August 2012

Trading Paper Waste of Time

August 31, 2012 - 11:26 — Van Beek

The usual opinion is that those who want to start trading the financial markets better start trading on paper first. I disagree, but only when certain conditions are met.

Paper trading is pretending that you are trading. You make decisions on what you want to trade, when you buy it and when you sell it. You keep a record in real time of the profits and losses you make with these fictive trades. There are lots of tools out there that make it easy for you to do this.

However, what good does it do you?

 

Wrong Emotions

 

Here are two good reasons why trading paper is a waste of time in my opinion.

 

Will Fluctuations in Foreign Exchange Affect a Company’s Share Price

August 14, 2012 - 06:23 — Van Beek

Even when you invest in shares that are listed on your domestic stock exchange, you may run a foreign exchange currency risk. Further below, you find the three choices that you have when you decide how to face this situation.

First let me describe the problem.

The share price of a company is a reflection of its financial results and growth potential. And this price is nominated in a certain currency. Now what happens when a company generates a major part of its costs or revenues in a foreign currency?


Two Foreign Exchange Impact Examples


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