrations, before blaming the companies that then extended credit to many speculators and other buyers who falsified application papers. Learn how the SEC was prohibited from regulating the CDOs and other multiple-leveraged credit market speculations. There are as many culprits outside the corporate executive suite as in it.

Congress is bursting with pride over bringing some of the Rich and Famous to their knees, and capping some of their obscene compensation arrangements at still shareholder pillaging levels. I've spoken often about how these salaries need to be controlled. But the multi-level-mortgage-marketing schemes that Congress encouraged must be unbundled somehow, and a buy out is the proper vehicle.

Congress has punished the entire world with its attack on Wall Street, and both parties are to blame. Representatives of the states listed below voted "no" to the credit transfusion, causing death and destruction that, in many instances, cannot be recouped. We have to replace them with better decision makers, representatives who can think in economic terms when they have to.

The number and letter code after the state designation indicates the number of representatives and their party: AL-1R, AK-1R, AZ-4D4R, CA-15D9R, CO-2D2R, CT-1D, FL-1D13R, GA-4D7R, HI-2D, ID-1R, IL-4D5R, IN-3D3R, IA-1D2R, KS-1D2R, KY-2D2R, LA-2D3R, ME-1D, MD-2D1R, MA-3D, MI-3D6R, MN-2D2R, MS-3D, MO-2D3R, MT-1R, NE-3R, NV-1D1R, NH-2D, NJ-3D4R, NM-1D1R, NY-3D1R, NC-3D5R, OH-3D7R, OK-3R, OR-3D, PA-3D7R, SC-1R, SD-1D, TN-1D4R, TX-8D14R, UT-1D1R, VT-1D, VA-1D5R, WA-1D3R, WV-1R, WI-1D2R (Names withheld, but available from the author.)

On Friday evening, candidates Obama and McCain gave their support to the Capital infusion, but neither bothered to explain why--- a huge audience was ready to soak up the information. Over the weekend, both attended meetings to support the plan and to generate support from their respective parties.

Is there enough time left to find a hero?

Online Trading, an Option for Transnational Trade

Global deal is exchange of capital, trade goods, and services across transnational frames or territories. In the most of nations, it acts a significant percentage of gross domestic product (GDP). While transnational switch has been represented throughout lots of history (see Silk Road, Amber Road) the economic, cultural, and policy-making importance has been along the rise in last centuries. Industrialization, manufacturers, advanced transportation, globalization, international corporations, and outsourcing are completely having a major affect on the global trade scheme.

Trading globally makes consumers and nations the chance to be exposed to trade goods and services that are not available in their personal nations. Almost each form of product can be seen on the transnational market: food, dress, spare parts, oil, jewellery, wine, stocks, currencies and water. Services are as well traded: tourism, banking, consulting and transportation. A product that is sold to the transnational market is an export, and a product that is bought from the transnational market is an import. Exports and Imports are calculated for in a country's ongoing account in the balance of payments.

According to the U.S. Department of Commerce, big companies gain up approximately 4 % of U.S. Exports which signifies that 96% of exporters are small companies. Why is transnational trade so crucial to scratch small businesses? In several cases, the products or services you may care to market are not accessible or created in your domicile area. For good example, consider about selling cashmere sweaters. You may need to turn an importer in order to compete with imported products sold by your competitors.

Online business can frequently start trading internationally with very little effort. The internet has transformed things. Your site can be your shop window in some number of nations. You don't require a physical front in each territory to deal there.

A Study by Georgios Papastamkos, MEP on Worldwide Trade on the cyberspace emphasised that the online circumstances for small and medium-size enterprises are especially good since they give more opportunities to get across conventional commercial schemes rather than they had even a . Enterprises are effective to prepare their internet sale points easily, rapidly and at small cost, thereby reaching a higher stage of competitiveness.

If your business is running in a niche, with a relatively smaller internal market, looking to another nations can help you widen your audience with surprisingly little effort. And if your trade goods or services appeal to a larger audience, moving into outside marketplaces gives you the chance to reach a wide number of potency recent clients. It could actually rise your receipts and profits.

Still, in a bigger market there will be more competitor from local companies. It can be heavy to equal up on price or fulfilment when sending internationally, so you might let to modify your proposition to have an touch.

It's not only for producer but for consumers are also receiving profits by online trading,. Since they enjoy a very large option between commodities and services, competitive pricing, lower living costs and a improve excellent of life, they as well don't require to go out to surf all products and services even from wholesale suppliers. They are now better able to compare merchandises and services since they gain access more data on online trading.

Forex Options Tips - Tips to Increase Profits and Decrease Risk!

If you have never considered sing Forex Options then you should. They can simply overcome the major problem most Forex traders face - getting stopped out by short term volatility...

A Forex Option gives you unlimited profit potential and your risk is simply the price you paid for the option. This means, prices can go anywhere in the short term but so long as the option trades above the price you bought it at, in rising market or below in a falling market you make money.

How many times have you been stopped out by short term volatility, only see the price go right back the way you thought they would, make thousands of dollars and your not in the trade?

It happens to most traders!

Picking the direction of the long term trend is easy; balancing the risk reward in the short term is the hard part. You want to be in the trend - but you don't want to have to worry about short term risk. Staying power is the key advantage Forex options give you.

Options are a great tool to limit short term risk - but you need to use them correctly and here are two simple tips.

1. Always Buy at or in the Money Options.

Never buy way out of the money options, as these are long shot bets.

Sure the profit potential is bigger, if the strike price is hit but the key word here is "if"; out of the money options, are the equivalent of outsider bets and the outsider doesn't normally win!

2. Get Time on your Side

The closer the option is to expiry, the more time decay plays a role in option value. Never buy options with less than 3 months to expiry, so you have plenty of time on your side.

Options the Ultimate Risk Control Tool!

Forex options are a powerful tool any Forex trader should look at to deal with volatility and gain staying power. The problem most of the time is not deciding where a currency will go long term but where to place your stop and options take care of this problem, by giving you staying power.

If you don't know much about options, then make them part of your essential Forex education and add a valuable tool, to your armoury for bigger Forex profits.

Forex Money Management - The Foundation For Huge Gains and Forex Trading Success

Most traders use solid Forex trading systems but they fail to poor money management and really poor money management is the reason most traders lose lets take a look at in more detail...

If you watch any good football team it will have a strong defence it keeps the team in the game, until the offence gets an opportunity. If a team falls to far behind it doesn't matter how good the attack is, the team will lose and it's the same in Forex trading you need to defend what you have and keep your losses small until you get good high odds opportunities.

In Forex trading lose 50% of your account and you have to make a 100% to get back to profit and that's hard!

In Forex trading picking trend direction is easy but getting in at the best risk to reward is hard. So what tips can I give you?

The first is to cut leverage sure most brokers give you 200:1 but 10:1 is really plenty for most traders. Leverage up to far and you will have to have your stop to tight and will get taken out by the market noise so cut back leverage.

Next don't put stops to close!

This isn't being rash but you need to have stops outside of random volatility, so you don't get clipped out. Even more important is never jack your stop up to far to lock in profit - leave it back and accept short term dips in equity, to make a longer term gain.

Most traders either use to much leverage or think by having stops close, they reduce their risk but they don't, all they do is increase the probability of being stopped out to 100%. Many traders calculate their risk reward as - their target minus their stop but this is just an opinion! It does not take into account the probability if the trade.

To Win You Need to Deal with Volatility

When I ask traders I teach, do they know anything about standard deviation of price?

They look at me with a blank look yet; this should be essential knowledge for any Forex trader's essential education - why?

Because it gives you the volatility of the market and allows you to place stops more effectively. If you don't know what it is, make it part of your essential Forex education and look up our other articles.

Here are some simple money management tips.

- Always assume the worst when you enter a trade and things can only get better, there is no sure fire winner!

- Never place stops inside random volatility

- Never leverage up to hilt, keep leverage low

- Never trail a stop to quickly give the market room to breathe

- Never trade in random time periods so no day trading or scalping!

- Be patient and wait for high odds trades

- Don't place mental stops, they affect discipline and you may let a loss run

- Risk reward is NOT Your target minus your stop! Don't fall into this common trap

- If in doubt get out - any doubts liquidate

In forex trading your only trading the odds, you need to preserve your equity above all else fall too far behind and you will never recover. Forex money management is the key to this and always keep in mind the old gamblers saying:

To bet and win you need to be at the table but you can't bet if you lose your chips!

Obvious really - but very true. The foundation of your success is sound Forex money management SO pay attention and make it part of your essential Forex education or lose.

Forex Trading - A Simple Tip to Increase Your Profits and Reduce Your Effort Instantly!

I have been a Forex broker, taught Forex and been in contact with several thousand traders. The enclosed tip is simple one the vast majority of traders I have come into contact with don't understand - but if they did, the tip would increase their profits dramatically.

The tip is based on the 80 - 20 rule which is used in a wide variety of areas of life for example, in business it says 80% of your profits will normally come from just 20% of your clients. In Forex terms it means - 80% of your overall profits will come from just 20% of your trades.

The reality is that most Forex traders take far too many trades, if they cut back on their trading frequency and only hit high odds trades their profits will increase dramatically.

They hold the following beliefs which are simply not true

- They can make money by scalping or day trading

These short term trades are low odds trades in fact - the odds are you will lose, as you are trading the market noise.

- They need to be in the market just in case they miss a move

If course this is rubbish, you can spot a move and enter when the time is right!

- The harder the work and the more trades they make the more money they will make

The work ethic doesn't apply in Forex; many people think with effort they can force money from the market and they lose.

Be Smart and Aim for 100% Annual Profits

I know traders that trade less than once a month yet still turn in triple digit annual profits! There not interested in working hard or trading all the time, their interested in making money and that means hitting the high odds trades and milking them for all their worth. These traders make a lot of money, not by working hard but working smart.

Less is More Hit the Big Trends

The high odds trades don't come around every day and you need to wait for them but when they do, they will give you high odds set ups, greater chances of success with less work and that is something all Forex traders want!

Forex Charts - Make Bigger Profits by Following These Key Points

Forex charts are a great, time efficient and proven way to make bigger profits but most traders don't use them correctly and here we will give you some key points to help you make bigger profits...

Let's look at some key points for more profitable technical analysis with forex charts.

If you look at any forex chart you will see big trends that can last for many months and trend following these can be very profitable and if you want to make money out of them you must understand this key fact:

Most big trends start and continue from breakouts to new highs and lows on the chart and you must go with these breaks - most traders don't. They want to wait for the pullback and of course it never comes and they are left behind. While it appears like you have missed the first part of the move, the odds of continuation are high so go with them.

Always be patient when using forex charts. You don't get rewarded for your efforts or how many times you trade but being right with your trading signal. I know traders who trade just a few times a month yet make triple digit gains - so wait for the right opportunities.

When you have a trend you want to hit always check price momentum is on your side and make sure that you use momentum indicators that show price acceleration in the direction you wish to trade. Two great ones, you can learn, in about 30 minutes are - the stochastic and RSI. These two combined will increase your odds of success by getting the odds more on your side.

Never believe anyone who tells you there is a mathematical formula for market movement - there isn't. If of course there was, we would all know the price in advance and there would be no market. So forget trying to predict and only trade the reality of price.

Its probabilities that you need to understand and like a successful poker player, you won't win every hand - but if you keep trading the odds, you will win long term. When using forex charts, the simpler your forex trading method the better, as simple systems tend to be very robust and have fewer elements to break, than complicated ones.

I have used a simple breakout method which uses trend lines, RSI and the stochastic and made money with it for over 20 years sure, it's simple but it works. Forex charts give you the reality of price before your eyes and you can spot areas of over valuation and under valuation. Humans create trends and they also (due to their emotions) push trends to far up or down in either direction.

You can of course ride trends - but you will also see big price spikes and history tells you they don't last long and taking trades contrary to the majority can be very profitable. Charting is an art not a science and you need to practice your art. The successful captain of a ship uses charts to navigate safely, but he also knows that use them wrongly and he will drown and it's a very similar situation in forex.

The Good News

You can learn forex charting in around 2 weeks and soon be piling up big profits in around 30 minutes a day spotting and hitting high odds trades and enjoying great profits. The good news is forex trading and using technical analysis is a learned skill and one you can master with a little practice.

TRADING RULES - The Basic Rules of Trading

MONEY	Never trade with money you cannot afford to lose
TREND	Always ride the trend and never try to decide a trend
SELECTION	Always select the stocks, for there are always bullish stocks in a bearish market and bearish stocks in a bullish market.
TIMING	Never initiate your trade at the opening bell, wait for a market to make initial high and lows
QUANTITY	Always try to trade with same amount for averaging not the same quantity , ex: if have trade 50000/- in one, trade 50000/- in another rather than trading 100 shares in each trades
LEARNING	Blaming market is trying to hide your mistakes from yourselves,making fool of one’s self, thereby losing an opportunity to learn, markets are never wrong, the blame lies with trader.
INTROSPECTION	Always introspect at the end of every trading day, next day will work wonders.
R/R RATIO	Never ever enter a trade where the risk to reward ratio is less than 1:4
NO OF TRADES	Always trade in 2 to 3 stocks at any given point of time, how lucrative the market be, be master of some than being jack of all, keep buffering profits, you’ll find stock markets a wonderful place to be in...
STOP LOSS	Stop loss is essence for trading, never trade without a stop loss
AVERAGING	Averaging has no place in day trading, either u get out of the trade with the stop loss getting triggered or get the target
SUCCESS	Always use trailing stop loss, when the trade initiated, starts bearing results, to get maximum profit.
GREED	Always be ready to take the profits home, if the initial trades have worked for you, be ready to go home , do not trade for the broker
CONFIENCE	If the markets are not making you confident do not trade, just for the sake of trading , wait for clear signals
RUMORS	Never trade on news or rumors, always follow the levels, remember, news does not make levels, it just triggers levels.
LEVELS	Never get panicked or exited by the happenings on the screen, stick to the levels and stop loss, else you’ll always end up loser
PSYCOLOGY	Never follow the mass [the people sitting besides u], for 95% of them do not understand market
DECISION	Be ready to book loss if the ship starts to sink, do no pray , just jump.
PATIENCE	Patience is the name of the game, always exercise patience and restrain during the course of trading, for if a couple of trades have worked against u, take a gap and try to get the trend.
SPECULATION	Check on the speculative tendency, every rise or fall has a logic behind it, just do not speculative, without logic.
FAILURES	Always treat failures [losses] if any, as an learning opportunity, for every failure opens the doors of success, failures should be used as a source of motivation rather than depression.

BY : http://www.jogibedi.webs.com

What makes a good Trading Strategy?

Ask most NEW traders, and they will tell you about some moving average or combination of indicators or a chart pattern that they use. This is, as the more experienced trader knows, an entry point and not a strategy.

Any trader who is more experienced will say a strategy should also include money management, risk control, perhaps stop losses and of course, an exit point. They might also say that you must let your profits run and cut your losses short. A well-read trader will also tell you that your strategy should fit with your trading personality.

BUT there is one other vital ingredient that many traders forget - and that is to fully understand the "personality" of what you trade. Some traders specialise in say, gold or Brent crude or currencies or they might specialise in a particular index such as the FTSE 100 or the Dow but many traders choose to trade shares. Indeed some traders dabble in a bit of everything. I think this is the area that causes many traders to fail or at least not reach their full potential.

In my view: You absolutely MUST specialise.

I am sure that on the surface most people would say that sounds sensible but here is why it is a MUST!

Superficially, many charts look the same. I bet if you had not seen the charts for some time and someone where to show you a chart of Brent Crude over 6 months and then a chart of Barclays PLC over the same 6 months you would be hard pushed to say which was which purely on the look of the chart.

However, I bet that if you found a trader who trades ONLY Barclays day in and day out and also found someone who trades ONLY Brent Crude day in and day out, both of them would easily identify which was which. WHY?

Because every share, index or commodity has it’s own "personality".

Some will be volatile intra-day, some will follow their sector or the main index (market followers), some will do their own thing, some will spike up and down regularly, some will stop at key moving averages and some will just plough through. Some will move by 5% on average before they retrace and some by 2%. Some will gap up or down regularly, some will not. You get the idea!

Therefore, no matter how good you are at analysing indicators, moving averages, trends and patterns, the same strategy WILL NOT work for everything. I would go so far as to say that a strategy that works well for Bovis Homes, for example, is likely NOT to work for BT Group - they have very different "personalities".

So let’s return to our question: What makes a good trading strategy? Let me answer with a series of ten questions that you need to find answers to, in order to build a REALLY GOOD strategy.

1. What do you want to trade (share, index, commodity, currency, etc)? If your answer is shares (plural) I would urge you to pick one typical share at this stage to really specialise. You can add more later.
2. What "personality" does that share, index etc have?
3. What entry system is the most reliable for that share?
4. What stop loss system is the most effective for that share?
5. What average risk will a typical trade carry?
6. What exit system works well for that share?
7. What is your trading personality (attitude to risk, losses, discipline, how much do you worry etc) and can you trade that strategy without overriding it?
8. What timescale do you want to trade? (Using intra-day or end of day data)
9. How much data do you keep on past trades to help identify strategy weaknesses?
10. How does all this fit with your trading objectives?

Once you have an answer to each question you need to do one final thing. Make sure all those things fit together and complement each other. For example, if the ideal stop loss position represents a big average risk and conflicts with your own attitude to risk, you need to start again. If you will override your exit point because greed makes you hang in for more, you need to think again. Perhaps you shouldn’t trade that stock in the first place - look for one with a different "personality" which will lead to a strategy you can trade comfortably.

It is a long and sometimes painful iterative journey. You might need to go round and round in ever decreasing circles over a long time. Testing and refining, testing and refining before you can truly have a reliable and repeatable strategy that REALLY WORKS for you.

THEN, you can look for other things to trade that have the same "personality" as your specialist stock, index, commodity or currency.

Forex trading basics

Forex Market Basics

The Foreign Exchange market (also referred to as the Forex, FX market, "Cash" Forex or Spot Forex market ) is the largest financial market in the world, with more than $1.5 trillion changing hands every day — 30 times larger than the combined volume of all U.S. equity markets. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

What to trade in Forex Market?

In the forex market, currency trading is always done in currency pairs, such as EUR/USD or GBP/USD. Accordingly, all trades result in the simultaneous buying of one currency and the selling of another. The base currency is the "basis" for the buy or the sell. It is useful to consider the currency pair as an instrument, which can be bought or sold.

Understanding Forex quote

* Base currency: The first currency in the pair.
* Counter Currency: The second currency in the pair. Also known as the terms currency.

The US dollar is the centerpiece of the Forex market and is normally considered the ’base’ currency for quotes. This includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/CAD 1.1302 means that one U.S. dollar is equal to 1.1302 Canadian dollar.

BID and ASK Prices

When trading forex you will often see a two-sided quote, consisting of a ’bid’ and ’ask’. The ’bid’ is the price at which you can sell the base currency (at the same time buying the counter currency). The ’ask’ is the price at which you can buy the base currency (at the same time selling the counter currency).

Commission-free, but with spreads

Most Forex brokers offer commission-free Forex trading. Spread - The difference between the bid and ask price of a currency. Normally 3-5 pips on the Majors.

Rollover - What happens to my open positions at the end of the trading day?

Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies. Most brokers will automatically roll over your open positions, allowing you to hold a position for an indefinite period of time.

Fibonacci Trading Techniques

Introduction to Fibonacci trading techniques.

First, a few words about Fibonacci himself…

Leonardo Pisano (nickname Fibonacci) was a mathematician, born in 1170, in Pisa (now Italy). His father was Guilielmo, of the Bonacci family. His father was a diplomat, as a result Fibonacci was educated in North Africa, where he learned "accounting" and "mathematics".

Fibonacci also contributed to the science of numbers, and introduced the "Fibonacci sequence"

The Fibonacci sequence is the sequence 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, introduced in his work "Liber abaci" in a problem involving the growth of a population of rabbits.

Aside from this sequence of number where every next number is the sum of the proceeding two, 0, 1 (0+1), 2 (1+1), 3 (2+1), 5 (3+2), 8 (5+3), 13 (8+5), etc.

There are the "Fibonacci ratios".. By comparing the relationship between each number, and each alternate number, and even each number to the one four places to the right, we arrive at some fairly consistent ratios.. The important ones are .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and for good measure we include 1.00 ..

It turns out that the ratios are mathematical principles prevalent in nature around us, and is also in man-made objects. There are many interesting, entertaining, and poetic observations about Fibonacci numbers and ratios in the universe (see the reference section below). Fibonacci numbers appear in ancient buildings, in plants, planets, molecules, the dimensions of human bodies, and of course snails… But of what use is all that to the lowly trader?

What really interests you, the application of Fibonacci techniques in the trading environment..

Traders usually study charts! Fibonacci ratios may be applied to the Price scale, and also to the time scale of charts. I study the price scale. My focus here will be on the price scale for now, perhaps in the future I’ll add some time-scale studies.

Prices never move in a straight line. Look at any chart, you will see many wiggles, as price advances and retraces.. Stocks, Futures, Forex, all instruments which are liquid, will often retrace in Fibonacci proportions, and advance in Fibonacci proportions. Not always, and not precisely to the penny. But very often, and reasonably close! This happens often enough that profitable trades can result. I will show you some examples below.

I used Fibonacci ratios with a few simple indicators to help determine probable price turning points, optimum entry, exit and stop-loss levels. My complete techniques are available in on-line video seminars, in-person seminars, and via my real-time on-line chat facility. For more details, see the this web page

The application of Fibonacci to trading can be very complex, and take much time and experience to perfect. Many traders enjoy making the process as difficult and as complex as they can tolerate.. I do the opposite, I try to simplify, try to bring clarity.

Fibonacci example - Microsoft Weekly chart.
This lesson demonstrates a very basic way to use Fibonacci levels. You just read about Fibonacci ratios. We will use just one of those ratios for now, the .382 Fibonacci ratio. In this chart MSFT made a high of (approximately) $59.97 in December of 1999. After that, it moved down to make a low of $30.19 in May of 2000.



The down move was $29.78 (59.97-30.19), quite a substantial amount.

Projecting from that low in May, and using a Fibonacci ratio, we can calculate 29.78*.382=$11.37 . So 38.2% of 29.78 is 11.37 . If MSFT were to rally 38.2% of the down-move it would reach $41.57 (11.37+30.20). I’m using rounded numbers in my calculations, the chart above calculates it to be $41.564, we don’t need that degree of accuracy!

Several weeks later, MSFT rallied and resisted right near that .382 Fibonacci level !!

So we were able to predict a future probable turning point (after the low of May 2000), using the Fibonacci ratio of .382!! If only it were always so easy.

The steps involved are:

1. Calculate the total value of a significant price-move (high to low, or vice-versa).
2. Calculate a Fibonacci retracement (in this case .382) of the prior move.
3. Look for price to confirm, by resisting (or support in an up-move) near that predicted retracement area.

Fibonacci example - Microsoft Daily chart.
This chart shows how a different Fibonacci level (61.8%) predicted resistance and a market turn.

Notice how the market behaved at the .382 level (30.80 area). Initially the market spiked through, then fell back to that level (late October). We cannot expect a chart to retrace at every Fib level. We can expect some support/resistance as buyers/sellers enter the market at these levels, but we can’t always predict whether the market will actually turn at any particular level. Fibonacci techniques are used to alert you to a possible trade, if that price level does cause support or resistance. These techniques are not used as a trigger for entry. Other indicators are used in conjunction with Fibonacci studies to provide higher-probability entries.



As mentioned before, there are several Fib levels, .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and 1.00 .. So there are several places to look for a market turn. They can be calculated in advance, but trading blindly at a fib level can be dangerous, because you never know for certain (in advance) whether the market will turn at any particular Fib level. I use other indicators to help overcome that problem, click here to learn how to determine which Fib ratio is likely to be strong enough to turn the market.

Important notes from this lesson:

1. There are several Fib levels.
2. It takes some skill to determine which Fib level is likely to cause the market to turn.
3. There are some techniques to help you determine where a market is more likely to turn.
4. Do not blindly anticipate a market turn at a Fib level.

More Fibonacci examples.

QQQ Weekly chart with a deep retracement to .618 and a weak attempt to rally after that. However, consider the daily chart and intraday traders. they would have enjoyed the rally from $75 to $100, after going long from a support level that could have been predicted in March!



QQQ daily chart. Multiple Fib levels timing the market perfectly in 3 consecutive waves up!



Intraday chart, QQQ 30-minute. Notice the two market Fib retracements (there are others in this chart too).. The rally from 29.26 stopped at 31.10, then it supported **twice** at 30.39, for two good scalps. The next highlighted Fib support is at a retracement of .618 from the move up 30.47 to 32.49 .. Both of these support levels were predictable before the market supported there.. Hint:--- See how the rally continued after the shallow retracement to 30.39 ... See how the rally after the deeper retracement to .618 near 31.25 was a weaker rally.. This is common, a deeper retracement often foretells a weaker rally... See the next lesson in the table of contents for more on these advanced Fibonacci trading principles.



Another intraday chart, S&P 5-minute.. The first Fib retracement is on a bearish move, an opportunity to short. The second is bullish, with a long entry near 999.25 .. Note that popular charting software will calculate Fibonacci to rediculous precision, we don’t need anything closer than one tick! Actually, you should allow some room don’t expect precision every time. Allow the trade some room to develop, or you will be stopped out too often.



More Advanced - Microsoft Daily chart.

By now you’re probably quite interested, perhaps applying all those Fibonacci ratios to many charts.. You should experiment with your own charts. As long as the instrument traded has a lot of liquidity (not a penny stock for example), you should start to see Fib support and resistance at work. You will start to notice that Fibonacci levels "work" sometimes and not others. Sometimes the trades are not profitable, or are less profitable than others. You need to develop the skills required to select better trades.
In this mini-lesson I want to show you how to evaluate price action based on which Fib levels it responds to, and how the market behaves immediately preceding the Fib support/resistance.

The chart below actually has many Fibonacci levels "performing well", providing support or resistance to the market. I want you to focus on the two that I have identified, for the purposes of this lesson.



The first up-move that I have identified topped out at $26.90, and then retraced 61.8% before supporting at that Fib level. There was a pause at the .382 level, but it was not sufficient to hold the market. Now look at the rally from the support level near .618, it rallied but did not exceed the prior high of 26.90 … As a general rule, a retracement to .618 or below indicates that the preceding up-move is losing steam. A shallow retracement which supports at .382 is more likely to rally beyond the prior high than one which has a deep retracement beyond .50 all the way to .618 ..

The impressive thrust from 22.55 up to 26.90 was negated by a quick move back to .618 at about 24.20, so a trader should not be too optimistic about a continuation of the initial up-thrust.

Similarly, the move up in June, from 23.50 to almost 26.50 would also not inspire much optimism for a huge rally above the high of 26.50 … In general a shallow support at .382 would indicate a probable rally beyond the prior high. However, if the up-move preceding the retracement was sluggish rather than thrusting, you also should temper your enthusiasm.

If the second rally which only retraced to .382 had the thrust of the first rally, it would be a more attractive trade!

These are not firm rules, instead they are used as a guide, to help you filter for better trades. Every Fib level is not equal, some are more attractive than others.

Important notes from this lesson:

1. Not all Fib levels are alike.
2. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.
3. Price action just before a Fib retracement can tell you something about the future.
4. Which Fib level causes the end of a retracement also can give a hint to future price action.
5. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.

Futures Spread Trading

How professional traders optimize profits

Futures spread trading is probably the most profitable, yet safest way to trade futures. Almost every professional trader uses spreads to optimize his profits. Trading spreads offers many advantages which make it the perfect trading instrument, especially for beginners and traders with small accounts (less than $10,000).

The following example of a Soybean-Spread shows the advantages of futures spread trading:



Example: Long May Soybeans (SK3) and Short November Soybeans (SX3)

Four Advantages of Futures Spread Trading

Advantage 1: Easy to trade

Do you see how nicely this spread starts trending in mid February? Whether you are a beginner or an experienced trader, whether you use chart formations or indicators, the existence of a trend is obvious. (If you are looking for a concept of how to identify a trend, we strongly recommend visiting http://www.tradingeducators.com/?source=Tradejuicetrading_philosophy.htm). Spreads tend to trend much more dramatically than outright futures contracts. They trend without the interference and noise caused by computerized trading, scalpers, and market movers.

Advantage 2: Low Margin requirements

Many spreads have reduced margin requirements, which means that you can afford to put on more positions. While the margin on an outright futures position in corn is $540, a spread trade in corn requires only $135 — 25% as much. That’s a great advantage for traders with a small account. With a $10,000 trading account risking 8% of your account, you can enter 6 corn spreads, instead of only 1-2 outright corn futures trade. How’s that for leverage?

Advantage 3: Higher return on margin

Each point in the spread carries the same value ($50) as each point in the outright futures ($50). That means that on a 3 point favorable move in corn futures or a 3 point favorable move in the spread, you would earn $150. However, the difference in return on margin is extraordinary:
Corn futures - $150/$540 = 27.8% return
Corn spread - $150/$135 = 111% return
And keep in mind that you can trade 6 times as many spread contracts as you can outright futures contracts. In our example you would achieve a 24 times higher return on you margin.

Advantage 4: Low time requirements

You don’t have to watch a spread all day long. You do not need real-time data. The most effective way to trade spreads is using end-of-day data. Therefore, spread trading is the best way to trade if you do not want to watch or cannot watch your computer all day long (i.e. because you have a daytime job). And you can save all the money you would have had to spend for real-time data systems (up to $600 per month).
So where is the catch?
If futures spread trading is so fantastic, why does it seems that hardly anybody trades spreads? Well, it is not true that hardly anybody trades spreads: the professional traders do, every day. But either by accident or design, the whole truth of spread trading has been hidden from the public over the years.
The purpose of this website is to inform you about futures spread trading. In the following we will answer the four frequently asked questions:

* What is a spread?
* Why trade spreads?
* What can you expect when trading spreads?

What Is a Spread?

A spread is defined as the sale of one or more futures contracts and the purchase of one or more offsetting futures contracts. You can turn that around to state that a spread is the purchase of one or more futures contracts and the sale of one or more offsetting futures contracts. A spread is also created when a trader owns (is long) the physical vehicle and offsets by selling (going short) futures. Furthermore, a spread is defined as the purchase and sale of one or more offsetting futures contracts normally recognized as a spread by the fact that the two sides of the spread are actually related in some way. This explicitly excludes those exotic spreads put forth by some vendors, which are nothing more than computer generated coincidences which are not in any way related. Such exotic spreads as Long Bond futures and Short Bean Oil futures may show up as reliable computer generated spreads, but bean oil and bonds are not really related. Such spreads fall into the same category as believing the annual performance of the U.S. stock market is somehow related to the outcome of the Super Bowl sporting event. In any case, for tactical reasons in carrying out a particular strategy, you want to end up with:

* simultaneously long futures of one kind in one month, and short futures of the same kind in another month. (Intramarket Calendar Spread)
* simultaneously long futures of one kind, and short futures of another kind. (Intermarket Spread)
* long futures at one exchange, and short a related futures at another exchange. (Inter-exchange Spread)
* long an underlying physical commodity, and short a futures contract. (Hedge)
* long an underlying equity position, and short a futures contract. (Hedge)
* long financial instruments, and short financial futures. (Hedge)
* long a single stock futures and short a sector index.

The primary ways in which this can be accomplished are:

* Via an Intramarket spread.
* Via an Intermarket spread.
* Via an Inter-exchange spread.
* By ownership of the underlying and offsetting with a futures contract.

Intramarket Spreads

Officially, Intramarket spreads are created only as calendar spreads. You are long and short futures in the same market, but in different months. An example of an Intramarket spread is that you are Long July Corn and simultaneously Short December Corn.

Intermarket Spreads

An Intermarket spread can be accomplished by going long futures in one market, and short futures of the same month in another market. For example: Short May Wheat and Long May Soybeans.
Intermarket spreads can become calendar spreads by using long and short futures in different markets and in different months.

Inter-Exchange Spreads

A less commonly known method of creating spreads is via the use of contracts in similar markets, but on different exchanges. These spreads can be calendar spreads using different months, or they can be spreads in which the same month is used. Although the markets are similar, because the contracts occur on different exchanges they are able to be spread. An example of an Inter-exchange calendar spread would be simultaneously Long July Chicago Board of Trade (CBOT) Wheat, and Short an equal amount of May Kansas City Board of Trade (KCBOT) Wheat. An example of using the same month might be Long December CBOT Wheat and Short December KCBOT Wheat.

Why Spreads?

The rationale behind spread trading is one of the best-kept secrets of the insiders of the futures markets. While spreading is commonly done by the market "insiders," much effort is made to conceal this technique and all of its benefits from "outsiders," you and me. After all, why would the insiders want to give away their edge? By keeping us from knowing about spreading, they retain a distinct advantage.
Spreading is one of the most conservative forms of trading. It is much safer than the trading of outright (naked) futures contracts. Let’s take a quick look at some of the benefits of using spreads:

* Intramarket, and some Intermarket, spreads require considerably less margin, typically around 25% - 75% of the margin needed for outright futures positions.
* Intramarket, and some Intermarket, spreads offer a far greater return on investment than is possible with outright futures positions. Why? Because you are posting less margin for the same amount of possible return.
* Spreads, in general, trend more often than do outright futures.
* Spreads often trend when outright futures are flat.
* Spreads can be filtered by virtue of seasonality, backwardation, and carrying charge differentials, in addition to any other filters you might be using in your trading.
* Spreads can be used to create partial futures positions. In fact, virtually anything that can be done with options on futures can be accomplished via spread trading.
* Spreads allow you to take less risk than is available with outright futures positions. The amount of risk between two Intramarket futures positions is usually less than the risk in an outright futures position. The risk between owning the underlying and holding a futures contract involves the least risk of all. Spreads make it possible to hedge any position you might have in the market. Whether you are hedging between physical ownership and futures, or between two futures positions, the risk is lower than that of outright futures. In that sense, every spread is a hedge.
* Spread order entry enables you to enter or exit a trade using an actual spread order, or by independently entering each side of the spread (legging in/out).
* Spreads are one of the few ways to obtain decent fills by legging in/out during the market Closing.
* Live data is not needed for spread trading, saving you $$ in exchange fees.
* You will not be the victim of stop running when using Intramarket spreads.

What Can You Expect?

Here is an example of what you can expect from Intramarket spread trading. We think you may be pleasantly surprised!!



This spread was entered not only on the basis of seasonality, but also by virtue of the formation known as a Ross hook (Rh). The spread moved from -69.0 to -7.5 = $3,075 per contract. The margin required to put on this spread was only $608, thus the return on margin is more than 500%.

Here is an example of an Intermarket spread. Look at the the following chart: Would you want to have been long live cattle from December until February?



But, what about a spread between Live Cattle and Feeder Cattle?



The spread moved from -10,200 to -7,200 = $3,000 per contract. The margin required to put on this spread was only $540. The return on margin is more than 550%.

Lastly, we show you another intermarket spread. This one was made between Euro and British Pound. Although you might have made money on a Euro trade, you would have suffered from serious whipsaw during the entire length of the trade.



What about a spread between the Euro and the British Pound?



You didn’t have to be in this spread for very long in order to take some fat profits: During February the spread moved from $32,500 to $36,187.50 = $3,687.50 per contract.

How do I start trading spreads?

We can barely scratch the surface of what is available in the almost lost art of spread trading. There are times when seasonal spreads, coupled with chart formations, make a lot of sense. Backwardation in any market often provides an excellent signal for entry into a spread.

Looking for Cup and Handle Chart Patterns before Buying a Stock

Cup and Handle

Favorable Chart Patterns to Look for before Buying a Stock

One of the biggest factors an investor should consider before buying a stock is what type of chart pattern the stock is forming. A company may have great fundamentals but if it has an unfavorable chart pattern then it may not be a good company to invest in. One of the basic chart patterns to look for before investing in a stock is called a "Cup and Handle" pattern. Typically a "Cup and Handle" looks similar to a coffee cup if you were holding the cup in your right hand.

Generally I look for stocks that take 3 Months or more to form a Cup and then develop a Handle for at least 2 Weeks. Some examples are shown below.

AMHC formed a Cup for 14 Months and then developed a Handle for 8 Weeks (point A). AMHC broke out of the Handle in December of 2001 and then preceded to rise from $8 to $37 a share over the next 12 months for a gain of over 400%.

EASI developed a 2 year Cup and then formed a 10 week Handle (point B) before breaking out in August of 2000. EASI then preceded to rise from $12 to $38 a share over the next 12 months for a gain of over 200%.





FRNT developed a 12 Month Cup and then formed an 8 Week Handle (point C) before breaking out in November of 2000. FRNT then preceded to rise from $12 to $26 a share for a gain of over 100% over the next 5 Months.





Finally TARO developed a Cup for 10 Months and then formed a 6 Week Handle (point D) before breaking out in October of 2001. TARO then rose from $17 to $50 a share for a gain of 190% over the next 6 Months.





By focusing on companies with good fundamentals that are breaking out of a favorable chart pattern such as a "Cup and Handle" will allow you to find winning stocks even in a Bear Market environment. The purpose of our site is to help focus investors on those stocks that have good fundamentals which are forming favorable chart patterns such as the "Cup and Handle".

What is Forex ?

The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world’s currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen.

Finance unit woes lower GE earns 36 pct

General Electric Co.'s first-quarter earnings fell 36 percent as profits tumbled at its troubled finance arm, but the results beat Wall Street forecasts in a glimmer of good news for the struggling company.

While GE Capital remains a major drag on the conglomerate's profits, GE's strategy of weathering the economic slowdown by relying on its big industrial businesses appears to be paying off, at least for now.

GE, which has a stake in almost every sector of the economy, from light bulbs and credit cards to windmills, on Friday reported net income of $2.74 billion, or 26 cents per share, after paying preferred dividends. That was down from $4.30 billion, or 43 cents per share, a year earlier.

Earnings from continuing operations, however, surpassed Wall Street expectations of 21 cents per share �� coming in at 26 cents. Shares of the Fairfield, Conn.-based company rose 12 cents to close at $12.39 Friday.

While most GE operations struggled, its divisions that make power plant turbines, sell products to the oil and gas industries, and build jet engines managed to turn a profit, helped by servicing of customer equipment rather than new purchases.

But those results couldn't quite compensate for drops in its entertainment, consumer and health care segments, as a deep recession continues to eat into appliance purchases, advertising and hospital budgets.

Jeffrey Immelt, GE's chief executive, said the conglomerate is doing its best to navigate through the recession while trying to limit the damage from factors like GE Capital's growing losses.

"We are operating in this environment the way investors would want us to," Immelt said.

GE believes it won't have to raise new capital to prop up GE Capital, a huge business that finances everything from credit cards to commercial real estate. That unit, which once comprised about half of GE's profits, has worried investors as credit and property markets seized up over the last year, fueling a steep slide in GE's share price.

GE endured some historic setbacks during the first quarter, most caused by GE Capital. In late February, GE slashed its dividend by 68 percent, a move expected to save $9 billion in cash but its first dividend cut since 1938. Two weeks later, GE lost its coveted top 'AAA' credit rating from Standard & Poor's.

The finance arm remains a major concern, even as GE scales back the unit's operations and limits the amount of earnings it expects to generate from the former profit driver. Analysts pointed out Friday that without a big boost from taxes, GE Capital would have posted a quarterly loss of $153 million. With the tax benefit, its earnings slid 58 percent to $1.12 billion.

Hit especially hard was its real estate business, which includes lending and holdings in areas like offices and apartment buildings. The unit posted a $173 million loss in the quarter, versus a $476 million profit a year earlier.

Profits dropped at GE Capital's heavy equipment lending business, and its unit that finances energy projects. The slide in overseas mortgage markets like the United Kingdom and rising defaults on credit cards also led to lower results in GE's consumer lending unit.

The company gave investors an exhaustive review of GE Capital's finances in March, attempting to rebuild confidence following a slide in GE's share price, which is down 24 percent since Jan. 1 and has fallen 62 percent in the past year.

GE warned at the time that its finance arm could just break even this year if the economy worsens.

Analyst Nick Heymann of Sterne Agee said GE Capital still faces major challenges, including a worsening commercial real estate market, more problems as credit card customers face stress from layoffs, and continued problems with mortgage holdings.

"The challenges lie ahead for the most part," he said.

Total quarterly revenue, including a 20-percent drop at GE Capital, fell 9 percent to $38.4 billion, with sales down or flat in every division except GE's energy business. A broad U.S. recession has hurt GE's industrial operations, whose overall sales slipped one percent to $24 billion.

Orders for big-ticket items fell 10 percent to $19 billion during the quarter.

GE said sales from power plant turbines, windmills and other energy work rose 7 percent to $8.24 billion. Sales in GE's aviation business, which makes jet engines, rose 12 percent. The gains came mostly from work refurbishing existing engines and energy equipment as customers spent money to fix rather than buy new products.

Immelt said GE's operations like wind power would likely benefit from stimulus spending in the United States and globally this year. A $3 billion project to build turbines for Iraqi power plants is also expected to show up in profits.

But most segments suffered. Sales slipped 9 percent at GE's healthcare division, with hospitals holding off purchases as endowments drop and uncertainty surrounds health care reimbursement. GE's entertainment division, which includes the NBC television network, posted a 2 percent drop in sales, due to softer advertising markets and weaker DVD sales.

Bank of America posts 1Q profit but stocks fall

Bank of America Corp. warned of worsening loan default problems Monday even as it posted a first-quarter profit of $2.81 billion. Investors concerned about the banking industry's health sent financial stocks and the overall market sharply lower.

Although Bank of America said higher revenue from the purchase of Merrill Lynch & Co. helped offset a surge in credit costs, it took a $13.4 billion provision for credit losses during the first three months of the year. The amount of its problem loans more than tripled to $25.7 billion and CEO Ken Lewis said he couldn't predict when the bank's credit morass would end.

The bank's stock fell $2.58, or 24.3 percent, to $8.02 as the overall stock market plunged. Last week Wall Street was happy with better-than-expected results from JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc., but investors have been rethinking that initial upbeat response. Banking companies generally benefited during the quarter from unusually strong bond trading, a trend not expected to continue, while recession-driven loan problems persist and are expected to worsen this year.

Also weighing on investors is uncertainty about the government's "stress tests," analyses of bank finances to determine if they'll need more bailout funds if the economy worsens.

Over the weekend there were statements from administration officials that banks may need more government capital," and "the markets are reacting," said Gary Townsend, chief executive officer of Hill-Townsend Capital LLC.

Stress test results are due in the coming weeks.

"The economy hasn't hit bottom, the credit cycle hasn't run its course," said banking industry consultant Bert Ely. "We have a few more quarters of touch and go on profitability because of all the credit losses that are being taken."

Charlotte, N.C.-based Bank of America earned $2.81 billion after paying preferred dividends, or 44 cents per share, compared with a profit of $1.02 billion, 23 cents per share, in the year ago period. Analysts surveyed by Thomson Reuters expected profit of 4 cents per share.

Bank of America, as other banks have done, attributed its profit to trading activities on markets including bonds.

"Like it or not, capital markets is now a core business for Bank of America, and that has more volatile returns than other businesses," said Celent banking analyst Bart Narter. "Bank of America is no longer exclusively a retail bank and there can be more fluctuations."

But troubled loans, also known as nonperforming assets, increased to $25.7 billion from $7.8 billion a year ago. The bank also lost $1.8 billion on credit card services, after posting a profit a year ago.

"Credit is bad and we believe credit is going to get worse before it will eventually stabilize and improve," Lewis said during a conference call with analysts. "Whether that turn is later this year or in the first half of 2010, I'm not going to hazard a guess."

Lewis has been under intense pressure this year over the Merrill purchase, which closed Jan. 1. Shareholders approved the deal before learning of big losses at the New York-based investment bank and reports surfaced that Merrill paid billions of dollars in bonuses to employees before the deal was completed, even as Bank of America was begging the government for aid to complete the acquisition.

With the company's acquisition last year of mortgage lender Countrywide Financial Corp. and its expansion into credit cards after buying MBNA Corp. in 2005, Bank of America is mired in two businesses that are suffering. Consumers are spending less and defaulting more often as they worry over declining home values and rising unemployment.

"Bank of America is more exposed than their competitors in these areas, and it hurts them on the consumer side of the business," Narter said.

Bank of America recorded a $13.4 billion provision for credit losses in the first quarter and set aside $6.4 billion as additional reserves to cover future losses.

The first-quarter results include revenue from the company's acquisitions of Merrill and Countrywide. Revenue more than doubled to $35.76 billion, mainly from the addition of Merrill. It was also helped by a $1.9 billion pre-tax gain from selling shares Bank of America owned in China Construction Bank. Bank of America continues to own about 17 percent of the common shares of the Chinese bank, it said. Analysts expected revenue of $27.13 billion.

Bank of America has received $45 billion in government funds as part of the Treasury Department's $700 billion financial rescue package. Lewis has made remarks of his intentions to repay the government as soon as possible.

Townsend said he isn't certain that Bank of America is able to come up with the money, unlike Goldman Sachs, which has already raised capital.

"Bank of America is not yet positioned to repay the TARP (Troubled Asset Relief Program) and move itself away from the rather uncomfortable embrace of the United States government," he said.

In the investor conference call, Lewis said his bank won't need more capital from the government, reiterating a theme he's touched on often in recent weeks. Asked about the government converting its preferred shares in the bank into common, Lewis replied, "We think we're fine but it's out of our hands ... This is in the hands of the regulators at the moment."

An analyst at Standard & Poor's equity research division, however, said Monday that "a capital raise can't be ruled out."

While Bank of America benefited from stronger-than-expected trading and refinancing revenue, "we don't think revenue is sustainable," wrote Stuart Plesser in a research note. Plesser maintained a "hold" rating on Bank of America's shares.

AP Exclusive: Fed tests harder on regional banks

The government is giving Wall Street banks a helping hand. But this time it's not a handout.

The federal bank "stress tests" rate the individual loans held by big regional banks as riskier than the complex troubled assets held by the industry titans, according to a Federal Reserve document obtained by The Associated Press.

That approach could threaten some major regional banks while making the national banks appear in better shape when the government releases the results of the tests next month.

Regulators are administering the tests to 19 large financial firms to determine which banks are healthy, which need more help and which might fail if the recession worsens.

Under one scenario, the tests assume banks will see "no further losses" on the complex securities, according to the document obtained by AP. By contrast, it estimates that individual loans will lose up to 20 percent of their value.

Regional banks are holding more individual loans and fewer of the securities Wall Street giants specialize in �� complex derivatives backed by huge pools of mortgage-backed loans and other debt.

Analysts say regulators are probably favoring the largest banks because if even one failed, it would pose a grave financial risk. Banks that deal in securities are more connected to other corners of the global financial system.

Regulators also face pressure to highlight the weaknesses of some banks. Otherwise, critics will dismiss the tests as a whitewash. That could undermine one aim of the tests �� restoring confidence in the banking system.

The approach spelled out in the Fed document "certainly penalizes those banks that are more involved in traditional banking, which frankly have been performing better in recent months," said Wayne Abernathy, a former Treasury Department official now with the American Bankers Association.

He said banks' loan portfolios have lost only about 5 percent of their value so far, while the values of complex securities are down 30 to 40 percent.

The securities are held mostly by banking titans like Citigroup, JP Morgan Chase, Bank of America and Goldman Sachs. Their value is based on the performance of vast pools of underlying loans.

As defaults on the underlying loans spiked last year, investors lost confidence in the value of the assets. Individual loans have lost less value because their prices are tied more closely to actual defaults.

A Treasury Department spokesman referred questions to the Fed. A spokesman for the Federal Reserve declined comment.

Scott Talbott, a banking industry lobbyist with Financial Services Roundtable, said it's hard to conclude that the method discriminates because there are vast differences among all the companies on the list, regardless of size.

Regulators are administering the tests to all financial institutions with assets of at least $100 billion. The 19 institutions on the list include an insurer, Wall Street brokerages and regional banks, such as Cincinnati-based Fifth Third Bancorp and Cleveland-based Keycorp.

A spokeswoman for Fifth Third Bancorp said the bank would not comment. Keycorp did not respond to requests for comment. The bank said Tuesday it lost $488 million in the first quarter, partly from a large increase in what it sets aside to cover loan losses.

Some other regional banks on the test list also reported disappointing quarterly earnings Tuesday, reflecting steeper losses as people fell behind on loan payments. U.S. Bancorp's profit fell 61 percent, Regions Financial's 92 percent.

The Fed document obtained by AP doesn't mention any bank by name. And no sources or regulators would discuss any bank's performance on the tests. But some analysts have said a poor showing on the test could hammer a bank's stock or the broader market.

"The market is now pricing in an expectation that these reports are going to be pretty good," said Lawrence Brown, an accounting professor at Georgia State University. "So I think the downside risk is bigger than the upside potential."

Douglas Elliott, a former investment banker at JPMorgan now at the Brookings Institution, said only test results that reveal "substantial capital needs" will have credibility.

Once the results are announced May 4, regulators are expected to put the firms into three groups: those that are healthy, those that need more money to stay healthy and those at risk of failure.

The approach in the Fed document could help keep the largest banks out of the weakest category. That would avert the risk that bad news about the biggest banks could set off a market panic.

But it won't help the banks lower on the list. They could face pressure from speculators using share prices, futures and options to set off a wave of selling. Investors "already are preparing their strategies," Abernathy said.

Treasury Secretary Timothy Geithner told a congressional panel overseeing the federal bailouts that "the vast majority" of banks have more capital than they need. He said regulators would decide when banks will be allowed to pay the government back.

In the stress tests, regulators are putting banks through two scenarios. One reflects forecasters' expectations about the recession. The other assumes a more severe recession than expected.

Both tests measure losses that banks could face over the next two years against the cash cushions they hold to protect against those losses.

For the test that uses current expectations for the recession, banks can value securities as they have in recent filings. But losses for loans are estimated to range between 5 and 12 percent for mortgages and as high as 17 percent for credit cards.

Under the test that assumes a more severe recession, loan losses are projected at 7 to 20 percent. Securities in that test would be marked down based on market disruptions during the second half of 2008.

Why so Many Traders Fail at Forex

The old battlefields of the middle ages are not gone, they have merely changed form. Hundreds of years ago normal men would set out to build their empires by conquering lands through the force of arms. Today, normal men like you and i set out to build our financial empires by conquering markets through the force of self. The blood soaked battlefields of yesterday have made way for the cash soaked commercial battlefields of today, with the large private armies of Family warlords making way for large pools of family capital.

In there, lies the reason as to why many forex traders fail. They go into battle risking too many soldiers (capital) and without the knowledge of tactics needed to win the fight.

Lets look at that again. 1. They risk too much capital, 2. They do not understand Forex markets.Many traders both successful and miserable have made these mistakes, the main reason for me writing this article is so you can learn this lesson here and do not have to make this mistake and lose money, or at the very least be cautious enough to minimize your losses.

No general will risk a majority of his men in a battle that he has no plan for and where he has no idea about his enemy. So my question to you is, why would you risk your capital in market conditions you know nothing about? Luckily two remedies exist for the forex general who finds himself in this situation.
1. Make it a rule to only risk 1% of your capital in any one trade. This is to minimize your losses.
2. Educate yourself so you can recognize your chance to strike but also recognize when it is necessary to withdraw.

Learn to read the conditions of the forex battlefield. Great generals of the past would spend years learning battlefield tactics, luckily we can achieve this in a couple of months.

So in summary only risk 1% of your capital in any trade, and educate yourself about how forex markets work.