Basics of Forex

The short form of foreign exchange is forex and the asset class that is dealt with here is currencies. The act of exchanging the currency of one country’s with another currency of a different country for different reasons like commerce, tourism, etc. As there are many businesses which operate on a global scale, it is quite an essential one need to conduct transactions using different currencies.

The currencies are now allowed to freely float against each other and the values of the currencies get varied which has created the need for the services of foreign exchange. These services are being offered by the investment commercial banks on behalf of the customers. Also, it has resulted in creating a speculative environment wherein the currencies get traded with one another using the internet with the purpose to earn a profit.

While the forex transactions are usually carried out by a bigger financial institution even the individual investors could opt for trading here as it offers an excellent trading opportunity. It has very low fees and commission, which makes it easily accessible to all the investors.

There are two unique features to the currency being an asset class:

You will be able to gain value in the rate of exchange

You will be able to earn the differential rate of interest between the two different currencies.

Forex as speculation

As the currency values keeps fluctuating constantly between the different countries currency due to varying demand and supply factors like trade flows, interest rates, economic strength, geopolitical risk and tourism, there exists an opportunity to bet against the change in values either by selling or buying one currency against other with the anticipation that the currency which you bought will gain in its value in the future and the currency you sold will weaken against the counterpart.

Forex as hedge

Commercial organizations that are doing business with foreign countries are always at a risk due to the fluctuation in the value of the currency when they need to sell or buy goods from another country. Hence, the forex will facilitate to hedge that risk by arriving at a fixed rate so that the transaction can be concluded in the future without losing out any money.

In order to accomplish this, the organization or the trader has to sell or buy currencies in the swap or forward markets wherein the bank will fix a rate so that he will be aware of the exact rate of exchange and he can be prepared to mitigate his company’s risk. Even the futures market too can offer a way to hedge the currency risk but it depends on the trade size and the currency involved. The futures market is less liquid and operates on a centralized exchange whereas the forward markets, exist within the interbank system and are decentralized.

Advantages of trading in forex

It is the largest market with regard to the volume traded

It offers the highest liquidity

One can trade 24 hours a day around the globe

It can be easily accessed

Steps Towards Safe Trading In Forex

Knowing how profitable forex trading can be, there are numerous people today getting lured to invest their money in this market. One of the causes that are responsible for this drift is the limited requirement of finances to fund the venture. Based on the possible leverage, the investor can purchase as many currencies as possible for him or her. Not only this, but there is also no additional brokerage commission included in the investment. The main move for which you need to spend money is the bid-ask-spread, which basically clarifies the quoted selling and buying price

The functioning of forex is different from that of stocks as no central exchange exists in case of forex trading. Instead, it’s the strong network of banks, brokers, and dealers that facilitate the dealings. In addition to these features, another aspect that attracts investors towards the forex industry is the least requirement of homework to be done before floating the money. Since information on only a few currencies is required, the investors do not have to gather elaborated details and facts.

Threats in forex

Since forex happens to be the biggest financial market worldwide, it has a huge amount of money present in it along with respective currencies. This is the reason why it is considered to be a comparatively volatile and risky medium for investment. At a given time, one investor might earn thousands of dollars as profits and others might lose all of it. In case you are using good online trading software, then you can always stop participating in the market to ensure that you do not lose money when you realize that the market is going down. Remember that it is very essential for all the investors to invest in a limited way and back off the moment they realize that the results are not turning out to be as expected.

Hence, you must be aware of the possible risks in forex trading and should also know the means to deal with them in case you find yourself trapped.

Steps to prevent frauds and scams in forex trading

Some of the ways through which you can protect yourself and your finances while involving in forex trading include:

  • Work with recognized traders: Make sure that you pick a trader that is famous for offering reliable sources and services in the business. You can research online or even rely on the feedback shared by your peers who have already indulged in this trade before.
  • Study the dynamics of the industry: You must try to gather as much information as possible for you about the industry before making your first investment. This is because a lot of money that you make or lose in this business will be quite dependent on the knowledge you have regarding the forex market.
  • Stay watchful about leverage: Leverage is something that can actually loop in huge losses for you in future. This is the reason why you need to stay vigilant and careful.
  • No risk beyond 2% for each trade: Remember that you do not have to take the risk of more than 2% for trade that you indulge in. This definitely limits the amount of profit you will make, but it also brings down the range of losses that you might incur in case the market falls.

Follow all these recommendations as nothing is as crucial as making safe investments for you.

Fund Raising Options to start off new business

Money is the most important M of all the three M’s (Man, Machine, and Money) required to start off any business. The entrepreneur has many options at his disposal but selecting the right option is something that requires a lot of detailed analysis and a well-defined business plan. It also depends on the nature and size of the business he/she wishes to set up.

Owners Startup capital

It is always better than the prospective entrepreneur sets aside some savings of his own from the time he has decided to start off a new venture. This can be used as a seed capital to start off the initial set up. He would have to do a detailed market study and also devise an effective business plan with the help experts in this field. The business plan is a primary requirement for any business to raise capital, be it from banks or any other informal sources.

Seed Funding or Venture Capital

Venture Capital is a type of funding where the entrepreneur needs to convince the prospective investor/company to fund his/her idea. The success of this option completely depends on the how profitable the business idea is and the ability of the entrepreneur to convince the investor. The borrower would have to present a detailed synopsis of his business idea along with the cash flow projection for coming 5 years. The funding happens in installments according to the different stages of the business development.

Partnership Capital

This is the most common source of capital. The business would have to be registered as a partnership firm to be able to raise capital. Capital is usually sought from known people or family members with a promise of return on the capital by way of profit from the business idea. All partners would be entitled to a share in the profit based on their investment.

Bank Loans/ Debt Funding

Loans are the most popular and traditional sources of raising funds for the business. The entrepreneur would be required to submit the business plan and also some kind of collateral to avail this facility.


Equity mode of investment requires the entrepreneur to share the ownership of the business among the investors. The Equity shareholders are like the owners of the firm. These sources require a lot of legal formalities to be completed like registering the company, filings with the governing authorities. This would be suitable for firms that plan to expand their business.

All the sources come with different conditions attached with respect to return on capital but it all depends on how well the business idea is presented to the prospective lenders.




Should you manage your funds yourself or seek the assistance of the experts?

Funds might be big or small. But when there are funds there should definitely be a management plan. Your income might be less. Or your expenses might be so high that you are left with nearly zero savings. But there should be no excuse when it comes to planning your investments. Investments are not just going to fetch your interests. They would ensure that your money is secure and that you do not overspend. You would also be able to reap tax benefits from several investments. When you think about planning your investments and managing your funds there is one question that you should be able to answer- should you manage your funds yourself or should you choose a fund manager?

Read Bitcoin Trader review

Why should you consider seeking the assistance of a fund manager?

A fund manager is someone who is an expert in this field. So the manager would know about all the available options in investments. As a new investor, you might not really know about all the existing plans. There might be investments suitable to big budgets and those for small budgets. So a fund manager would give you an idea about all the different choices you have in your hand.

You would end up saving a lot of time when you choose a fund manager. You would simply be depositing and entrusting your funds to the manager. Taking decisions placing orders and other such tasks would be performed by the manager.

Why should you consider managing your funds yourself?

Fund managers would charge you for the service they provide. So if you are on a tight budget it would be a good idea to work on managing your funds by yourself. The profits you make depend a lot on the fund manager you choose. If you are not able to find a reliable fund manager who also charges a reasonable fee then you would find it better to take the decisions yourself.

What should you really do?

There are pros and cons to both the option. So a smart investor is one who strikes a balance between both the ideas. You should diversify your portfolio and have the perfect mix of investments that consist of both managed funds and funds that you take care of yourself. The experiential knowledge a fund manager has after all the years of working in the market would be valuable in your investment journey.

Factors Influencing A Business Valuation Report

In any kind of activity, certain external or internal elements affect every process, there are various factors which actually determine the content, construction, and result of a business valuation. This article summarises those elements that shape up a business valuation report.

The first step to the final step

Economic factors

When you start the preliminary work of evaluating a business or company, the economic conditions, including income, debts and the atmosphere of the company have their say in the analysis. For every valuation report, there will be an objective, like the company is on the verge of selling or getting acquired, or planning for a change in the management or partnership etc and a target audience for whom the valuation is to be done. These, along with the purpose of making the appraisal report influence the entire construction of the analysis.

The internal conditions of the company such as manufacturing methods, labor, and work-force, management structure, statistical publications from legislative bodies and external economic factors from local, regional and larger conditions find their way into the report.

Financial factors

Regular update of financial statement forms the backbone for the running of any business and business valuation studies the statements using methods like ratio analysis, common size analysis, trend analysis over time and subject, and industry comparative analysis. The business in itself is analyzed as well as with other industries of the similar genre from the date of valuation.

The parameters covered include cash flow, balance statements, liquidity, discounts, turnover, etc. The company’s growth prospects can be represented in terms of revenues, expenditure, profitability, market capitalization, risk management and capital budgeting while building the valuation report. The number of shares and the stock price are also considered for the current period as well as in trend analysis, to finally form the earnings multiple.


Three primary approaches are used for determining the value of a business depending on the objective of the appraisal report, time period and the target audience. Based on the requirement, a person carrying out the business valuation constructs an analysis mode using one or more of these approaches.

  1. Income approach: This approach follows the discounted cash flow or the net present value of the income generated by the business.
  2. Market approach: The value of the business is represented by comparing it with similar industries working on the same level and region in the common market in this comparison approach.
  3. Asset-based approach: The value of the business is considered from its various parts or assets to get a net asset value.

The three mistakes everyone makes when trading in stocks

Dreaming big is not the problem, bad execution is:

I was only in my early twenties when I was chosen for a job in a big corporate where I was to derive a big monthly remuneration package. This was also the first time that I was going to have so much money at my disposal. I was still to fly the nest and so there was nothing really that I had to invest in or worry about any expenditure. That left me with the doubt as to what I would do with all the money accumulating in the account.

Surely, didn’t want it to sit too long there:

I always considered myself to be the guy who is good with numbers and that I had an analytical mind and here when confronted with the practical possibility of using up a fund I was at crossroads trying to decipher what is the best way to let the money work for me.

Stock market beckoned!

There was a stock that I was following for a long time, even while at college and had mentally noted to myself long ago that one day when I had sufficient funds I would unhesitatingly invest in stocks. Now was the time to make that dream into a reality. I hooked up my account with a de-mat account that would let me trade at the stock market online.

Now, the three mistakes that everyone makes in the stock market were also committed by me. What are they?

  1. Focusing too much on technicalities:


Share market honchos do not attribute their success to the knowledge that they have. Instead a lot many of them feel that it is only 10 percent of the contributor to the success there. Acquiring knowledge is good but not to the extent of reading more than is required!


  1. Swimming against the trend:


This is not the smartest thing to do. There is a certain kick that comes in when you try to not follow the trend. For example, if the markets are rising, you are busy preparing for its downward spiral and predicting that it will come crashing down soon! This does not at all help in the long run and it can add a bag full of disappointments to you.


  1. Not managing risks:


Losing money at trading is not bad really. What is bad is the casual approach that traders have at losing money. At no point in time can you be casual about losing more money than you can afford to lose. At that moment probably you do not realize the corrosive effect that it has on your total capital but slowly and surely it will eat up into your investments and not leave you with the best of taste.


Be a smart trader to be a happy trader!

Add A Fintech Touch To Banking

For planning a startup venture, there are three factors which constitute the working of your business; concept, operation, and finance. In today’s smart world, these three factors and the success of your business needs a strong basic framework to progress. This is innovation in the field of science and technology. When technology innovates the financial aspect of your startup or any other institution, it becomes functional as Fintech or Financial Technology.

Properly defining, Fintech is the inclusion of technology as a back-end support to financial services for ventures in any sector and thereby leading to innovation in rendering products and services to the customers. Best common examples of sectors where Fintech is the spearhead of operations include retail banking, education in finance and economy, digital currencies, investment, money management, and marketing.

How banking is revolutionized by Fintech

The era is gone when customers have to impatiently wait till the bank clerk searches entries and make entries in the heavy transaction ledgers. We no longer become frenzy in checking our passbook entries for that one doubtful transaction, but refer our mobile messages instead. The possibility of human errors was also more, with the customers having to be extra conscious to avoid loss of their money. Banks are smart now and technology is driving it in every aspect, from transactions, marketing to record-keeping. Fin-tech has made banking a day-to-day activity in our lives.

We transfer money on the go using mobile banking, get our balance and account statements on the mobile with just a miscall and register ourselves for any application with a click. All these are possible by the entry of Fintech as a money management tool in banking. Desktop and laptops have replaced ledgers, mouse and keypads have replaced pens, machines have replaced counters and mobiles have replaced branches.

Improving business

Where once human conscience, direct customer feedback, and product sales helped banks to improve their services and sales, automatic systems are doing the same for them now. You enter into your online banking site and carry out any transaction, send requests online and shop in whichever store you want. Every minute detail reaches the bank and gets documented.

Modern money management tools incorporate the smartness of technologies like:

  • Remote sensing
  • Artificial intelligence
  • Automatic market watching and analysis
  • Data-driven marketing strategies
  • Predictive functioning using customer behavior

Now, humans do not learn to improve their functioning, instead, apps learn and study their customers and humans use them for creating better machines for better banking services.

Insights on Blockchain Technology


The potential of technology has been proven time and again both on the positive and negative parlance, while many consultants, technical experts are breezing around and crashing into the concepts of digital wallets, almost what is inseparable is bitcoins and blockchain, the two B’s are p2p technology which has garnered enough mileage from all industries worldwide. During the financial crisis in late 2008 when the entire question on how to handle global financing was been mused on, there came the alternative digital cash payment system which made transactions possible without any third party trusted networks.

What came as an open source for the public to bank on without continuous monitoring by any nodal authority, however without compromising on the digital safety of the currency with the use of cryptography and advanced technology. Blockchain concept is simple to term as a public ledger which has data permanently not erasable and widely used to find the best carpet maker or to make payments to anyone without any intermediary. The revolutionary advanced ledger system has the potential to cover almost any length of transactions once complete to be immutable.

How does Blockchain work?

A huge global spreadsheet which runs on millions of computer network and the widely distributed database is how one can simply understand blockchain, any structured information can store in the ledger,

  • anyone can change the underlying code and can make changes in the ledger, however, the previous record will remain and cannot be erased making it the safest to keep sensitive information like patient history in the healthcare industry
  • the cryptic codes used are one of kind and unique which cannot be hacked and deleted from any network making it a platform across all strata of the society
  • the permissionless system allows one to access, record, make payments, receive credits, which has to be moved into personal wallet making Bitcoin the biggest in the blockchain,
  • the data is interlinked and in form of virtual blocks, one leads to the previous, and so on creating a series or blockchain which runs on many computers
  • this underlying publically distributed technology is not just about Bitcoins but has further application of the same where smart contracts pay for the originality of the work done

With all the clamor and the unrest on the regulatory aspect of the technology, there are being widely used by musicians who can record their song and keep them in the blockchain, if anyone wants to use them they pay for the contract which is digitally encrypted and use it, that is how the reach of this technology is, once the governance part is taken care of, there is no looking back on the evolutionary technology.




Your Credit Score Matters & Here Are The Reasons

Although we all might differ in various other aspects, one significant requirement known as the trouble-free financial situation unites us all, indisputably. Yes, all of us work hard to maintain a well-built financial position, for which our credit score matters. A credit score is generally, a 3-digit score that sketches your performance as a borrower. That is, if the credit score is good, you would be considered a reliable borrower, who would pay the loaned money on time and whereas, if the credit score is lower then, your chances for availing the financial assistance is very less likely.

If you are wondering how this assessment of yours in the name of credit score could bother your financial position and reputation, keep reading to enlighten yourself.

  • Affordable loan

Whether your desire is to buy a car or buy a townhouse, most likely you would end up seeking the suitable financial assistance, for which your credit score greatly matters. First of all, without a credit score, it is unlikely that you could avail a loan, which would certainly burden your financial situation! Next, even if you avail one with a poor credit score, the interest rate offered to you would be higher, without any doubt that prevents you from meeting your other financial necessities uncomplicatedly.

  • Refinancing your mortgage

Almost all of our expectations is to enjoy our old age relaxingly, for which staying away from unnecessary financial burdens like the mortgages is important. But, in reality, not all of us can retire mortgage-free and in such case, refinancing the mortgage into lower interest rate loans possible is preferable, which cannot happen without a good credit score. After all, old age is not meant for hardcore financial challenges, to avoid which caring for your credit score really matters.

  • Attractive credit card rewards

Now, who would say no to some extra money or the extra perks and sophistication? Not me, as they can not only lighten our mood but also can lighten our financial position, satisfactorily. To enjoy one, be sure to concentrate on the ways to improve and maintain a good credit score so that the specific credit card issuing company rewards you with some exciting extravaganza!

  • Lower insurance premiums

Whether you apply for your car insurance or your business insurance, the first thing the insurance provider would do is to verify your credit score, whose value can impact the premium amount quoted for you. To simply put, if your credit score is good, your premium is affordable and if your credit score is poor, your premium is unmanageable and so your other financial necessities, unfortunately!