Tips to save money during a recession!

The economy always has and always will have its ups and downs. It's easy to breeze through the good times, but how does one come out of the bad times unscathed?

Here are a few suggestions:

1. Talk it over. Sit down with your family members and discuss your finances. Remember to take a healthy approach to finances. This is also a good time to set an example to your children, and show them how a family can pull together during tough times and everyone can chip in:

2. Teach your kids about the importance of saving and budgeting. Help them set financial goals.

3. Focus on paying off debts and make it a habit to save for an emergency fund. If you don't already have an emergency fund set aside, make sure to identify the exact amount of money you will put aside each month towards it. Pay off those debts first that charging you high rates of interest.

4. If there are two earning members in the family, roughly three months’ salary should be set aside as emergency expenses. During recession, double that amount is recommended especially if you are a single income family. If self employed, you should keep aside a year’s worth of expenses.

5. Cut costs. There are many ways to reduce expenses. Buy nothing. Resist sales pitches. Evaluate credit card offers carefully. Decide if you need something or want it.

6. Cut transport costs by using the car pool, use a bicycle if it is possible. Save on gas.

7. Cut housing cost by living with a roommate. Move in with your family until the downturn passes.

8. Save on food costs by eating at home. Stop going out to eat; instead, try to cook at home from scratch more often.

9. Keep the money flowing in. If you have a job, be a good employee. Prove your worth by doing a little more than is expected of you. Start networking so that in case you still get laid off, you have a safety net of contacts who might be able to help.

10. Find ways to reduce expenses. If you don't have a job, find other ways to make money fast. Focus on cutting your expenses, and consider volunteering; if you've got the spare time, there are organizations that will need your help, and you could establish good karma in your community.

Enjoy life. In order to avoid the depression associated with recession, don't let fear control you. It might make you an inflexible employee and strain your relationships. Be thankful for what you have, and make sure to have fun. Invite your family to think of creative ways to save money without compromising on happiness. Accept difficult times as a challenge and develop powerful resilience.

How does Consumer Confidence affect the markets?

Consumer Confidence is the level of confidence or optimism that an average consumer or an investor feels about the economic state and his own financial condition. This is one of the key areas that a consumer considers before he invests in stocks. If the economy of a particular country is in a good condition, it means that the investors are investing more or buying more things in that country. This also works the other way around. That is when the investors are buying less and saving more, the economy is in a bad state.

In the current economic scenario and the so called recession, one can clearly identify that the consumer confidence is low. That means the consumers no longer have faith that the companies will make good use of their investments. Hence companies need to be managed in a better way. They must also learn to deal with the customers’ needs. This is the time for innovation. Companies need to invent and find new ways to win back the customers’ confidence. They need to consider the current market scenario and offer the same products at lesser prices to consumers.

Hence it is evident that if the Consumer Confidence is low, the markets of that particular region are not doing that well. One way to measure the Consumer Confidence is the Consumer Confidence Index( CCI ) There is a body in the United States called the Conference Board. This conducts a survey of 5,000 households every month. The survey comprises of five basic questions.

- What are the current business conditions?
- Predicted business conditions for the next 6 months.
- What are the current conditions for employment?
- What is the family's total predicted income for the next 6 months?

There are 3 options while answering all the questions. They are positive, negative, or neutral. The results are released every month on the last Tuesday. This happens at 10 am Eastern Standard Time. Hence different countries use different surveys to measure CCI. You as an investor may be considering putting some money into the market. It would be advisable that you have a look at the CCI of the concerned country or the region. Any economy which is driven by the market is influenced in a huge way by how the consumer spends his money.

History of Futures Trading.

In the ancient history of futures trading, the motivation was probably much the same as ours today-to make trading for goods needed, whether immediately or later on in the future, easier and more predictable. Though not as technically sophisticated as current future markets with modern clearing houses, instantaneous electronic trading etc, ancient civilizations had their own forms of commodity market trading. Records of these ancient futures commodity markets transactions survive today, including promises of the date and time of transaction deliveries. Those civilizations which were able to ensure the orderly flow of needed commodities over key trade routes became extremely powerful in the ancient history of futures trading annals. The trust that powerful and successful trading kingdoms gained, allowed them to become arbitrators.

In the mid-nineteenth century, central grain markets were established and a central marketplace was created for farmers to bring their commodities and sell them either for immediate delivery (spot trading) or for forward delivery. The forward contracts were the forerunners to today's futures contracts. This concept saved many a farmer the loss of crops and profits and helped stabilize supply and prices in the off-season. Today's futures market is a global marketplace for not only agricultural goods, but also for currencies and financial instruments such as Treasury bonds and securities. It's a meeting place for diverse interest groups such as farmers, exporters, importers, manufacturers and speculators.

The organized way of futures trading, with well formed contracts, started in Chicago, USA in the early 1840s. The first centralized futures trading market, the Board of Trade of the City of Chicago, was established in 1948. This board has standardized the terms, delivery time and the quantity per contract of the futures. The products traded through futures markets until 1970s include agricultural commodities (wheat, rice, oats, etc), metals (silver, gold, etc) and energy products (crude oil, natural gas, etc). The Chicago Mercantile Exchange (CME), established in 1919, introduced financial futures for the first time in 1971 with the abolition of currency gold standards. Now financial futures are the most traded type of all futures and it also paved the path for other futures types like interest futures and index futures. In 1987, again CME introduced electronic trading for futures, which have revolutionized the futures trading practice with the global access.
Speculation and futures commodities markets existed long before the modern commodity market. Civilizations and traders of old were reasonably sophisticated, realizing much the same goal as today's commercial commodity producers and commercial commodity consumers in the futures commodities markets or the spot commodity market.

Why so many traders fail in currency trading? (Risk or gambling trading? Lack of education? Get rich in one day?)

Forex trading is a business and you should treat it like one. Most people treat it as a casino, and an extension of gambling, never taking it seriously and giving it the due respect and consideration it deserves. With the result, they never make money the way they should. It is only a small percentage of people who make profits and that is because they work hard at learning the business.

90 percent of newbie forex traders invariably suffer losses. This is because they do not bother to educate themselves and gather information, prior to plunging into it. Like in every business, it is essential to be educated and well informed about how the market works, the risks involved, the potential gains etc..

The most common mistakes that new traders make are lack of training and education, over leveraging, under capitalization, improper money management and succumbing to emotional responses of fear and greed.

If you think this is a good way to get rich in one day, it is the biggest mistake you are making. Currency trading is far more complex than what you think, but if you take the trouble to arm yourself with some knowledge, educate yourself on the subject, then you will be able to unravel the secrets behind forex trading.

If not, you will sadly be affected by temptation and will not be able to use your right judgment while trading currencies. Remember, when people treat this business as a means of getting rich quick, they forget that they can lose money very fast as well. Sometimes beginners face a run of good fortune, beginner’s luck, and if they are not careful, if they get carried away by greed, they lose it all too soon. Sadly, they lose interest and give up, rather than looking upon it as a learning experience. From which they could have learnt few lessons for the future.

But remember, there is no holy grail to unlock the mysteries of the forex market and no automated trading robot can guarantee you consistent profits. Only the desire, determination and dedication to invest time and effort into understanding the market will guarantee you constant profitable returns.

Dreams of Easy Money!

Dream On! There is no free lunch. This age old adage remains true even in the case of online trading. It is not a get rich quick scheme. Firstly, when learning online trading, you must understand that you cannot rely on anyone else to give you success – it comes from within. It has to come from you.

If you are new to online trading, you might find that you have a trading coach, or a friend or family member to take you through the baby steps and give you guidance, and even if they do it with the best of intentions and to the best of their ability, you will not succeed until you make an effort to understand the ways of the business.

Remember, you can take a horse to the water but you cannot make it drink. Similarly, you can get information on online trading, some people might give you tips, but ultimately it is your call and your responsibility. Anyone can learn online trading but it doesn’t mean making money is easy – it never is.

Sometimes, especially to others, who have no experience in trading, and who are onlookers , monitoring your success, it might look like easy money, but it never is, there is always hard work and a lot of study and research, a lot of trading experience, much money lost before a lot of money is made, all this is not realized by an outsider, but the insider knows it has been hard work all the way.

If it was that easy to make money, everybody would be doing it, nobody would be working hard on farms and in banks, in factories and mines. Everybody would be opening online trading accounts and spending all their waking hours on it.
So why aren’t they doing it? Do you honestly think that an automated trading robot will perpetually keep multiplying your capital? Life just isn’t that simple. There is no ‘set and forget’ method to success. One has to be committed, one has to constantly learn and upgrade that knowledge.

Success in online trading requires commitment and constant effort. You are competing with the smartest minds in the world. Respect the competition and arm yourself with education and the will to succeed, eventually success will follow.