MoneyMunch

Stay up-to-date with the latest news and updates from Moneymunch. Our category provides information on website updates, offers, maintenance announcements, and upcoming changes, ensuring that you are always informed and prepared. Trust Moneymunch to keep you informed and ahead of the curve.

Thinking About Money?

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Following on-from minimizing your exposure, we come to your relationship with money.

Whether we like it or not, money is highly prized in our soity. It’s important. And we attach a lot of feeling to it.

How then will you feel when you see hundreds of dollars(perhaps thousand, depending on your account size) go up in smoke in front of you?

The problem is, ”expenses” are part of the game. You have to lost some to win some more. There is no holy grail.

If you can’t change your relationship with money, then just don’t think about is. Focus instead on numbers.

Think “percentage of trading account”. Think “average risk-to-reward ratio”. Think “potential profit points versus maximum points risked”.

Concentrate on getting the numbers right and the money will take care of itself.

If You Don’t Spend Much, You Can’t Lose Much

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One of the biggest mistakes you can make as a trade is have too much money riding on a trade.

The more money you use the more emotional fuel you are pouring onto the fire. Eventually, you are likely to be burned… badly. And the post-traumatic stress may be irreparable.

Most beginning traders stake too much in the hope of a quick win. Experienced traders know better.

In day trading, where the traders can come thick and fast, a few big losers can eat you alive very quickly.

Good day traders who survive will risk only a tiny amount of their capital on any one trade.

If you’re “under capitalized” then consider using a trading system which offers a tight stop loss.

Alternatively, trade a shorter time-frame, like the 1-minute chart, where losses can be maximized.

Overconfidence is the other cause of excessive risk.

“Hey… heads has come up 10 times in a row… let’s put half the trading capital on tails (which is sure to come up next) and clean up.”

The problem with sure-thing trades is that:

A) The market hardly ever obliges;

B) Everyone else sees them as sure-things as well and jumps aboard. So when they go wrong, they go wrong big-time.

Risk a tiny amount on each trade. You’ll be more relaxed, and more able to execute the trade properly.

Plan Your Trades, Then Trade Your Plan

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plan

Your job as a trader is to follow a trading plan.

And who’s going to write this trading plan? You are.

Notice the world “write”. It needs to be written down, on your trading desk, in front of you.

Your trading system will give you the rules to follow. All you do is translate these into your plan.

A trading plan must have three parts: Setup, Entry and Exit.

(Obviously it’s beyond the scope of this document to provide details on specific trading system as there are literally hundreds of them! However we do feature some occasionally in our newsletter)

The point is that a trading plan conves every eventuality. You know what to look for in the market, when to get into a trade, and when to get out.

Keep it simple.

Then follow it. Religiously.

Economy News: JSW Steel Stock Info

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TOKYO: India’s third largest steelmaker JSW Steel Ltd. is in talks with to take a stake in the Japanese firm in a bid to strengthen their ties, a report said on Monday.

Sajjan Jindal, vice chairman and managing director of JSW, told the Nikkei business daily that his company aims to hold an interest of less than five per cent in the JFE Holdings Inc. unit within one to two years.

The two companies have already begun talks on the planned capital investment, Jindal said, adding that JFE Steel said it was ready to accept JSW’s offer.

Talks are also covering technological assistance in such fields as steel sheets used in electrical equipment, Jindal said, adding that JSW may boost its production capacity by forming a joint venture with JFE.

steel

JFE Steel, the nation’s second-largest steelmaker, declined to confirm the report, saying in a statement: “Nothing has been decided on this issue.”

The firms formed an alliance in November 2009, with JFE spending around 90 billion yen (1.1 million dollars) to buy a stake of just under 15 per cent of JSW and agreeing to provide technology for auto steel sheets and steel mills.

Through the capital investment, JFE plans to boost ties with JSW and expand businesses in , where demand for crude steel is expanding rapidly.

JSW currently has a crude steel output capacity of 7.8 million tons a year, but plans to more than quadruple this to 32 million tons by 2020 through the expansion of current facilities and by building new mills in the states of West Bengal and Jharkhand.

The Indian steelmaker will spend four billion dollars to fire up the West Bengal mill by 2014 with annual production capacity of five million tonnes.

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Plan a trade and trade a plan

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trade plan

Without doubt, no trader will last long if he doesn’t plan ever trade. But there is absolutely no point in making a plan for a trade if you are not disciplined enough to follow it.

A plan should cater for every eventuality. As Richard Dennis (Turtle fame) said, ”Don’t worry about the prices are going. Worry about what you are going to do when they get there.”

Thinks about what is being said here. Once you put your money down on a trade you cannot control the prices. So stop worrying about what could happen and concentrate on you trigger points and what you will do when these points are violates. By doing this your trading stops being emotional and now becomes very sysrematic and stress free.

There may never be a better time to invest in junior gold miners

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Never Good Time

With the price of gold as it is, penny share miners cannot believe their luck. Previous cycles have gone something like this: the gold price rises; opportunists take the chance to raise cash to go gold prospecting; they spend the cash on geological surveys, rock sampling and some exploratory drilling. Then, by the time they have found some gold, its price has subsided. Nobody is interested, and they cannot raise the money to get any further.

This time it is different. Not only is the gold price high, but many of the world’s biggest gold miners have given up on the struggle of finding new reserves. Instead they are relying on buying into the discoveries made by small adventurers.

Mine construction needs finance, but today the chances of attracting a rich big brother have never been better. In addition, the financial forecasts look rosy. Most gold projects launched two to four years ago assumed a gold price of $650-$850 per oz. At that level, all things being equal, they would be a commercial proposition and yield a decent profit.

But changes to the gold price make little difference to the cost of developing a mine. Every dollar on the gold price adds to the forecast profit. No wonder the gold sector is hot! And no wonder gold mining companies are beating a path to my door – literally!