The Responsive Manager/Leader

The Responsiveness Paradigm outlined elsewhere in this newsletter is applicable at a number of levels. For example, it applies to organizations in general, and the ability of the organization to respond to the needs of customers, staff and other stakeholders (eg. politicians, etc). It applies to non-supervisory staff, and their ability to respond to the needs of their managers, customers and co-workers. This month we are going to look at responsiveness as it applied to managers, leaders and/or supervisors.
Influence Of The Responsive Manager

The responsive manager tends to succeed by building bonds of respect and trust with those around him/her. Staff respond positively to responsive managers; they work more diligently, work to help the manager and the organization succeed, and will go the extra mile when necessary. That is because responsive managers act consistent with the principle that their jobs are to help their staff do their jobs. So, a basic inter-dependence emerges based on behaviours that show concern, respect and trust.

Responsive managers also influence those above them in the hierarchy. Because responsive managers have the ability to read and act upon the needs of their "bosses", they are perceived as helpful and reliable, or in a simple way, very useful. This allows them to get the "ear" of people above them in the system, and further helps get things done when needed.

Contrast this with the limited influence of the UNresponsive manager. The unresponsive manager is restricted in influence because those around him/her do not respect or trust them to look out for their welfare. Influence is more limited to the use of power coming from the formal position, and fear, a motivational component that is hard to sustain over time. Unresponsive managers tend to be perceived as self-interested, or at best uninterested in the needs of those around them. They also tend to be perceived by those above them as less reliable and less useful due to their focus on empire building, organization protection, and self-interest, rather than getting done what needs to be done.
How Do They Do It?

Responsive managers apply a number of specific skills and abilities to the task (as outlined generally in The Responsiveness Paradigm article). Above all, they appear to be "withit". Withitness

has a number of components. First withit managers are able to put aside their concerns to listen to (and appear to listen to) those around them. As a result, they know what is going on, and know what is both said, and said between the lines. They have the knack of appearing to know what people need even if those needs are not expressed directly.

However, knowing what is going on, and identifying the needs of those around them is not sufficient. The responsive manager also acts upon that knowledge, attempting to help fulfil the needs of employees, superiors, etc. Responsive managers wield influence to solve problems for those around them, often before even being asked.

Here's an example:

I was responsible for automating an office system in a government department. As happens sometimes, the Management Information Systems people were not keen on our going our own way on the project, despite the fact that they had indicated they could not do it for us in the near future. As a result their cooperation (needed for the project) was patchy. As team leader, I faced a number of roadblocks, despite the fact that our Assistant Deputy Minister wanted to see this project come to fruition. I regularly reported back to our Director, outlining progress and roadblocks. Every time I communicated roadblocks to the Director, they were removed within a short time, despite the fact that I did not request direct action. In addition, the Director advised and counselled me on how to deal with the "systems people" so I could have maximum impact. Despite the roadblocks, the project was completed on time and was very successful, much to the chagrin of some of the systems people, who I think were hoping we would fail.

This is a simple story, but one full of meaning. In this situation the Director was able to identify the project leader's needs with respect to the project, listening carefully, and identifying actions she could take to "smooth the path". Not only was the Director able to remove obstacles and fulfil the need of the project leader, but the Director responded on a deeper level, helping to teach the Project Leader methods of becoming more effective, fulfilling yet another need. All of this was assumed to be the proper role of the Director, and was done without expressing all of the needs specifically or explicitly.

We can contrast this with the unresponsiveness of the MIS people. They lectured, they fussed, they predicted dire consequences, rather than offering consistent, responsive help. They focused not on responding to the needs of their clients, but on some other factors having to do with control, and their own needs. Eventually, their lack of responsiveness resulted in the very thing they did not want; loss of control of the project. As a result of this project their overall status in the organization suffered, simply because at both an organization and individual level they were seen as barriers, rather than useful.

Let's look at one more example.

An employee had been working for a government branch for about a year, having moved to the city as a new resident. In a casual conversation, the supervisor noted that the employee wasn't looking at his best, and asked how he was feeling. The employee explained that he hadn't been feeling well lately, and sounded very tired and overwhelmed. The supervisor determined that the staff member didn't have a local family doctor, asked if he would like the supervisor to arrange an appointment, and proceeded to do so immediately. The problem turned out to be a minor one.

In this example we see again the ideas of "withitness" and responsiveness. The supervisor was able to identify that the staff member was in need of some help, despite the fact that the staff member did not state this explicitly. Note that the supervisor didn't pressure the staff member to go to the doctor, but identified needs, checked them out, and then acted upon them. In this case, help consisted of direct, helpful action.

Conclusion

These two examples are the stuff of loyalty and commitment. They are remembered years and years after the fact, and continue to extend the influence of managers. In this sense responsiveness is a critical component of management success, because it allows managers and supervisors to get things done, for the benefit of all players.

In the limited space we have, we have attempted to give you a feel of what responsiveness means. You might want to extend your own understanding by considering some of the following questions.

1. If you are a manager or supervisor, how can you modify your own behaviours so that you become and are perceived as more responsive by a) your staff, b) your boss and c) your customers?

2. Again, if you are a manager or supervisor what is your definition of the "responsive employee"? Can you identify your "favourite employees", and consider how they are responsive to you? Our bet is you will find that your most valued employees are responsive.

3. If you are non-management, what would you need to do to be perceived as more responsive by the people around you?

Money Management Principles

Trade With Sufficient Captial

One of the worst blunders that forex traders can make is attempting to trade without sufficient capital.

The trader with limited capital not only will be a worried trader, always looking to minimize losses beyond the point of realistic trading, but he will also frequently be taken out of the trading game before he can realize any sense of success trading the method(s) or patterns.

Exercise Discipline

Discipline is probably one of the most overused words in forex trading education. However, despite the clich¨Ś, discipline continues to be the most important behaviour one can master to become a profitable trader. Discipline is the ability to plan your work and work your plan.

ItĄŻs the ability to give your trade the time to develop without hastily taking yourself out of the market simply because you are uncomfortable with risk. Discipline is also the ability to continue to trade the methods and patterns even after youĄŻve suffered losses. Do your best to cultivate the degree of discipline required to be a world-class trader.

Employ Risk-to-Reward Ratios

The following shows you possible risk-to reward ratios, and the win ratios required to break even in a trading system.

Risk-to-Reward Ratio (in pips)and Win Ratio Required to Break Even(%)

40/20 (2 to 1) = 67%, 40/40 (1 to1) = 50%, 40/60 (1 to 1.5) = 40%,
40/80 (1 to 2) = 33.5%,
60/20 (3 to 1) = 75%,
60/60 (1 to 1) = 50%,
60 /90 (1 to 1.5) = 40%,
60/120 (1 to 2) = 33.5%

Important Note

Never risk more pips on a trade then you plan to make. It doesnĄŻt make sense to risk 100 pips in order to make only 10. Why? See below example.

Profit taking level (pips): 10
Stop used or pips at risk: 100

You win 10 times which makes 100 winning pips. You ONLY lose once and have to give back all profits!!!

This type of trading makes no sense and you will lose on the long term guaranteed!

Transferring Money Overseas Using Wire Transfers

Usually the way you will chose to transfer money overseas varies relative to the amount of money you wish to send and the way in which you need to send it ie its intended usage once its received.

Most commonly spoken of are methods of transfer like western union that involve a sum of money being sent by you, either your bank account or in cash for a recipient to pick up in cash with the help of identification, without the involvement of a bank account at the recipient institution.

The other option different to this is the option of a wire transfer. A wire transfer is the moving of money from one bank account to another directly and in a secure transfer.

The main advantages of a wire transfer are that firstly it is safer. No money is ever seen in cash (goes directly from the senders to the recipients bank) until withdrawn by the recipient from his own personal bank account and so there is less chance of an unforseen occurence spoiling the smoothness of the transfer. The level of security on international wire transfers is high. The money is sent with the requirement of only a routing number and bank account number and the details are sent over heavily encrypted banking networks to minimize the possiblity of theft or bank fraud. Wire transfers are insured and guaranteed.

The downside however to the western union transfer can be the turnaround time. Where with western union or moneygram transfers, money can be available for a recipient to pick up the same day, a wire transfer will usually take around 3-4 days.

Also the security and reliability of a wire transfer comes with the addition of a larger fee. Wire transfers usually set you back around $25 however depending on the amount of money being transferred can still prove to be more cost effective than a cash or money order transfer.

A wire transfer can be organised through your local bank at a branch or else over the internet for those banks that have it available. You will only need to look at whether or not the receiving institution has the facilities to accept wire transfers. Most major international banks do, but it always pays to check.

In summing up it is evident that under certain circumstances that vary based on the amount of money you are sending, for what purpose and the amount of time you require it to be received in, a wire transfer may be the way to go.

Wire transfers are the most reliable, most effective and convenient way to transfer your money to where you want it to go. If the circumstances fit and wire transfer is possible it is certainly recommended for avoiding hassles and cutting down on fees for large transfers.

7 Keys to Business Networking Growth

Referral networking in business is not going away. No matter how high-tech, plugged in, or globalized the world becomes, networking will be around forever. You need networking, and you need it to work for you. But as consumers, clients, customers, and executives all realize the power and usefulness of networking you are faced with the difficulty of discriminating how, when, why, and how much networking you should be doing. For example, if you joined every networking web site there was, you could make a full time job of just filling out web forms. Or, if you attended every networking function in your industry, you would do nothing but eat, drink, and mingle. So, what are you going to do. This article attempts to lay out seven keys to business networking growth.

1. Become the go-to guy for a networking question. As you begin to network, your circle of acquaintances grows. Your rolodex of numbers increases. And you start running out of room to put business cards. In time, you will build a reputation as a pretty good networker. Now and then someone may come up to you and say, "Hey, do you happen to know a good franchise consultant?" You dig in your drawer, whip out a business card and say, "Give him a call. I met him last March. Nice guy." Bingo. You've scored a point. You've made a connection. And you've won some trust. Eventually, a few more people will come up to you and say, "Hey, I heard that you may know a good marketing firm..." And so it has begun. By and by, you will receive a certain degree of recognition as someone who is very well connected, knows a lot of people, and can point people in the right direction. But networking is a snowballing adventure. The more people you know, the more people you can get to know. The more people that come to you with networking questions, the more people you can find out about and get to know. Make it your goal to become the networking guru in your space.

2. Seek opportunities to help others. Helping people is at the core of networking. A networking attempt is so much more than a handshake and an exchange of a name card. It is so much more than accepting a connection on LinkedIn. The value of your network is not measured by the amount of names that you know, but by the amount of help you can provide. As you survey the networking landscape, don't look at is as a host of names to know. Look at is as a host of people to help. After all, the only truly valuable networking will be from people whom you know personally and whom you have helped. Once you help people, especially in a sacrificial or altruistic way, you've won their trust. They have a degree of confidence in you. That confidence will translate into them recommending you. That is exactly what you want. That is the way to grow your network, and that is a crucial key to business networking growth.

3. Seek opportunities for others to help you. But it works both ways. Not only should you be helping others, but others can be helping you. If you need help, ask for it. Gaining help from others creates a human connection that can't be gained any other way. Besides, you get to see the skills of another from a unique angle. You get to see how the person works. You get to experience their product. And you get to establish a mutual relationship of trust. That goes miles in the networking world. People willl remember those whom they help, and it is the perfect way to build a strong, lasting network.

4. Be everywhere often. Though it sounds daunting, it is possible to carve out a significant presence for yourself. The key word here is "strategic." As I mentioned, it is an incredible waste of time to join every networking site out there. Though you will receive a plethora of invitations, be selective. Join only the ones that will best accomplish your purposes. It should be standard, however, to at least have a presence on LinkedIn, the current networking site leader. Other industry-specific websites should be consulted as well. In addition, attend several strategic functions as often as you can. Again, too much is too much, but make it your practice to be at the important ones as often as possible.

5. Know people well. When you meet people, remember their names and some specifics about them. Don't be ashamed to write names down. You need to remember them. Carry around a pen and pad of paper, and jot down notes. Not just for names, but facts, too. When you pick up the phone to call that potential customer, it will go a long way to say, "By the way, how's your mother-in-law? I remember you mentioned she had surgery last week."

6. Host something. Be a networking leader and go ahead and host something. It can be as simple as a backyard barbecue for all the CFOs in your town. Or it can be as big as a golf outing for all the engineering firms. Either way, you can quickly become a networking mogul, just by organizing events. After all, once the event is over, you have a list of everyone who signed up--complete with numbers and all.

7. Finally, make it fun. Networking can be a fulfilling hobby. After all, you're interacting with people. People can be a lot of fun. Face the challenge of being a networking guru, but make it an enjoyable and refreshing hobby.

About the Author:

Phil Evans is a master at the art of online networking and internet marketing in business. He challenges business owners to grow their offline business by harnessing the power of the internet. He's also the co-founder of SynergyBizNet, find out more at: http://www.SynergyBizNet.com

LACK OF BUSINESS ISN'T ALWAYS THE PROBLEM

When you're just starting out in business, it's a safe bet that you need more clients. But what if you have been up and running for a while, and you're still not making as much money as you would like? You may be in the habit of thinking that attracting new clients is the answer, but this isn't always the case.

There are many reasons why a professional services business might not be earning enough, but they typically fall into four categories: not enough revenue, not enough profit, not enough customers, or not enough time.

Start by looking at your gross revenue -- the total amount your customers pay you over the course of a year. How does it compare to others in the same line of business? Ask some trusted colleagues or check with your professional association for any statistics they may have.

What percentage of your gross revenue remains after you cover cost of sales? This is your gross profit. As a service business, you may have no cost of sales. If, however, you are selling books, tapes or software, or accepting credit cards, your inventory cost and credit card fees need to be deducted from your earnings before making other calculations.

Now deduct your business expenses from your gross profit. What percentage of gross profit remains? Is this a typical percentage for your industry? If you can't gather comparable data from colleagues, your professional association, or a published source like Dun & Bradstreet's "Industry Norms & Key Business Ratios," compare your profit margin (net income divided by gross profit) to a desired goal of 70%.

LOW REVENUE - If your gross revenue seems low for your industry, your profit margin is at least 70%, and you have about as many customers as you can comfortably serve, concentrate on increasing your revenue, rather than trying to improve your profit margin or bring in new customers.

Consider raising your rates, which may mean finding a market that is willing to pay more. Look for customers who will give you higher dollar volume contracts or place larger orders. Think about hiring more administrative help, which would free up more of your time to charge out at professional rates. You should also work to increase your passive income by selling products created by you or others, reselling some of your existing work, or licensing a process you have developed.

LOW PROFITS - If you are spending more than 30% of your gross profit on overhead and marketing, work on improving your profits. Look for ways to cut expenses by reducing your overhead, or focusing on your most profitable line of business.

In addition, if more than 15% of your gross profit is spent on marketing alone (assuming you are not a start-up business), consider cutting back on advertising or mailings, and using more referral-based marketing strategies. Seek out customers who will give you repeat business or long-term contracts.

TOO FEW CUSTOMERS - Low revenue combined with not enough billable work to keep you busy means you really don't have enough customers. If you don't have a marketing plan, it's time to create one. Focus your plan on the most attractive service you have to offer and the most lucrative market, rather than diffusing your energy by marketing several different service lines to more than one type of customer.

If you already have a marketing plan, but it's not paying off, you may need to break into a new market, look for a more appealing way to package your services, or form an alliance with someone who can send a steady stream of business your way.

TOO LITTLE TIME - It's possible that you simply don't have enough time to earn more money. When you are consistently spending over 25 hours per week serving clients, with more potential customers in the pipeline than you can realistically serve, it's time to hire an employee or bring in a junior partner. If you're not ready to take that step, think about subcontracting work to a trusted associate, and keeping a percentage of their billings.

In reading the suggestions above, you may have discovered that you don't have enough information to diagnose your earnings problem. There are six statistics every service business owner should know: revenue, expenses, profit margin, number of customers, average sale amount, and billable time. If you don't have the answers, start tracking these measurements today.

Copyright © 2001, C.J. Hayden

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Forex News Trading Tip: How To Trade The FOMC

The Federal Open Market Committee (FOMC) decision on interest rates is one of the most powerful market movers in the forex market and when the markets move traders trading the news have the opportunity to make money. The FOMC sets the discount rate or federal funds rate and because interest rates are set higher to induce foreign investment and therefore fight inflation during times of prosperity and lower to increase spending during recessions they are one of the main factors influencing the strength of the dollar.

Economic indicators play a huge role in the forex trading especially for traders who approach the market through fundamental analysis and trade the news. The Federal Open Market Committee (FOMC) interest rate decision is one of the most influential indicators for the US dollar and you can be sure after the news is released there is going to be volatility in the markets and volatility is what traders thrive on.

I have heard many 'traders' say never to trade the news and especially the FOMC. Although the FOMC interest decision is a news event and can fall under the category of through fundamental analysis I am a technician and I believe that charts always price everything in. However I guarantee the market does not know what exactly the Feds comments and decision will be, therefore it is not priced in yet and this will cause the markets to react when they do find out.

This is confirmed by the change in price after the decision and the continuation in the days following. I have been trading the Fed for eight years now and yes I have been burnt in the past and that is exactly how I have come to learn how to trade it properly. The most common pattern to trade the Fed is the whip-saw. But do not be fearful of it, embrace it.

Here is how it happens, first there is a large spike one direction (traders come in and follow that direction)followed by a large spike in the opposite direction (those same traders now sell their first position at a loss and reverse their position - this is when I take a position in the direction of the original move)followed by an extended move back in the direction of the original spike (all the emotional trades are left sick to their stomachs) and I am left holding a very nice position setting myself up to capture a larger than average market move.

If this pattern does not play out exactly as outlined I stand on the sidelines and do not trade at all. Because the markets are moving fast in the period following the FOMC interest rate decision I am watching a very short time frame, mainly the one and five minute charts. Jordan Lindsey is a professional trader who's personal forex trading group 'Conquering The Markets' utilizes his forex trading strategies to trade his forex trading systems with sound money management and together work toward helping people all over the world live better lives.

via http://www.jcls-forex.com/

Trading Currency Through Online Forex Brokers

Access to foreign exchange (forex), the most extensive market on the planet, is generally through an intermediary known as a forex broker. Similar to a stock broker, these agents can also provide advice on forex trading strategies. This advice to clients often extends to technical analysis and research approaches designed to improve client forex trading performance.

Financial institutions are generally the most influential in the forex market through high-volume, large-value forex currency transactions. Historically, banks enjoyed monopolistic access to the forex markets, but through the Internet, any forex speculator can also enjoy 24 hour access to the market via a forex broker.

Secure web connections today allow many forex traders to work from home, where ready access to news and other technical advice informs decisions on what forex positions to take. Similar moves are being made by stock brokers, who are also moving out of banks and other traditional institutions.

Your needs in the market will influence your choice of forex broker. Online forex brokerage firms, known as houses, provide those new to the forex market with detailed research, advice and simulators to learn how to use their forex trading tools. The experienced online forex trader is catered to by other broking houses, with in-depth advice, but less focus on forex trading instruction based on the assumption that you are familiar with the forex market. To make an informed choice, it is advisable to trial several differing online forex broking houses and their trading tools to find the best fit for your needs.

Want To Know If Day Trading Is For You?

Day trading can be a very dangerous form of financial speculation, but it is going on from PC all over the United States and the world. The idea is to sell a futures contract to buy a currency, or a commodity, and then buy it back, even at a later date, at a lower price. Unlike position traders, who can hold onto a stock, bond or commodities position for a long time, day traders are the scavengers of the system. They have no interest or loyalty to any currency, commodity or stock in a company. They are simply trying to, as Adam Smith, granddaddy of the British System said, to “buy cheap, and sell dear”.

There is not just the buying and selling of stocks and bonds, but also trading in derivatives and futures. Derivatives values are determined by other indexes or numbers, such as interest rates and currency levels. If you are making a futures bet that a stock will go up, or to have an option to buy a stock at a certain level.

There are many courses on the market, some in person, and some through the Internet in written form, or audio or video. Basically, what one learns is a trading system. This system can involve commodities such as gold, silver or oil, or on the Forex (foreign exchange) market, the value of a currency. Since, the person plans on day trading, it makes little difference which one of these objects are chosen to trade, except that they are all values of high volatility where one can make a profit (or loss) quickly. If you do a Google search on these topics, you will see many alternatives. Some systems involve consulting news and financial reports at a certain time of day, and using this to make decisions what futures to buy in the morning and the sell in the afternoon.

Other systems can be more esoteric. A popular system uses the variations of currency values over different time periods, some of which can be a short as 5 or 10 minutes. The curve produced by these currency value fluctuations, say of the US Dollar/British Pound pair are then plotted out on a graph and compared to the Fibonacci number series, the golden mean relations, or other ideal numeric values, and this is used to estimate the right time to buy and sell currencies. Are you willing to risk your fortunes on such schemes? Some say it is a winning proposition if you master “the system”.

Why So Many People Fail At Forex Trading?

It's relatively easy to understand why most people lose money when they are trading Forex. When we see someone promoting this market, they always talk about the great advantages of the forex market but they never tell you that each one of these advantages can also get you in trouble. The fact that the Forex market is open 24 hours a day is an advantage because you can trade whenever you want but you don't have the volatility needed whenever you want; the Forex market has a high leverage (100, 200 or even 400x). If you have a mini account and use, for example, 100x margin, you can easily get your account ripped off with one single trade. Everyone says "Come trade Forex. There are a lot of free resources and it doesn't take you much time.". This is also a wrong idea about Forex.

If you want to succeed in the Forex market, you have to commit time, energy and money. Basically, you have to treat Forex trading like any other business. If you want to make some money in a coffee shop, you have to invest in a space, in the product you're selling, you'll have to see where you're going to open it, what money you need to ask the bank, and so on. Only after the opening of the coffee shop you can start taking your profits but never forget to keep investing to make it better than the competition. This basic example shows you exactly the mentality you need to have in order to be successful in the Forex market. First of all, you need to research about the market itself, read all that you can, invest some money in good resources, open a demo account with a broker and only then, if you're making money consistently, start trading a real account and make good profits. And, of course, always keep learning because things change all the time.

But why so many people fail at forex trading?

1 - Most people treat Forex as a get rich quick scheme.

2 - Most people expect to have great returns in a short period of time.

3 - Most people think it's easy to make money in Forex.

4 - Most forex traders believe they are better than other traders and the market.

5 - Most people think that is possible to make money in Forex with no work.

6 - Most people choose a bad broker.

Risks by the foreign exchange on Forex

The Forex is essentially risk-bearing. By the evaluation of the grade of a possible risk accounted should be the following kinds of it: exchange rate risk, interest rate risk, and credit risk, country risk.

Exchange rate risk. Exchange rate risk is the effect of the continuous shift in the worldwide market supply and demand balance on an outstanding foreign exchange position. For the period it is outstanding, the position will be subject to all the price changes. The most popular measures to cut losses short and ride profitable positions that losses should be kept within manageable limits are the position limit and the loss limit. By the position limitation a maximum amount of a certain currency a trader is allowed to carry at any single time during the regular trading hours is to be established. The loss limit is a measure designed to avoid unsustainable losses made by traders by means of stop-loss levels setting.

Interest rate risk. Interest rate risk refers to the profit and loss generated by fluctuations in the forward spreads, along with forward amount mismatches and maturity gaps among transactions in the foreign exchange book. This risk is pertinent to currency swaps, forward outright, futures, and options (See below). To minimize interest rate risk, one sets limits on the total size of mismatches. A common approach is to separate the mismatches, based on their maturity dates, into up to six months and past six months. All the transactions are entered in computerized systems in order to calculate the positions for all the dates of the delivery, gains and losses. Continuous analysis of the interest rate environment is necessary to forecast any changes that may impact on the outstanding gaps.



Credit risk. Credit risk refers to the possibility that an outstanding currency position may not be repaid as agreed, due to a voluntary or involuntary action by a counter party. In these cases, trading occurs on regulated exchanges, such as the clearinghouse of Chicago. The following forms of credit risk are known:

1. Replacement risk occurs when counterparties of the failed bank find their books are subjected to the danger not to get refunds from the bank, where appropriate accounts became unbalanced.

2. Settlement risk occurs because of the time zones on different continents. Consequently, currencies may be traded at the different price at different times during the trading day. Australian and New Zealand dollars are credited first, then Japanese yen, followed by the European currencies and ending with the U.S. dollar. Therefore, payment may be made to a party that will declare insolvency (or be declared insolvent) immediately after, but prior to executing its own payments.

Therefore in assessing the credit risk, end users must consider not only the market value of their currency portfolios, but also the potential exposure of these portfolios. The potential exposure may be determined through probability analysis over the time to maturity of the outstanding position. The computerized systems currently available are very useful in implementing credit risk policies. Credit lines are easily monitored. In addition, the matching systems introduced in foreign exchange since April 1993 are used by traders for credit policy implementation as well. Traders input the total line of credit for a specific counterparty. During the trading session, the line of credit is automatically adjusted. If the line is fully used, the system will prevent the trader from further dealing with that counterparty. After maturity, the credit line reverts to its original level.

The Perfect timing to sell your stocks

While quite a bit of time and research goes into selecting stocks, it is often hard to know when to pull out – especially for first time investors. The good news is that if you have chosen your stocks carefully, you won’t need to pull out for a very long time, such as when you are ready to retire. But there are specific instances when you will need to sell your stocks before you have reached your financial goals.

You may think that the time to sell is when the stock value is about to drop – and you may even be advised by your broker to do this. But this isn’t necessarily the right course of action.

Stocks go up and down all the time, depending on the economy…and of course the economy depends on the stock market as well. This is why it is so hard to determine whether you should sell your stock or not. Stocks go down, but they also tend to go back up.

You have to do more research, and you have to keep up with the stability of the companies that you invest in. Changes in corporations have a profound impact on the value of the stock. For instance, a new CEO can affect the value of stock. A plummet in the industry can affect a stock. Many things – all combined – affect the value of stock. But there are really only three good reasons to sell a stock.

The first reason is having reached your financial goals. Once you’ve reached retirement, you may wish to sell your stocks and put your money in safer financial vehicles, such as a savings account.

This is a common practice for those who have invested for the purpose of financing their retirement. The second reason to sell a stock is if there are major changes in the business you are investing in that cause, or will cause, the value of the stock to drop, with little or no possibility of the value rising again. Ideally, you would sell your stock in this situation before the value starts to drop.

If the value of the stock spikes, this is the third reason you may want to sell. If your stock is valued at $100 per share today, but drastically rises to $200 per share next week, it is a great time to sell – especially if the outlook is that the value will drop back down to $100 per share soon. You would sell when the stock was worth $200 per share.

As a beginner, you definitely want to consult with a broker or a financial advisor before buying or selling stocks. They will work with you to help you make the right decisions to reach your financial goals.