Djabalok

Issue of The Ticker & Investment Digest

2009-10-21T05:03:00.000-07:00

The following article appeared in the December 1909 issue of The Ticker & Investment*Digest.

Some time ago the attention of this magazine was attracted by certain long pull Stock*Market predictions which were being made by William D. Gann. In a large number of cases Mr Gann gave us, in advance, the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched.

For instance, when the New York Central was 131 he predicted that it would sell at 145 before 129. So repeatedly did his figures prove to be accurate, and so different did his work appear from that of any expert whose methods we had examined, that we set about to investigate Mr Gann and his way of figuring out these predictions, as well as the particular use which he was making of them in the market.

The results of this investigation are remarkable in many ways. It appears to be a fact that Mr Gann has developed an entirely new idea as to the principles governing stock market movements. He bases his operations upon certain natural laws which, though existing since the world began, have only in recent years been subjected to the will of man and added to the list of so-called modern discoveries.

We have asked Mr Gann for an outline of his work, and have secured some remarkable evidence as to the results obtained therefrom. We submit this in full recognition of the fact that in Wall Street a man with a new idea, an idea which violates the traditions and encourages a scientific view of the Proposition, is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities the said majority abhors.

Mr Gann's description of his experience and methods is given herewith. It should be read with recognition of the established fact that Mr Gann's predictions have proved correct in a large majority of instances.

"For the past ten years I have devoted my entire time and attention to the speculative markets. Like many others, I lost thousands of dollars and experienced the usual ups and downs incidental to the novice who enters the market without preparatory knowledge of the subject.

"I soon began to realise that all successful men, whether Lawyers, Doctors or Scientists, devoted years of time to the study and investigation of their particular pursuit or profession before attempting to make any money out of it.

"Being in the Brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations of others. I found that over ninety percent of the traders who go into the market without knowledge or study usually lose in the end.

"I soon began to note the periodical recurrence of the rise and fall in stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. After exhaustive researches and investigations of the known sciences, I discovered that the law of vibration enabled me to accurately determine the exact points at which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the street is aware of either. Most speculators can testify to the fact that it is looking at the effect and ignoring the cause that has produced their losses.

"It is impossible here to give an adequate idea of the law of vibrations as I apply it to the markets. However, the layman may be able to grasp some of the principles when I state that the law of vibration is the fundamental law upon which wireless telegraphy, wireless telephone and phonographs are based. Without the existence of this law the above inventions would have been impossible.

"In order to test the efficiency of my idea I have not only put in years of labour in the regular way, but I spent nine months working night and day in the Astor Library in New York and in the British Museum of London, going over the records of stock transactions as far back as 1820. I have incidentally examined the manipulations of Jay Gould, Daniel Drew, Commodore Vanderbilt & all other important manipulators from that time to the present day. I have examined every quotation of Union Pacific prior to & from the time of E.H. Harriman, Mr Harriman's was the most masterly. The figures show that, whether unconsciously or not, Mr Harriman worked strictly in accordance with natural law.

"In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the value of stocks, and that there exists a periodic or cyclic law which is at the back of all these movements. Observation has shown that there are regular periods of intense activity on the Exchange followed by periods of inactivity. Mr Henry Hall in his recent book devoted much space to ' Cycles of Prosperity and Depression', which he found recurring at regular intervals of time. The law which I have applied will not only give these long cycles or swings, but the daily and even hourly movements of stocks. By knowing the exact vibration of each individual*stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be met.

"Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall, in the value of stocks. At certain times a*stock will become intensely active, large transactions being made in it; at other times this same stock will become practically stationary or inactive with a very small volume of sales. I have found that the law of vibration governs and controls these conditions. I have also found that certain phases of this law govern the rise in a stock and an entirely different rule operates on the decline.

"While Union Pacific and other railroad stocks which made their high prices in August were declining, United States Steel Common was steadily advancing. The law of vibration was at work, sending a particular stock on the upward trend whilst others were trending downward. "I have found that in the stock itself exists its harmonic or inharmonious relationship to the driving power or force behind it. The secret of all its activity is therefore apparent. By my method I can determine the vibration of each stock and also, by taking certain time values into consideration, I can, in the majority of cases, tell exactly what the stock will do under given conditions.

"The power to determine the trend of the market is due to my knowledge of the characteristics of each individual stock and a certain grouping of different stocks under their proper rates of vibration. Stocks are like electrons, atoms and molecules, which hold persistently to their own individuality in response to the fundamental law of vibration. Science teaches that 'an original impulse of any kind finally resolves itself into a periodic or rhythmical motion; also, just as the pendulum returns again in its swing, just as the moon returns in its orbit, just as the advancing year over brings the rose of spring, so do the properties of the elements periodically recur as the weight of the atoms rises.'

"From my extensive investigations, studies and applied tests, I find that not only do the various stocks vibrate, but that the driving forces controlling the stocks are also in a state of vibration. These vibratory forces can only be known by the movements they generate on the stocks and their values in the market. Since all great swings or movements of the market are cyclic, they act in accordance with periodic law.

"Science has laid down the principle that 'the properties of an element are a periodic function of its atomic weight'. A famous scientist has stated that 'we are brought to the conviction that diversity in phenomenal nature in its different kingdoms is most intimately associated with numerical relationship. The numbers are not intermixed accidentally but are subject to regular periodicity. The changes and developments are seen to be in many cases undulatory.' Thus, I affirm every class of phenomena, whether in nature or on the*stock*market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.

"If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said, 'There is nothing in the universe but mathematical points of force'.

"Vibration is fundamental : nothing is exempt from this law. It is universal, therefore applicable to every class of phenomena on the globe. Through the law of vibration every stock in the market moves in its own distinctive sphere of activities, as to intensity, volume and direction; all the essential qualities of its evolution are characterised in its own rate of vibration. Stock, like atoms, are really centres of energy; therefore, they are controlled mathematically. Stocks create their own field of action and power: power to attract and repel, which principle explains why certain stocks at times lead the market and 'turn dead' at other times. Thus, to speculate scientifically it is absolutely necessary to follow natural law. "After years of patient study I have proven to my entire satisfaction, as well as demonstrated to others, that vibration explains every possible phase and condition of the market."

In order to substantiate Mr Gann's claims as to what he has been able to do under his method, we called upon Mr William E. Gilley, an Inspector of Imports, 16 Beaver Street, New York. Mr Gilley is well known in the downtown district. He himself has studied stock*market movements for twenty-five years, during which time he has examined every piece of market literature that has been issued & procurable in Wall Street. It was he who encouraged Mr Gann to study the scientific and mathematical possibilities of the subject. When asked what had been the most impressive of Mr Gann's work and predictions, he replied as follows :

"It is very difficult for me to remember all the predictions and operations of Mr Gann which may be classed as phenomenal, but the following are a few.

"In 1908 when the Union Pacific was 168-1/8, he told me it would not touch 169 before it had a good break. We sold it short all the way down to 152-5/8, covering on the weak spots and putting it out again on the rallies, securing twenty-three points profit out of an eighteen point wave.

"He came to me when United States Steel was selling around 50, and said, 'This steel will run up to 58 but it will not sell at 59. From there it should break 16 points.' We sold it short around 58 with a stop at 59. The highest it went was 58. From there it declined to 41-17 points.

"At another time, wheat was selling at about 89c. He predicted that the May option would sell at $1.35. We bought it and made large profits on the way up. It actually touched $1.35.

"When Union Pacific was 172, he said it would go to 184-7/8 but not an eighth higher until it had a good break. It went to 184-7/8 and came back from there eight or nine times. We sold it short repeatedly, with a stop at 185, and were never caught. It eventually came back to 17.

"Mr Gann's calculations are based on natural law. I have followed his work closely for years. I know that he has a firm grasp of the basic principles which govern stock market movements, and I do not believe any other man can duplicate the idea or his method at the present time.

"Early this year, he figured that the top of the advance would fall on a certain day in August and calculated the prices at which the Dow Jones Averages would then stand. The market culminated on the exact day and within four-tenths of one percent of the figures predicted."

"You and Mr Gann must have cleaned up considerable money on all these operations", was suggested.

"Yes, we have made a great deal of money. He has taken half a million dollars out of the market in the past few years. I once saw him take $130, & in less than one month run it up to over £12,000. He can compound money faster than any man I have ever met."

"One of the most astonishing calculations made by Mr Gann was during last summer [1909] when he predicted that September Wheat would sell at $1.20. This meant that it must touch that figure before the end of the month of September. At twelve o'clock, Chicago time, on September 30th (the last day) the option was selling below $1.08, and it looked as though his prediction would not be fulfilled.

Mr Gann said, 'If it does not touch $1.20 by the close of the market it will prove that there is something wrong with my whole method of calculation. I do not care what the price is now, it must go there.' It is common history that September Wheat surprised the whole country by selling at $1.20 and no higher in the very last hour of trading, closing at that figure."

So much for what Mr Gann has said and done as evidenced by himself & others. Now as to what demonstrations have taken place before our representative :

During the month of October, 1909, in twenty-five market days, Mr Gann made, in the presence of our representative, two hundred and eighty-six transactions in various stocks, on both the long and short side of the market. Two hundred and sixty-four of these transactions resulted in profits ; twenty-two in losses.

The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin. In our presence Mr Gann sold Steel Common at 86, saying that it would not go to 86. The lowest it sold was 86-1/8.

We have seen him give in one day sixteen successive orders in the same stock, eight of which turned out to be at either the top or the bottom eighth of that particular swing. The above we can positively verify.

Such performances as these, coupled with the foregoing, are probably unparalleled in the history of the Street.

James R. Koene has said, "The man who is right six times out of ten will make a fortune." He is a trader who, without any attempt to make a showing, for he did not know the results were to be published, established a record of over ninety-two percent profitable trades.

Mr Gann has refused to disclose his method at any price, but to those scientifically inclined he has unquestionably added to the stock of Wall Street knowledge and pointed out infinite possibilities.

We have requested Mr Gann to figure out for the readers of the Ticker a few of the most striking indications which appear in his calculations. In presenting these we wish it understood that no man, in or out of Wall Street, is infallible.

Mr Gann's figures at present indicate that the trend of the stock market should, barring the usual rallies, be toward the lower prices until March or April 1910. He calculates that May Wheat, which is now selling at $1.02, should not sell below 99c, and should sell at $1.45 next spring. On Cotton, which is now at about 15c level, he estimates that after a good reaction from these prices the commodity should reach 18c in the spring of 1910. He looks for a corner in the March or May option.

Whether these figures prove correct or not will in no way detract from the record which Mr Gann has already established.

Mr Gann was born in Lufkin, Texas, and is thirty-one years of age. He is a gifted mathematician, has an extraordinary memory for figures, and is an expert Tape Reader. Take away his science and he would beat the market on his intuitive tape reading alone.

Endowed as he is with such qualities, we have no hesitation in predicting that, within a comparatively few years, William D. Gann will receive recognition as one of Wall Street's leading operators.

HIS INDICATIONS UNCANNY

2009-10-21T04:57:00.000-07:00

by Arthur Angy (Financial Editor, The North Side News)

W. D. Gann has scored another astounding hit in his 1922 stock forecast issued in December 1921. That forecast called for first top of the bull wave in April, second top in August, and the final top and culmination of the bull market October 8 to 15, and strange as it may seem, the average prices of twenty industrial stocks reached the highest point on October 14 and declined 10 points in thirty days after that date.

Mr. Gann predicted a big decline for the month of November. He said in the 1922 forecast: "November 10-14 panicky break". During this period stocks suffered a severe decline, many falling 10 points or more in four days and on November 14 lowest average prices were made with 1,500,000 shares traded in on the New York Stock Exchange.

I found his 1921 forecast so remarkable that I secured a copy of his 1922 stock forecast in order to prove his claims for myself. And now, at the closing of the current year of 1922, it is but justice to say I am more than amazed by the result of Mr. Gann's remarkable predictions based on pure science and mathematical calculations.

The North Side News stands for a clean Wall Street and has rendered a great public service in helping to rid Wall Street of the bucket shop evil by publishing a series of articles in conjunction with the 'Magazine of Wall Street'. We believe in branding a fake, and we believe in giving credit where due.

GANN NO TIPSTER

Mr. Gann is no "Wall Street tipster" sending out market letters and so-called "inside information". Mr. Gann's results are obtained by profound study of supply and demand, a mathematical chart of money, business and commodities. He determines when certain cycles are due, and the order and the time when market movements will follow.

During the past thirty years many men have proclaimed discoveries and theories to "beat the Wall Street game", most of which resulted in loss to their followers. They could always tell by the chart just why the market did it after it happened. Mr. Gann's theory differs from the others in that he tells months in advance what stocks are going to do.

His forecast stated that some stocks would make high this year in April, some in August and others in October - the month he predicted the bull movement would culminate. Of a list of a hundred stocks; thirty made highest prices in April and many declined, while others continued higher; twenty made high during August, and fifty made high of the year in October, from which the largest decline of the year has taken place.

His 1922 forecast indicated final tops on railroad stocks for August 14. The Dow Jones' averages on rails made high August 21 and reached the samve average levels on September 11 and October 16, but did not exceed the high made in August, which was made seven days later than the exact date called for in the forecast.

HIS CHART A FACT

Such accurate long range forecasting as Mr. Gann is doing sounds almost unbelievable, and how he does it I do not know, but the writer does know that he does it. My attention was first called to his 1921 forecast in which he predicted that stocks would be bottom in August, 1921, and advance to December, 1921. They did so. His chart or graph of the market one year in advance is a fact, and that the course of the stock market follows it astoundingly close is equally a fact.

Mr. Gann says the trouble with most chart makers is that they work with only one factor - space movements or charts that record one to two points up or down - whereas there are three or more factors to be considered: Space, Volume and Time. The most vital is time, and back of that is the cause of recurrence of high or low prices at certain intervals.

I Asked Mr. Gann: "What Is The Cause Behind the Time Factor?"

He smiled and said:
"It has taken me twenty years of exhaustive study to learn the cause that produces effects according to time. That is my secret and too valuable to be spread broadcast. Besides, the public is not yet ready for it".

"Water seeks its level," continued Mr. Gann. "You can force it higher with a pump, but when you stop pumping it requires no force to cause it to return to its former level.

Stocks are the same. They can be forced above their natural level of values to where lambs lase all fear, become charged with hope and buy at the top. Then stocks are permitted to sink to a level where hope gives way to despair and the most rampant bull becomes a bear and sells out with a loss.

Using Contrary Opinion in Trading Markets

2009-10-21T04:55:00.000-07:00

by Jim Wyckoff

I have told my readers that one of the best methods to trade a market is to jump on board when prices "break out" of a congestion or "basing" area on the charts and begin a new trend. I have also stressed to my readers that one of the most risky and least successful trading methods is trying to pick tops and bottoms in markets. Now, I'm going to muddy the waters just a bit and discuss contrary opinion.

Contrary opinion in the trading business is defined as going (trading) against the popular or most widely held opinions in the marketplace. This notion of "going against the grain" of popular market opinion is difficult to undertake, especially when there is a steady drumbeat of fundamental information that seems to corroborate the popular opinion.

To help you understand why contrarian thinking is used successfully by some traders, consider these questions: When is a market most bullish? When is a market most bearish? The answers are: A market is most bullish when the highest daily high on the chart is scored--it's downhill for prices from there. A market is most bearish when the lowest low is reached on the chart, and then the market turns up.

It's no wonder many novice traders lose their assets quickly in the futures trading arena. Traders are most bullish at market tops and most bearish at market bottoms!

Since nobody has discovered the Holy Grail of trading markets, the best traders can do is seek out clues, through chart and technical analysis, and possibly do some contrary thinking.

If you've read books on trading markets, most will tell you to have a trading plan and stick with it throughout the trade. A main reason for this trading tenet is to keep you from being swayed or influenced by the opinions of others while you are in the middle of a trade. Popular opinion is many times not the right opinion when it comes to market direction.

I'll give you an actual example of how contrarian thinking and trading can be successful. The year was 1988, the last big drought year in the Midwest that saw corn and soybean prices skyrocket. It was a Friday in July that saw corn and bean prices trade sharply higher, based on ideas the hot and dry weather would continue in the Corn Belt. Then, after the close, the National Weather Service issued its 6-10 day forecast that, sure enough, called for more hot and dry weather for the Corn Belt. Bulls confidently headed home for the weekend. Even "local" traders on the Chicago Board of Trade floor went home long--something most never do, especially over a weekend.

Well, come Monday morning, the updated weather forecasts had changed a bit, but more importantly, trader psychology had changed immensely. The drought and resulting poor yields had all been factored into the market with prior price gains, culminating with Friday's big push higher. Corn and bean markets traded limit down on Monday and recorded very sharp losses for around three days in a row.

I know of one trader who used contrary opinion thinking and bought put options on corn that Friday that prices were pushing higher. He made a good deal of money that next week. But isn't that top-picking? Yes, technically it is. But this trader used a low-risk trade by purchasing options and employed contrary opinion to score a winning trade. Contrarian trading is not for everyone, but some traders are successful in employing it.

For further reading on using contrary opinion in trading, there is a book called "Contrary Opinion" by R. Earl Hadady. He is the founder of Market Vane's "Bullish Consensus." This is a weekly report that provides traders' degree of bullishness or bearishness in the major markets. Traders use this report to help them gauge when a market is overbought or oversold.

Determining Support & Resistance Levels on Charts

2009-10-21T04:54:00.000-07:00

by Jim Wyckoff

In this educational feature, I'm going to tackle an issue about which several of my readers have inquired: How to determine support and resistance areas on the charts.

My favorite method (and I believe this the most accurate method) of determining support and resistance levels is to look at a bar chart and its past price history and then see at what price levels the highs, lows and closes seem to be touching the most. This method of determining support and resistance levels works on any bar chart timeframe--hourly, daily, weekly or monthly. Many times a bunch of highs or lows will be concentrated in a small price area, but not at one specific price. If that's the case, I will determine that area to be a support or resistance "zone." The one thing I will point out with determining support and resistance zones is that you don't want your zone to be so wide that it's virtually useless from a trading standpoint.

Major price tops and bottoms in markets are also major resistance and support levels. Unfilled price gaps on charts also qualify as very good support and resistance levels. Trendline support and resistance is also very useful to the trader. Projecting these trendlines to determine future support and resistance areas is extremely effective.

It's important to note that when a key support level or zone is penetrated on the downside, that level or zone will likely become key resistance. Likewise, a key resistance level or zone that is penetrated on the upside will then likely become a key support level or zone.

Another way to discover support or resistance areas is by looking at "retracements" of a significant price move--price moves that are counter to an existing price trend. These moves are also called "corrections." For example, let's say a market is in a solid uptrend. That uptrend began at the 100 price level and prices rallied to 200. But then prices backed off to 150, only to then turn around and continue to rally higher. This would be considered a 50% retracement of the move from 100 to 200. The 150 level proved to be solid support. In other words, the 50% retracement level proved to be a solid support level because prices dropped by 50% and then moved back higher. The same holds true for downtrends and "corrections" to the upside.

There are a few retracement percentages that work well at determining support and resistance levels. They are as follows: 33%, 50% and 67%. There are also two other numbers called Fibonacci numbers. (Fibonacci was a mathematician.) Those numbers are 38% and 62%. So, these five numbers are the best at determining retracement support and resistance levels. Most of the better trading software packages have these five percentages calculated in a tool, so that all you have to do, for example, is click your mouse at the beginning of the price trend and then at a high, and the percentage retracements are laid out right on a price chart.

Still another way that support and resistance levels can be identified is through geometric angles from a certain key price point. W.D. Gann, a legendary stock and commodity trader who died in 1955, is the most noted proponent of this method. He also used the same five numbers to calculate his angles. Again, the better trading software will provide "Gann fans" to plot the angles on the charts.

Finally, support and resistance levels for markets can be determined by "psychological" price levels. These are usually round numbers that are very significant in a market. For example, in crude oil, a psychological price level would be $20 per barrel, or $25, or $30. In soybeans, a price of $5.00 or $6.00 or $4.00 would be a psychological level. In cotton, 50 cents would qualify. Silver would be $5.00.

There are other methods traders use to determine support and resistance levels, but those mentioned above are the most popular.

Moving Average Crossovers May Not Be The Best Entry Signals

2009-10-21T04:52:00.000-07:00

by Chuck LeBeau

There are many ways of using moving averages to trade but by far the most common method is to trade when a short-term moving average crosses over a longer term moving average. For example, if the 10-day MA crosses above the 30-day MA we typically assume that we have a new buy signal.

Let's stop for a minute and think about what exactly is occurring at the point of a crossover. When the 10-day MA and the 30-day MA are at the same price, the trend is not nearly as clear as it should be. What we are really observing at the crossover point is that the average of the last 30 prices is exactly the same as the average of the last 10 prices. If we are looking for trends to trade, this equal relationship of the two moving averages is not a reliable or logical indication of a trend. In an upward trending market the average prices over the last 10 days should be much higher than the average of the last 30 days. By implementing new trades at crossover points we are limiting our trading to points that may not clearly reflect what we should be doing. For best results in a trend-following system we want to be trading when the trend is clear and reliable; not when the trend is confused and questionable.

Instead of trading at crossovers we should be implementing our trades when the moving averages are parallel or when the short-term moving average is moving farther away from the longer-term moving average. Perhaps the short term MA should remain a minimum of some units of Average True Range above the longer term MA for several days. I believe that this procedure would give us more reliable and more frequent entry signals in the direction of the prevailing trend, which is exactly what we want. To identify the most reliable trends we want to see the slopes of various moving averages all moving steadily in the same direction and not crossing back and forth.

Take a look at a chart of any market with a strong trend. You will see that the moving averages are not crossing back and forth repeatedly. They will be moving in the same general direction in a more or less parallel fashion. Now look at a chart of a non-trending market. As this market moves sideways the moving averages will be crossing back and forth very frequently. Look at the implications of this simple examination of the charts. If we are trading the crossovers we will be trading most frequently in non-trending markets and trading most infrequently in strongly trending markets. Is that what we want? No, it's obviously not what we want. We want just the opposite. We want frequent entry opportunities in trending markets and we want to avoid as many trades as possible in non-trending markets.

The error in the logic of trading moving average crossovers also extends to some interpretations of MACD (Moving Average Convergence and Divergence) and DMI (Directional Movement Indicator). If we are looking at MACD we want to see both lines (each line reflects a moving average relationship) moving in the same direction. We don't want to see them crossing. When looking at DMI we want to see the Plus DI lines and the Minus DI lines moving in opposite directions and definitely not crossing. Remember, when the Plus DI and the Minus DI lines intersect it is telling us that the market is in balance and has no direction; the amount of upward and downward directional movement are exactly equal. What makes our favorite indicator, the ADX, so effective is that it rises only when the Plus DI and the Minus DI are moving in opposite directions and the distance between the two indicators is widening.

With a little thought and effort I'm sure we can design some reliable entry signals that are based on moving averages but avoid the typical crossover signals. For example we could measure the slope of several moving averages and when all the averages slope upward we would have a buy signal.

We could also measure the distance between several moving averages and implement our trades when the averages are all headed in the same direction but start getting farther apart. This procedure would give us a series of entry signals within the same original trend. This should provide an excellent entry and re-entry strategy.

BENEFITS OF SYSTEMS WITH A HIGH WINNING PERCENTAGE

2009-10-21T04:49:00.000-07:00

By Chuck LeBeau

If you have reviewed the systems that we offer for sale you will find that these systems tend to have a high percentage of winning trades. This is no accident. Although it is not essential for a system to have a high winning percentage in order to make money, there are many advantages for those systems where the frequency of profitable trades exceeds the losers. Here are a few of our observations on this important subject.

Systems with a high winning percentage are much more rewarding psychologically. No one enjoys losing. Everyone enjoys winning. Systems that encounter frequent losers and rely on occasional big winners to make money are not enjoyable to trade. Unfortunately the moral of the trader is not a performance measurement that typically appears on a historical performance summary but perhaps it should be. Strings of losses are demoralizing regardless of your attitude or experience. Strings of profits are always fun and build confidence and self-esteem as well as building your bankroll.We often hear about excellent systems that are abandoned by their operators in spite of a long-term record of profitability. These tend to be trend following type systems with a low winning percentage. It would take the faith and patience of Gandhi to trade some of these systems in spite of their appealing long-term track records. It should not be surprising that most traders fail.
Systems with a high winning percentage are likely to have lower drawdowns. Assuming that the worst case loss on a per trade basis is strictly limited, as it should be, abnormal drawdowns are most likely to be caused by a long string of trades wherein there are very few winners. Large drawdowns are rarely the result of a long string of consecutive losses. Drawdowns are most likely to be caused by the absence of regular profits. Perhaps I am saying the same thing two different ways but I think there is a difference. For example six losses in a row followed by a winner and another six losses in a row is likely to produce a larger drawdown than ten losses in a row. Obviously the higher the winning percentage the less likelihood of stringing together a long series of trades with only occasional winners. Of all the historical performance factors that we can evaluate, the winning percentage is most likely to be predictive of the possibility of large drawdowns. If we can design a system that has a low average loss and a high winning percentage we are looking at a system that should be very drawdown resistant.
Systems with a high winning percentage reinforce discipline. How often have we heard stories of traders who are following a system and after a series of losses decide to skip a trade only to have that skipped trade turn out to be a big winner? This is not the trader's version of an urban legend horror story. It actually happens very frequently. If we are trading a system with a low percentage of winners, it becomes increasingly tempting to start skipping trades. Lets assume we are trading a system that only has 30% winning trades. Since the odds appear to favor our skipping trades we will tend to be rewarded for our lapses in discipline. For a while we will benefit from skipping trades until we inevitably skip the big winner. That is usually when the system is abandoned because, having skipped the winner, we aren't about to jump back in to experience the next string of losses.On the other hand, if our system has a high percentage of winning trades, we shouldn't be tempted to start second-guessing the system. We know up front that if we skip a trade the odds are that we will be skipping a winner. The favorable odds of the system will help us to maintain the necessary discipline to operate the system exactly as it was designed.
Systems with a high winning percentage require less diversification. The typical trend following system is extremely dependent on finding markets where a very large trend will occur. These large trends are relatively rare and to make certain that we are in the right market at the right time we must diversify our trading among many markets because we can't afford to miss one of those big trends. By diversifying as much as possible we are more likely to catch the big trend that makes back all of our losses and rewards us with a profit. However, in spite of what some portfolio strategists would have us believe diversifying a low percentage system actually increases the likelihood of a major drawdown rather than decreasing it.However if we are trading a system with a high winning percentage we have much less need for diversification. And if by careful design our high percentage system is also capable of catching big trends, we have the best possible scenario. After all, there is no logical reason that a system with a high winning percentage can't also have big winning trades now and then. It all depends on the effectiveness of our exit strategy. Of course, diversification will still benefit our high percentage strategy but it will be an optional enhancement rather than a necessity.
Systems with a high winning percentage require less capital to operate. If we need less capital to survive drawdowns and less capital for diversification, it follows that we need less capital to start trading the system. Also, with a high winning percentage we can be more optimistic about starting with less capital and using our profits to build up our capital prior to any major drawdown.
Systems with a high winning percentage are easier to troubleshoot. Imagine a low percentage system where long strings of losses are the norm. How many losses will it take to get your undivided attention and tell you that something is seriously wrong? Too many, I suspect.

Now imagine a system with a very high percentage of winners. Almost any series of losses is going to be out of the ordinary and will quickly attract our attention. Hopefully we will be able to perform a prompt review of the system and correct any faults while we still have some capital left. Unfortunately if we are trading a low percentage system we could run out of capital before we realize that our low percentage system has deteriorated even further.

As you can see we are strong advocates of systems with high winning percentages. In our opinion there is no excuse for designing a system with a low percentage of winners. We contend that it's not really difficult to design a system with a solid winning percentage if you focus on that statistic and make it a requirement. Too often system designers tend to focus entirely on total profitability. Many times this emphasis tends to result in letting profits run too long (curve fitted profit exits) and perhaps using stops that are too close. Both of these preferences will hurt the winning percentage and degrade the system. On the other hand, if we set out to have a high winning percentage we can obtain it without sacrificing much, if anything, in the way of profits and we will create a system that is extremely "user friendly" and reliable.

Long Trades vs. Short Trades

2009-10-21T04:45:00.000-07:00

by Chuck LeBeau
Perhaps because we offer several long-only systems we have often been asked if there is a difference in trading the long side of a market vs. trading the short side. I think most experienced futures traders would quickly agree that there are inherent differences between trading long versus trading short. These differences might be well worth considering when developing the logic for a trading system. Listed below are just a few of the many differences that I have observed over many years of trading. Please keep in mind that these differences are simply my personal observations and not the result of any academic study.

1. Uptrends generally tend to be longer in duration than downtrends. Specifically, many technicians have observed that a typical uptrend seems to last about twice as long as a typical downtrend. We can only theorize about logical explanations of why this might be the case. Perhaps the most significant reason for the persistence of uptrends is that on a long-term historical basis we have been doing the majority of our trading in an inflationary environment. It is true that the rate of inflation has been reduced over recent years thanks to Federal Reserve monetary policies that presume that any inflation is bad but, in spite of the Fed.'s best efforts, inflation still persists. The debate, if any, is merely over the current rate. Even though we now have less inflation rather than more inflation, over any extended period of time it would be a safe bet that prices are likely to be higher rather than lower. There will always be occasional periods of declining prices but the lows will probably be getting steadily higher over the long run.

2. Uptrends generally tend to be more orderly and less volatile than downtrends. We would surmise that this orderliness is because traders are typically more comfortable and optimistic when trading the long side of a market. The public's preference for the long side isn't as illogical as it may seem at first glance. After all, the price of a physical commodity can rise almost infinitely while the price on the down side is obviously limited at something above zero. I can remember stories many years ago about the onion futures market where prices actually appeared to be going to zero. Eventually someone figured out that the price was so cheap that they could take delivery of the onions and then throw them away in order to sell the empty bags at a profit. Short side profits in the physical commodity markets are definitely limited even though they may be very substantial at times. However, because the profits on the long side appear to have unlimited potential, long-side traders are more likely than short-side traders to employ pyramiding strategies that use open profits to fund more buying. Contrary to what most of us were taught in Economics 101; rising prices serve to increase demand and perpetuate the existing uptrend. On the other hand, because short side profits are limited, pyramiding as prices decline would be less attractive.

3. Uptrends tend to end in spikes with high volatility while downtrends tend to end in flat areas with low volatility. Because there is no limit to how far prices can become extended on the upside and the previously mentioned pyramided positions can become very large, there are likely to be huge long liquidations once prices have peaked. On the downside positions are seldom pyramided and the taking of limited profits is done more steadily throughout the decline. As a result there are rarely huge positions remaining to be liquidated as the market reaches bottom. Bull markets tend to attract traders and the liquidity increases as the prices rise. On the down side the low prices and lack of volatility tend to make traders look for rising markets with more opportunity and more liquidity.

Keep in mind that these are very general observations relating specifically to physical (non-financial) futures markets and the same logic does not necessarily apply to securities or financial markets. For example if you go long in Yen futures you are also short dollars and if you go long in Eurodollar interest rates you know that if they go up to 100 it means that interest rates are at zero. However many financial markets, like the stock indexes, do have an obvious upside bias.

Once we have a general idea of some of the basic difference between rising and falling markets we need to use that knowledge to improve the design of our trading systems. Here are a few of the accommodations to market direction that purchasers of our systems may have observed.

1. We sometimes design systems that trade only from the long side. Because we are using a multiple systems approach we don't need every system to trade in both directions. The long side is usually easier and more profitable. In fact, who says the short side is necessary at all? As long as our long-only system stays out of trouble when prices are declining (easily done) we can wait for the uptrends. There are plenty of markets to trade; why not trade the easy ones.

2. When designing a system that trades in both directions we sometimes make our long-side entries easier to trigger which results in more long trades than shorts. We are intentionally building in a long side bias. Many traders will not agree with this built-in bias but we think it makes sense because we have many good reasons to prefer the long side.

3. When designing exit strategies in a system that trades in both directions we often let profits run further on the long side. Since we expect the short side profits to be limited we are quicker to take a profit once our short position has adequately rewarded us for the risk we took. On the long side we prefer to try and let the profits run. Systems do not have to be symmetrical (same parameters long and short) and it can be logical to have different rules and parameters for the short side.

4. There may be price levels where it does not make sense to go short. For example, sugar has traded as high as 63 cents per pound and as low as about 1.5 cents per pound. Would we really want to go short at 2 cents per pound? The risk is obviously much greater than the potential reward. Minimum price levels for shorting can easily be built into any system.

In addition to the technical observations we have passed along there are also fundamental (supply/demand) considerations that influence the trading characteristics of longs and shorts. Perhaps we will discuss these fundamental issues in another Bulletin.

In summary we think there is a good case for treating the long side of markets differently than the short side. Entries and exits do not have to be symmetrical and we do not have to trade both long and short. I obviously favor the long side but I know traders who specialize in trading only the short side because they believe the moves on the downside produced quicker profits. Although these traders disagree on which side is best, they agree that the characteristics are different.

Moving Average Crossovers May Not Be The Best Entry Signals

2009-10-21T04:44:00.000-07:00

by Chuck LeBeau
There are many ways of using moving averages to trade but by far the most common method is to trade when a short-term moving average crosses over a longer term moving average. For example, if the 10-day MA crosses above the 30-day MA we typically assume that we have a new buy signal.

THE ESSENTIALS OF WINNING PSYCHOLOGY

2009-10-21T04:42:00.000-07:00

By Ray Barros
It is my belief that successful trading is a function of:

A written trading plan with an edge
Effective Money Management and
Winning Psychology

In this essay I shall:

Identify the essential element of winning psychology.
Identify the personal attributes required.
Show the belief structure necessary to achieve and maintain essential element.
Identify the blocks to winning psychology, and
Mention some tools I found useful in this context.

There are two concepts I should like to explore before beginning the article. The first has to do with the way I believe humans acquire knowledge.

There is an objective reality which humans perceive through the filters of their values, beliefs and rules. This perception can and usually distorts our sense of reality. The extent to which we reduce or eliminate the distortion is the extent to which we will be successful in life. This is especially true for traders.

The second idea I want to introduce is that of the evolution of a trader. For me the natural progression is:

The Rule Based Trader: "There is one rule: never break your rules"
The Subjective Trader: "There are two rules:
The first is never break your rules.
The second is know when to break the first".
The Intuitive Trader:"There are no rules. Whatever my intuition tells me is the right action on this trade is the correct action in the circumstances.

This belief accords with reality more often than not".

All types of traders can make money as long as they conform to the rules of that stage. e.g. a trader at the Rule Based Stage is more than likely to lose money in the long run if he breaks his rules. Finally, before I begin I should like to briefly explore what I consider the necessary empowering motivation to succeed.

Trading is success is simple to achieve but not easy. It is simple because the roadmap for success has been clearly laid out in all the three areas - written trading plan etc; it is not easy because following that roadmap is not easy.

What motivation is necessary to get us through the rough patches?

At some level we traders are attracted to this game because of the money we can earn. But, I have found that money alone is an insufficient motive. All good traders I know LOVE the game for itself. The fact that we get paid for it is merely a bonus. This love for the game is incorporated into the vision we want to achieve as a result of our trading and that vision is the zing that gets us through the rough patches. It goes without saying that for successful traders, trading is fun.

I. The Essential Element of Winning Psychology

At its core, winning psychology has as its base the "acceptance of the outcome of a trade".

By acceptance I mean the ability of being aware of an emotion without "buying into" its content; some may call this 'mindfulness'. e.g.

Contrast:

Imagine you have just entered a trade and the very next bar is a big range bar against your position:

"My God here I go again! Can't I do anything right! What will my wife say if I take yet another losing trade!

Maybe I should move my stop? No I can't do that - the last time it cost me my bank! But what about the other day when I got stopped out only to have it go my way? This is just too hard!!!!" etc, etc. With:

Imagine you have just entered a trade and the very next bar is a big range bar against your position:

"The market is approaching my stop. I feel uncomfortable with the price action and I can live with the discomfort".

The first trader may think he has accepted the outcome but in fact he has failed to do so at the emotional level; the second trader has accepted the outcome at all levels.

This idea of acceptance applies not only to loses but to profits as well. The trader that "accepts" an outcome realizes that on an individual trade basis a positive outcome on one trade does not translate into a future of unlimited profits.

At its core "acceptance" realizes that trading is based on probabilities, as such every trade is unique. In other words, the past does not equal the future. More on this in the section dealing with beliefs.

II. Identify the Personal Attributes Required

If we are to acquire "Acceptance", then certain personal attributes are essential:

Awareness - the ability to step outside ourselves and observe. The more effectively we can do this, the easier our progress to "Acceptance".
Honesty - the ability to seek to perceive reality in spite of our filters.
Courage - the willingness to bear the pain brought about by our awareness and honesty.
Commitment - the willingness to do whatever is necessary to achieve our goals.

In the words of Chin-Ning Chu author of "Thick Face, Black Heart":

"Even though most people think they are trying to succeed, they are simply going through the motions. The last thing in the world they want is to get off the familiar treadmill and actually get somewhere".

We cannot succeed in our journey to "Acceptance" unless we acquire these attributes. To the extent that we have them is the extent to which we will experience fulfillment.

III. The Belief Structure Necessary to Achieve and Maintain "Acceptance"

Ultimately to succeed, we, as traders, need to adopt two apparently contradictory beliefs:

"That the market is uncertain and unpredictable and that the market is relatively certain and predictable". The resolution of this apparent conflict is found in the timeframes that we hold the beliefs. At the trade-by-trade level, what Mark Douglas, calls the micro level, we hold the first belief. Because the market can and will probably do anything, we seek first to protect our capital in the execution of our trading plan. In other words, we must always have an exit strategy.

At the level of a "large sample size" (the macro level), we hold the second belief. To the extent our trading plan has an edge, will be the extent to which the market will be predictable and certain. In short we accept that with trading we are dealing with probabilities and not certainties. It is of imperative importance we hold these beliefs not only at an intellectual level but also at every level of our being - especially the emotional level.

As a trading coach I have seen, time and again, lip service acceptance to the idea of probability; but when it comes to actually trading, the traders behave as if each and every trade must be a winner - they have a need for certainty. How else can we explain the popularity of services advertising 90% hit rates? If the ads were not drawing an adequate response, they would disappear.

Probability thinking leads to a host of other states and beliefs:

Because we know that we will succeed in the long run and because we know we will protect ourselves no matter what the market does, we acquire the state of "self trust" and the state of being "carefree". In turn these states allow us to remain....
Focused, confident and carefree when we are experiencing the inevitable prolonged drawdown.
Because at the micro level we know that the market is random, we will not allow euphoria to set in and lead us to reckless trades. Each trade will only be one in a series of probabilities.
We will view market information not as a source of pleasure/pain but merely as data providing us with opportunities.

This is not to say trading should not be fun; indeed not only should it be but for most traders it MUST be. However, the fun comes from the flawless execution of the rules appropriate to our stage of evolution and not from trade by trade results.

IV. Identify the Blocks to Winning Psychology

The main enemy to "Acceptance" is Fear.

The universal fears are:

The fear of being abandoned and
The fear of losing control.

If we reflect for a moment, we'll see how the fear of being abandoned comes about. As young children, we are totally dependent on our parents. Very quickly we come to realize that if they ever abandon us, we shall be unable to care for ourselves. Most of us fail to confront this fear as we grow into adulthood. As a result we automatically deal with it by attempting to control our environment - the people, conditions and events that surround us.

This tendency to control may or may not be appropriate in other areas of life but as a strategy for trading the markets it is a bust. Most of us are incapable of influencing the market even for the shortest moment, let alone control it.

Mark Douglas's four fears are but an outgrowth of the two universal fears:

Fear of loss
Fear of being wrong
Fear of missing out
Fear of leaving money on the table.

These may be more familiar to the trader.

I first gained an insight into effects of fear some years ago. At that time, I was trading futures through Jackson Futures. The company provided a trading room and I met a quiet chap. He came in a few minutes after the US Bonds opened and left just after the close. Given that trading opened (Aussie time) 12:30 am and closed 5:00 am, this was no mean effort. One morning I noticed he looked very distressed and I struck up a conversation with him. He told me he had bet the farm shorting a strong bull market. As his red- rimmed eyes stared off in the distance he said:

"I don't know why I just didn't cut the position earlier; anyone would have seen the strength - why didn't I?

I never saw him again.

That is the effect of fear - it drives out knowledge; it leads to myopia; it immobilizes us and leads to inaction.

The mirror image of fear is euphoria - the feeling that we can do no wrong. As much as fear, euphoria will ultimately lead to trading failure. Since trading is a game of probabilities, we will experience times when we can do no wrong. But these times will come to an end. The trader caught in the euphoric trance will not recognize this and taking one risk too many will eventually get caught in a heavy loss. If he is lucky, the loss will not be a catastrophic loss.

Fear and Euphoria can catch not only newbies but also the most experienced and successful trader. Witness the demise of (Trader) Vic Sperandeo. Vic started trading public funds in 1972 and for over 25 years had a very successful career. His view on trading can best be summarized by the passage below:

"I'm a market professional....and I am very good at what I do.... I never gamble more than I can afford to lose.... I think my unique strength is in my consistency.. I pride myself in my ability to successfully stay in the game..." (Trader Vic - Methods of a Wall Street Master page ix)

This year Vic went bankrupt as a result of one trade.

Euphoria or Fear?

It doesn't matter. Whatever the reason, Vic lost a reputed US$50 million and is now out of the game. Two other factors impact on our fear or euphoria:

* Our expectations. Rather than accept market information in its pure form, we impose our expectations. In turn these expectations impact on our fear and/or euphoria.

* Our own psychosis. Each of us grows into adulthood with our psychosis - what Stephen Wolinsky calls "trances". Thus many times our responses to market information are not a response to present information but to past events. In other words, we are not trading in the NOW or with PRESENT TENSE INFORMATION.

V. Some Tools I Have Found Useful

To achieve "Acceptance", we need to manage "Fear and Euphoria". For me the decisive tool was learning strategies to be aware, acknowledge, and manage the twin emotions of fear and euphoria. This meant starting with small pains and slowly becoming comfortable with my feelings. When I first started trading successfully, I used discipline as my main weapon. But when I started fund management in 1991, I found it inadequate. Dr George Lianos helped me discover the way of managing emotions - not eliminating, MANAGING. George taught me that a step-by-step approach was the best way for me. Learning to manage small fears, I slowly learnt to handle FEAR and EUPHORIA in my trading. I have developed a process based on the works of S. Wolinsky (Tao of Chaos) and C. Andreas (Core Transformation).

Other tools I have found useful are:

Meditation and/or mindfulness. These techniques taught me how to remain unruffled and centered during the hurly-burly of real-time trading. More thanany other tool I use, they teach me that AWARENESS is everything. They re long-term tools.
The ideas and distinctions of Mark Douglas. Another long-term technique.
Neuro Linguistic (NLP) techniques. Useful for absorbing pain. A medium term technique.
Breathe work and Posture. Learning to breathe, stand and/or sit properly are effective short-term tools to remain calm in periods of stress.

VI. SUMMARY

To succeed a trader must have a vision about where he is heading and must internalise that Winning Psychology rests on Acceptance of the trading outcome. This means managing Fear and Euphoria. To do this, we need to ACCEPT, with every fibre of our body the belief that at the micro level the market is uncertain and unpredictable and at the macro level is relatively certain and predictable.

This article was reprinted with permission from the author. More articles and information on Mr. Barros can be found at adest.com.au.

What is a Blog? In Plain English Please.

2009-10-21T04:26:00.000-07:00

by Vickie J Scanlon

If you are fairly new to the Internet, you have probably heard the word “Blog” flying around. But what is a blog? How does it work? And how can I use it on my website? These are all good questions, which I hope to answer for you.

What is a Blog?

A blog, in simplest terms, is a daily journal of your thoughts that is maintained by a blogger (which would be you) on the web. When posting to a blog you will notice that it is arranged in chronological order – with the most recent additions on top.

You can choose to allow your readers to add their own comments/feedback to any issues you may have addressed on your blog. Or, you can add audio to your blog. Pretty neat, isn’t it. What a great way to have contact with your customers.

Can it be used on my website?

Can it be used on my website? Definitely. It can be a great tool for you and your contacts. However, I personally feel that it would be a greater benefit to the established website that has a following. In other words, start with a newsletter first, to build your mailing list, than go for the blog.

If you have a following, than go for it. Don’t want to pay for it? That’s okay, you can go to www.blogger.com, they have a great tutorial and the blog is free.

What can it do for my website?

I see many inventive uses for a website that is based on content. Such as:

1.Strong communication tool – a form of contact with your customer.
2.Allow you to get to know your customers and their wants, as well as, allowing your customers to know you.
3.Can provide daily, quality content – which will pull the search engines and thus, increase your traffic.
4.Use it to advertise your links. Taking a conservative approach, and blend it in to the topic.
5.Use it to answer inquiries that people may have.
6.Use it to inform.

As you can see, the list can be endless. But I do see only one slight drawback for those who do not want to keep a constant vigil over their website – and that is maintaining the blog. The blog should be maintained on a regular basis. Why? People get bored, and on the Internet, it’s very easy to click their boredom away. Thus, keep yourself enlightened and it should keep them enlightened.

If you find this small drawback inconsequential – then go blogging.

To your success.

Vickie J. Scanlon

====================
Vickie J Scanlon has a BBA degree in Administrative Management and
Marketing. She left the corporate world as an Reports Programmer,
to begin her journey as an Internet marketer. Visit her site at:
http://www.myaffiliateplace.biz for free tools, articles, ebooks, and how to info.

About the Author

Vickie J Scanlon has a BBA degree in Administrative Management and
Marketing. She left the corporate world as an Reports Programmer,
to begin her journey as an Internet marketer. Visit her site at:
http://www.myaffiliateplace.biz for free tools, articles, ebooks, and how to info.

How To Build Traffic To Your Blog

2009-10-21T04:25:00.000-07:00

by Priya Shah

With the growing interest in blogging as a means of online promotion and branding, a lot of marketers are starting blogs to promote their opinions, products, books and services.

But a blog is like a website. "Write and they will come" isn't exactly a magic formula to bring in traffic by the boatload.

If you need to promote your website in order to build traffic to it, you need to promote your blog as well.

Here are some ways you can become a well-read and influential blogger.

1. Write Posts That People Will Want To Read

This should be common sense, but many marketers tend to forget that their readers are real people and that you need to use the principles of online copywriting to make your headlines and copy interesting to your readers.

If you write posts that people enjoy reading, they will reward you by returning to your blog regularly.

Make your posts conversational, pithy and topical. Keep them short and stick to one topic per post.

Write often and regularly so that both readers and search engines visit your blog more often.

2. Optimize Your Posts for Search Engines

I cover this topic in detail in my article on "Search Engine Optimization For Blogs" http://www.blog-maniac.com/blog-seo.htm

But here are the most important rules to follow to get your posts listed for keywords of your choice.

* Make sure your blog URL contains the primary keyword you want to optimize for

* Use your primary keywords in the title of your post

* Use your secondary keywords in the body of your post

* Use your keywords in the anchor text of links in the body of your posts

3. Submit Your Blog and RSS Feed To Directories

If you publish a blog you should submit your blog and RSS feed to big directories like Yahoo and Dmoz, as well as the numerous blog directories and search engines.

Here is the best list I've found of places to submit your feed or blog, compiled by Luigi Canali De Rossi, who writes under the pseudonym Robin Good.

Best Blog Directory And RSS Submission Sites
http://www.masternewmedia.org/rss/top55/

Another list of sites to submit your Blog.
http://www.rss-specifications.com/rss-submission.htm

4. Ping The Blog Services

There are a number of services designed specifically for tracking and connecting blogs. By sending a small ping to each service you let them know you've updated your blog so they can come check you out.

Bookmark the Ping-O-Matic ping results page so you can visit it and quickly ping a number of services with a single click.

http://pingomatic.com

5. Build Links To Your Blog

I recommend the methods here as the best ways to get links pointing to your blog

* Link to your blog from each page on your main website

* Trackback to other blogs in your posts

* Post legitimate comments on other blogs with related topics

* Offer to exchange links with other similarly themed blogs and websites

6. Edit Your Blog Posts Into Articles

One of the best methods for promoting your website is to write articles and submit them to article directories.

The suggestion for extending this to edit your blog posts into articles and submit them to directories came from the coach at "Explode Blog Traffic" who also has other noteworthy suggestions at his blog here.
http://bloghit.blogspot.com/2004/11/how-to-explode-blog-traffic.html

You'll find an extensive list of article directories here
http://ebizwhiz-publishing.com/write-articles/submit-articles.htm

7. Create Buzz About Your Blog

Creating a buzz about your blog posts and topic in the local and online media will give your marketing a viral component.

* Create a controversy around your blog or it's topic.

* Distribute bumper stickers or other merchandise with your blog's URL and tagline.

* Write a press release about something newsworthy and tie it in with your blog topic.

8. Capture Subscribers By Email

It may seem strange for a blogger to send out updates by email, but email is still the #1 choice of most people who want to receive news and information.

Using a free service like Bloglet to manage your subscriptions is easy and it allows your subscribers to manage all their subscriptions from one interface. http://www.bloglet.com

However, if you want more control over your list and don't mind mailing out the updates yourself, you can use an autoresponder system to capture and follow-up with subscribers.

RSS responder is a new script that allows you to keep in touch and follow-up with your subscribers without the hassle of email. http://ebizwhiz-publishing.com/rssresponder.htm

These tips should give you a good start to building your blog traffic.

About the Author

Priya Shah publishes an internet marketing ezine at http://ebizwhiz-publishing.com by day and doubles as a Blog Maniac by nighO http://www.blog-maniac.com Blog Brandz http://www.blogbrandz.com is the legitimate offspring of her affair with the blogosphere.

Promote Affiliate Programs Through Your Own Google Adwords Campaign

2009-10-21T04:24:00.000-07:00

by Maxine Hough

Did you know that Forbes magazine has reported that pay per click ad sales are expected to increase to at least an astounding $8 billion by the year 2008? Pay per click though still unfamiliar to many, will be around for a very long time. One of the search engine giants to capture a lion's share of this market is Google through its Google Adwords service. A few ebooks like Google Cash and The Definitive Guide To Google AdWords provide basic and advance knowledge on releasing the incredible power of pay per click campaigns especially as this applies to businesses and affiliates around the world. Big businesses are still the largest group to benefit from incorporating pay per click in their advertising budgets but, home-based businesses and affiliate program promoters can benefit too if they understand how to use this tool.

Pay per click search engines provide a way for you to basically buy your way to the top of search results for any keyword you wish. Pay per click advertising works thru a bidding process, and your ads appear in the results pages of search engines such as Google, Yahoo, Ask Jeeves. With Google Adwords you bid on the keywords you want to focus your ad on. For example if someone were searching on "gourmet coffee", if you're the highest bidder for "gourmet coffee" you receive top placement for that phrase and depending on the search engine, the top 3-5 bidders for that phrase also receive placement on the first page of unpaid search results.

With Google Adwords the "ad campaign" is everything. When you sign up with Google Adwords you have unlimited campaigns at your disposal. I enjoy promoting affiliate programs and in the past I spent a lot of time deciding which keywords I would bid on to attract buyers to my affiliate programs. The only tool I use right now is Ad Word Analyzer which saves tremendously on time and gives me an overview of my keyword and/or keyword phrase as it was searched on the top two pay per click search engines Google and Overture.

Now that you've done your research and you've collected your keywords and/or keyword phrases, you'll need to open an Adwords account.

1. To do this go to https://adwords.google.com/. There is a one time sign up fee of $5 and your username and password are emailed to you.

2. Now you can log into the system and select "create a new campaign". Give your campaign a name that will also allow you to create multiple campaigns.

3. Before creating your first ad, I recommend that you print out Google's set of guidelines, ebooks such as Google Cash cover this area as well. Since most of you are probably promoting affiliate programs, it's important that you notify Google of this by simply adding "aff" at the end of your ad text.

A few tips to keep in mind:

a. To keep your ad targeted, make sure your keyword or keyword phrase is in the headline.

b. Put your keyword or keyword phrase in the text of your ad.

c. In promoting your affiliate program, make sure you're linked directly to the owner's website thru your affiliate link so that you'll get the credit and the cash!

Now you can submit your ad and start tracking your campaign over the next few days. If you're not happy with your ad's performance you can make changes such as targeting other keywords or increasing your bid a little at a time. Adwords is flexible in allowing you to make changes within Google guidelines of course, to make your ad campaigns successful.

Pay per click is here to stay and it offers a high level of assurance that your ad is reaching your targeted audience. With the proper management and a clear vision, pay per click specifically Google Adwords, can provide you with well targeted and economical advertising on the internet.

As mentioned earlier pay per click ad sales are expected to increase to at least $8 billion by 2008, with Google Adwords, the right resources and a little effort on your part, you can also benefit from this increase and find yourself with a significant supplemental income each month or a fulltime "leave my 9-5 job" income. The sky is truly the limit with pay per click.

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Maxine Hough is an accounting clerk who supplements her income by promoting affiliate programs online based on the techniques outlined in Google Cash at http://tinyurl.com/6z3zt, The Definitive Guide to Google AdWords at http://tinyurl.com/6exm4, Ad Word Analyzer at http://tinyurl.com/4mrto

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About the Author

Maxine Hough is an accounting clerk who supplements her income by promoting affiliate programs she has personal knowledge of and believes would be beneficial to others promoting any kind of internet enterprise.

How To Find The Top Keywords Relating To Your Theme

2009-10-21T04:22:00.001-07:00

by Jeff Schuman

Have you ever wondered what people are searching for online?
More specifically have you ever wondered what people are
searching for as it relates to the theme of your website?

Let's say you have a website built around the theme of music
downloads. Here are 2 easy ways to get a list of keywords you
can use to build your home page and then build more pages around
each specific word.

1. Do a search by typing in music downloads here:
http://www.pixelfast.com/overture

As of November 2004 the keyword phrase" music downloads was
searched 1,068,310 times. We can also see that "free music
downloads" was searched 1,169,992 times.

As you look down the list you will find all kinds of
combinations of keyword phrases with the words "music
downloads" included in them.

You can build specifc web pages centered around each keyword
phrase. You will find that lesser searched keywords have less
competition and therefore will be easier for you to make it to
the top of a search engine and generate free traffic.

For example the keyword phrase " free mp3 music download" was
searched 22,360 times. This would be a great keyword phrase to
target in comparison to the more generic phrase "music
downloads."

2. Take a look at what people are willing to pay for
a keyword here:

http://www.team-schuman.com/7searchkeywordtool

When typing in "music download" it brings up the keyword, number
of searches, and the top 5 bids. It also brings up a complete
list of possible keyword phrases and what people are paying for
them. You can use this information to find affiliate products
relating to each specific keyword phrase and then build
additional web pages relating to each specific one. You can add
these keywords to your home page and then join 7Search as an
affiliate and add pay per click text to your pages.

Then get paid by 7Search when someone clicks on an ad relating to
that keyword. I do this to generate hundreds and thousands of
dollars each month. It is a great way to make some money on your
site for generating traffic to it. Here are examples on 2 of my
websites. You will see the text ads for the Top 10 websites at
the top of each page.

http://www.team-schuman.com

http://www.sites-plus.com

If you are looking for top keywords being searched in a broad
range of categories then subscribe to the "Keyword Report" here:
http://www.team-schuman.com/wordtracker

Click on the link for Keyword Report and you will receive the top
500 keywords people are searching for delivered to you by email
every week. Then use the Overture and 7Search keyword tools to
find more specific keywords you can build websites and web pages
around. This is a great strategy and a great way to get started
making money with your own theme website and web pages around
that theme.

Remember this simple point. People go to the internet to find
information. They will type in all kinds of keyword phrases and
variations of those keywords. The more web pages you can build
targeting those specific keywords the better off you will be when
it comes to increasing your website traffic and making more money
online.

About the Author

Jeff Schuman is using this strategy to create new websites
around specific keywords relating to a theme. You can see his
Top 10 Make Money and Top 10 Small Business Websites here:
http://www.team-schuman.com
http://www.sites-plus.com

How to Drive Traffic to Your Website with Traffic Exchanges

2009-10-21T04:21:00.002-07:00

by Geoffrey Faivre-Malloy

The number one problem new website owners have is, "How do I drive targeted traffic to my website?"

A significant amount of time and energy is spent on this single task. A webmaster will commonly focus on:

Ranking well in the search engines
Pay Per Click (PPC) programs.
Pay Per View (Banner) programs.
Link Exchanges
Directory Submissions
etc.

All of these methods are viable means of getting traffic. In fact, if you're lucky or competent enough to rank well for your keywords in the search engines, you'll find that you get a very large portion of traffic to your website.

What do you do, however, if you rank poorly or, even worse, don't even show up in the first 1000 results on any of the search engines? What do you do if you don't have a budget set aside for marketing?

This is where people often turn to traffic exchanges. Quite simply, a traffic exchange is a program where you sign up and agree to surf sites in exchange for some credits. These credits are then used when other members of the exchange surf to your site.

Now, I'll be quite honest with you, this traffic is not highly targeted traffic. In fact, if this were your only method of advertising your website, you'd probably fail. BUT it is a great method of getting traffic to your site in addition to the other methods listed above.

So, why do people use traffic exchanges? Here are a few of the benefits:

Increase your Alexa rating! Did you know that some search engines factor your Alexa rating into their algorithms? More traffic means higher search engine placement!
Increase your branding awareness. Any marketing expert worth his salt will tell you that branding is extremely important to stand out amongst the billions of websites out there.
More traffic equals more sales. A percentage of people surfing will be enticed by your ads and click on them to find out more information.
Another source of revenue. Many traffic exchanges will actually pay you money to surf. More importantly, as you refer other people to the network, you'll earn a percentage of the money that they earn! It may be small amounts but if you work the system it could amount to a lot of money.

Now, before you head over to Google and search for Traffic Exchange, I'd recommend knowing a few facts:

Some traffic exchanges are simply out to get money from you and will refer very little traffic to you.
Some traffic exchanges have poor systems in place to stop cheaters from running programs to increase their credits faster.
Finally, some traffic exchanges will allow popups, activex controls, site rotators, etc. in their network. Any of these can stop your autosurfing from working, or even worse, allow your computer to be infected with a virus.

The best part about Traffic Exchanges is that you really have nothing to lose and everything to gain. The worst thing that could happen to you is you get a little bit of traffic which increases your Alexa rankings and you don't get any money.

Of course, for the system to work, you've got to make sure that you do some surfing yourself. The makers of the exchange programs realize this and some of them even have an autosurf feature where you get a reduced number of credits while your browser happily loads page after page every 10 seconds or so.

About the Author

Geoffrey Faivre-Malloy is a published author, speaker and owner of Make Money at Home Based Business Opportunities, one of the most popular home based business sites on the internet. His favorite traffic exchange is the InfoWizards Traffic Exchange.

Turn Words Into Traffic!

2009-10-21T04:21:00.000-07:00

by Dawn Roberts

Rather than searching for the newest, easiest and "best" way to get thousands of visitors to your website, why don't you try something that has proven successful and doesn't cost you anything but your own time and effort?

If you want to be successful online, there's only one magic thing you need. And that is great content!

The biggest online commodity is information. Regardless of anything you may have been told or want to believe, I assure you that people are not getting online to buy from you or click on your Google Adwords. They are searching for information, period!

Keeping these golden rules in mind, submitting informative articles to gain more website traffic while expanding your client or customer base only makes sense! You'd be crazy not to do it.

And I know some of you are saying, "But I can't write" If you can speak, you can write. That's really one of the biggest tricks there is to writing. Write like you're speaking to someone.

However, here are some additional resources to help you with your writing:

The Netwriting Masters Course - this is 100% FREE! I promise you that if you follow the course as it's laid out, you will learn to write better! Download it now and get started on it right away. You may even find, as I did, that you love writing!
Make Your Words Sell - Even better than the Netwriting Masters Course, MYWS is one of the best ways to learn how to write not only for the net. It will teach you how to write copy for anything. I cannot recommend MYWS enough. If you're doing business on the net - you NEED this book!
How to Write and Publish Your Own e-Book - Learn How to write and publish your own OUTRAGEOUSLY Profitable eBook in as little as 7 days... even if you can’t write, can’t type, and failed high school English class! Get "Bragging Rights" in less than a week!

Personally, I recommend all three of the above resources. I've read them all front to back many times over and keep them handy as reference tools all the time! If you implement the advice and instructions they offer, you will make your money back many times over!

Now that you have the "How To" resources, I'll give you the "Where" resources. Keep in mind, this is a very short list. Use the search engines to help you find even more places to submit your articles. There are virtually thousands of websites, e-zines and newsletters waiting for your article!

Always remember to read the submission guidelines for all sites. I can't stress enough just how important that is!

And by all means, don't forget to add your byline to all of your articles! For an example, look at my byline below this entry.

You will increase your traffic dramatically if you write some well-written, informative articles! Give it a try - what have you got to lose?

About the Author

The author, Dawn Roberts, is the creator of www.Ideas-For-Home-Businesses.com - your complete home business resource. IFHB will help you from the planning stage, straight through to marketing your ideas for home businesses! Learn how you

Do you have the mindset of a successful business man ?

2009-10-21T04:20:00.001-07:00

by Michel Richer

Have you always dream of owning your own Business and working in the comfort of your own home ?

As human we all want to succeed. We all want the best from life. We all want to be wealthy, to have a great house, to travel around the globe. A great wife and beautiful and healthy kids.

To have all of this you don't need to be a genius, have luck or to rob a bank.

All you need is that you use the power of faith wich means confidence. Confidence in yourself.

You also need knowledge. Like the adage: "Knowledge is Power". But you must ACT. Knowledge without action is useless. It's like having a recipe of a cake, without actually making the cake.

So to succeed you need to know what you want and after that act on it.

HOW TO SUCCEED

The first ultimate start to succeed with your home business is to write your goals and have a business plan.

Don't wait for everything to be exactly right to start...THERE WILL NEVER BE A "PERFECT" TIME! Start now, with whatever you have. The things you need will come to you as you work toward your goal.

Let's talk face to face there is no easy way to succeed with your home business. Talk to people who succeed in business like George Walton of wal-mart or other like Donald Trump. They will tell you that it takes lot's of vision and determination. You have to be a man of action to really succeed.

Like i said there is no easy road. But of course you can succeed like me. You have to be persistant.

You have to build your business brick by brick. One step at a time. You start at the base of the ladder first.

Everyone who as succeeded in life have start at the base. Thats a fact of life. Like the man you are today, start as a baby.

Even the most dynamic, highest-earning entrepreneurs in the industry took MONTHS to begin seeing an income of any real significance.

And the real wealth, the $100,000+ income we all strive for, took an average of almost 3 YEARS to achieve!

Do you think ANY of these gentlemen don’t think the ends justified the means?

Do you think for an instant that the months and years invested hasn’t been rewarded a thousand times at least? You don't even have to think about it, do you?

So now you know ! It takes an average of 3 YEARS to build a significant income on the internet.

ONE STEP AT A TIME

Every house is build brick by brick. So is your home business !

Of course we all want to go faster. But we have to start at the base first. It's a basic law. We are subject to time and circumstances.

We have to learn. We have to experiment. With learning and experimenting we get experience. And with experience we become an expert.

We have to set goals. The goals will guide us one step at a time. It will will pave the way to our success.

You cannot go on a road trip without knowing your destination. You need a map. You need time. You need to rest. You need to eat. And sometimes there is roadblock.

When we hit a dead end we turn back and take another road. But we keep going to our destination.

It's the same thing with your home business. There is bumps and jumps and sometimes we crash. But we always keep our eyes to the goal. That is what give us the drive. It's our paradise. The goal become our existence. And it is.

By never, never giving up you will reach your goal one day. One mile at a time. It's impossible that you won't reach it. Unless you die.

That's the only secrets to success. One client at a time. One step at a time. 100 client at a time. Until you reach thousand like me and make your $100,000 a year and +.

To make $100,000 a year, start by making $100 per month. After $200 a month. And after $500 a month. And after $5000. And so on and so on.

Day by day, your on your way to succeed, week by week your on your way to succeed, month after month your on you way to succeed, year after year your on your way to succeed.

Until you reach your goal in 3 YEARS. (Maybe less, Maybe More.)

We reap what we sow, but the harvest is never in the same season as the planting! Today you are planting...and will be at least for the next several months.

Your harvest will come in time. Be persistent. Be patient. Think long term. Take action every day, (no matter how small) to build your business and you cannot fail.

MY 11 SECRETS TO SUCCEED WITH YOUR HOME BUSINESS

1. Your first ultimate start must include written goals and plans. Formulate a plan of weekly activity and be persistent in following it—if you fail to plan, you plan to fail. Sticking to your plan is essential for success.

2.Don't wait for everything to be exactly right to start...THERE WILL NEVER BE A "PERFECT" TIME! Start now, with whatever you have.

The things you need will come to you as you work toward your goal. You cannot become successful in anything when you're trying to do too many things at once.

3. Treat your business as a serious, full-time business, and it will become one. Think of your first six months primarily as a training period. Don't expect large earnings until after you've educated yourself.

4. Be patient. You'll work the hardest your first six months or so and get compensated the least. Big incomes never happen overnight.

They only come after you've properly shown your affiliates how to duplicate your efforts. Always be ENTHUSIASTIC!! Don't give yourself unrealistic expectations.

5. Don't complain to your upline leaders. Realize that what you accomplish is mainly in your hands, no one else's.

Also realize that, when you see a problem, 95% of the time there are factors you are unaware of. Don't jump to conclusions. When you have a problem, present it in a concise letter as positive, constructive criticism. Offer solutions if possible, too.

Not only will this approach get you better results, but you'll be building your relationship with your upline instead of tearing it down.

6. Be organized, but don't allow the act of organizing keep you from the most important element of a successful business: MARKETING.

Market and promote your business EVERY DAY! Don't let little problems upset you. Concentrate on the many positives...and the "big picture."

7. Always remember that the only thing that will never change is that there will always be changes. Don't let changes upset you.

Know that you will have to deal with changes and other obstacles, both big and small, continually. Be prepared to be flexible.

8. Don't be a negative thinker and don't let the negative attitudes of others (even if they're family members, friends, or peers) influence you.

All the great men and women in history had to overcome the naysayers who said it couldn't be done—and then went out and did it. Think for yourself!

9. Don't be derailed by "perfection paralysis." Realize that you won't be able to do everything perfectly. Do the best job you can, then move on to the next project. Keep learning and keep moving ahead.

10. Read books (such as Napoleon Hill's classic, "Think And Grow Rich") that will convince you how powerful your mind really is. Develop the tremendous potential in you (that we all have) that has never been tapped!

11. Don't quit. The only way to fail is if you give up. Remember always..."You are what you think you are"

Copyright © Michel Richer

PERMISSIONS TO REPUBLISH: This article may be republished in its entirety free of charge, electronically or in print, provided it appears with the included copyright and author’s resource box with live website link.

Courtesy of: http://hombyz.com

About the Author

Michel Richer is the Business Manager and Webmaster of http://Hombyz.com

The 6 Top Reasons Marketers Should Blog

2009-10-21T04:18:00.000-07:00

by Linda J Bruton

If there is a downside to blogging, I have yet to find it. The
more you learn about blogging, the more there is to like.

In fact, here are 6 mouth-watering reasons why every marketer
should be blogging:

1- Fast Search Engine Spidering and Indexing of Your Site:

Did you know that Google owns the most popular blogging platform
on the planet? Blogger at http://www.blogger.com is used to
produce thousands of blogs. Even a complete internet newbie can
set up a blog in about 5 minutes at Blogger. And guess who can be
counted on to come by and quickly spider all those new blog posts
as they are written?

Yahoo is also embracing blogs and feeds in a big way. Savvy
marketers know that adding their blogs and feeds to their MyYahoo
page can bring the Yahoo spider to their site almost immediately.

One of the reasons that blogs get spidered so quickly is that
most of them produce a feed. Many blogs automatically "ping" (or
notify) some of the large sites that carry these feeds and make
them available for syndication. Search engines spider these sites
many times a day. Blogger, for instance, pings Weblogs every time
you make a post. You can also "ping" a free site called
Pingomatic (http://www.pingomatic.com) every time you add a new
blog post. Your ping will notify Yahoo and 11 other large feed
sites that you've added a post. If it only were so easy to get
Google to notice new pages on regular sites!

If you have a new site that you are having trouble getting
indexed, adding a blog or RSS feed is one of the quickest ways to
get the spiders to come calling.

2-Blogs can Build Your Backlinks Quickly:

If you've spent time trying to get reciprocal links to your site,
you know how frustrating, boring, and time-consuming it can be.
I've long considered reciprocal link building to be one of the
worst ways to develop link popularity. Many SEO experts consider
one-way links to be far more effective.

A blog can build one-way links to your site fast. If you've just
started a blog, you should submit it to the large blog and feed
directories. Here is a list of the Top 55:

http://www.masternewmedia.org/rss/top55/

Once you've submitted your blog to these directories, you'll find
your backlinks growing quickly. This past year, more webmasters
are using RSS feeds on their sites to keep their sites fresh and
spidered frequently. Software applications such as RSS Equalizer,
Express RSS, and CARP make this easy.

After starting my first blog, I was amazed at how many different
sites carried my feed with a link back to my site! These links
can multiply exponentially over time.

Now tell me something. Wouldn't you rather be spending your time
adding content to your site than trying to get questionable
reciprocal links? Especially when it doesn't take any extra time?

3-A Frequently Updated Blog will Keep the Spiders Visiting Your
Site Often:

Most of us are aware that the search engines like sites that are
updated frequently. If you have your blog set up correctly, every
post will update several pages of your site. Then pinging Yahoo
and the blog and feed directories at Pingomatic can bring out the
spiders in just a few hours. This is a great way to get new pages
of your site indexed quickly and frequently.

4-Your Site is Stickier and More Appealing to Visitors:

A blog on your site is an easy way to keep your site updated on a
regular basis. The upside is that visitors will come by more
often. If they find your blog interesting and informative, they
may bookmark your site. That means you have a much greater chance
of making sales. And you have a ready-made audience for any new
products you launch.

A blog can also add a human face to your website that potential
customers will trust and respond to. Most marketers know that
people buy from people they like and respect. A well-written blog
is a great way to build a relationship with your visitors.

5-A Blog Is The Fastest And Easiest Way To Build A Brand-New
Website Without Training:

Even a 10 year old could set up a blog at Blogger.com and be
blogging almost immediately. No HTML knowledge is necessary. You
don't need to know how to FTP. You don't need to know how to link
the pages in your site together. All you have to do is type in
your post and click on the "publish" button. And yet you can
still set up an attractive, spiderable site in record time.

Blogs can be used for any type of site, not just for online ezine
delivery or a place to announce new products. Using a blog you
could quickly build a niche site. Just research the best keywords
for your niche. Then write articles around those keywords and
post them to your blog. Include your keywords in your title. You
now have an instant niche site that will be spidered quickly and
be easy to maintain.

6-Keyword competition in RSS feed sites is much less than in the
SE's:

Google, Yahoo, and MSN each have many millions of webpages in
their indexes. It can be almost impossible to get top rankings
for competitive keywords if you don't have a high PR site with
lots of backlinks.

It's a completely different story at the RSS feed sites. The
competition for many high-competition keywords is almost
nonexistent. Setting up a blog in some of these high-competition
niches is a good way to successfully compete.

Marketers spend a lot of time and money getting traffic to their
sites, creating backlinks, getting good SE rankings, and building
relationships with their customers. A blog can improve your
results in all those areas. There aren't very many free marketing
techniques that can make that claim!

About the Author

For more tips and ideas on how to make money blogging, be sure to visit my "Why Marketers Should Blog" weblog at (what else) http://www.WhyMarketersShouldBlog.co

Understanding Affiliate Programs

2009-10-21T04:15:00.001-07:00

by S. Housley

Affiliate programs are commonly misunderstood, in order to understand affiliate programs lets start with terminology. For clarification purposes, an affiliate is defined as any "referrer" or website that promotes a product in an effort to earn revenue. A merchant is defined as someone who owns a product and is sharing revenues with an affiliate based on the affiliate's performance. Affiliate programs can drive targeted traffic to your website.

There are 3 basic affiliate programs, though only the first two are commonly used.

Pay Per Click - this is when an affiliate is compensated for sending traffic to the merchant. (AdSense is an example of PPC affiliate program)

Pay Per Sale - this is when the affiliate is compensated by the merchant if the referral generates a sale or purchase.

Pay Per Lead - this is when the merchant agrees to pay for a qualified (or sometimes unqualified lead), which is very uncommon because it is subjective and up to the merchant.

Affiliate websites tend to provide information, entertainment, and content services to their customers. The online merchants sell products, goods and services online. These are programs permitting affiliates to earn money based on the visitors to your site who click through to another's website. Some pay a token amount for the click through and others provide a percentage of sales when a visitor "clicks through" to your site and buys a product or service on the other party's site. This could represent a value added service to your visitors.

Affiliate programs allow you to pay and track incentives from other websites that send web surfers, leads or paying customers to your website. Commissions based on purchases made by traffic sent from the referring website can be paid. Besides a commission, an affiliate can receive a flat fee, or other incentives for all valid transactions it refers that generate a sale or lead.

Be careful that the affiliate's web page is not cluttered with banner ads that may crowd out your link, or that be annoying to customers. Affiliate programs enable affiliates to leverage their traffic and customer base in order to profit from e-commerce while merchants benefit from increased exposure and sales.

Commonly traffic to merchant sites is measured and affiliates can clearly see conversion rates. Meaning, they track the percentage of people they are referring, and how much of it results in earned revenue. If the affiliate finds a very low conversion, they will find a better way to monetize that traffic, quite possibly with a competing merchant product.

In order to be a successful affiliate, the affiliate site needs to either have tons of traffic or target a specific audience, frequently one untapped by the merchant. It has been my experience, the closer the affiliate site content resembles the merchant products, the higher the likelihood of a good conversion rate.

Once you are committed to the idea of affiliates, the next step is to determine the kind of tracking system you are going to use. Sales can be tracked by HTML code, which is placed in a shopping cart or on the 'order confirmation'/'thank you' page, and cookies, which are created after the customers click on a banner ad. Cookie killers have been a problem for the affiliate industry. Software vendors have an advantage over other merchants in that new technologies allow software developers to better control compensation. Vendors can 'wrap' their software insuring that their affiliates are compensated for referrals, even if the customer downloads a trial version prior to purchasing. Buy now buttons in the software have affiliate ids imbedded in the download. Combined tracking systems have more success than those that rely on a single tracking technology.

In order to develop a successful affiliate network, merchants must realize that affiliates spend ad dollars on site, and product promotion. If the affiliate is not compensated fairly they will not remain in the merchants network. The bottom line is that affiliate relationships are partnerships, when both sides feel the situation is fair and equitable the relationship will be a success.

About the Author

About the Author:
Sharon Housley manages marketing for NotePage, Inc. http://www.notepage.net a company specializing in alphanumeric paging, SMS and wireless messaging software solutions. Other sites by Sharon can be found at http://www.feedforall.com

"Best Affiliate Program For The Newbie

2009-10-21T04:14:00.000-07:00

Identifying An Affiliate Program That Matches Your USP"

by Karl Augustine

When a newbie begins an online business, the temptation can be high to join most any affiliate program they see in the hopes of making extra money. Given the amount of products and services that newbies get presented with, and since newbies have a burning desire to make money fast, it is easy to see how the online newbie can get lured into joining a lot of affiliate programs without knowing if they should join them or not.

For the newbie, the danger in joining lots of affiliate programs is multi-faceted. Joining affiliate programs takes time, time the newbie could be using defining their USP, learning about getting targeted traffic, or learning other Internet marketing skills that will actually generate revenue for them. In addition, the newbie who joins lots of affiliate programs in the hopes of making instant profits, is at risk of being disappointed when they don't make money by joining the latest affiliate program and that leads to yet further "unproductivity" and poor use of time.

So, what steps do newbies take to identify the best affiliate program(s) that matches their USP?

It will differ based on the goal of each newbie Internet marketer, but here's a small set of steps that are useful to start with:

*Define how the affiliate program's offering complements your USP.
You should be able to clearly map out what the affiliate program's offering (product or service) will be useful to patrons or visitors of your web site, list or customer base. If the product that you will be promoting is something that will be useful to you and people you sell or try to sell to, it may be a useful affiliate program to join.

*Make sure that you fully review the product offered by the affiliate program, use it, and make your own assessment of it.
Don't promote a product from any affiliate program unless you own the product yourself and love it. If you own and love the product that you are promoting, you will be able to sell it more effectively because your energy and excitement level will show through in the deliver of your message to would be customer. In addition, you will be able to list and explain in detail the features of the product or service that the affiliate program is offering.

*Make certain that the web site that sells the affiliate program is set up correctly to sell the product, and sell it well.
The web site that sells the product of the affiliate program should be professional in its layout, design, sales copy, and delivery of the product itself. The web site should have a mechanism to capture the names and emails of the visitors. The web site should also have a strong auto responder series in place to follow up with and sell the visitors of that site on the product.

*Check to see if the affiliate program should be tracked with cookies so that the referring web site will get credit for each affiliate sale, even the sales that come as a result of the auto responder series.
If the affiliate program doesn't use cookies to track referrals, do not sign up.

*Take a look to see if the affiliate program is two-tier so that you can earn money from recruiting other affiliates to that affiliate program.
Most of the the noteworthy and professional affiliate programs will be two-tier although there are some notable ones that aren't, Clickbank being the most widespread. At the very minimum, the affiliate program should offer some sort of incentive to recruit new affiliates. If an affiliate program is not two-tier, make sure that you determine whether or not the product(s) being sold are professional and have good conversion rates.

*Ensure that the affiliate program makes it easy to sign up, complete with welcome email and full contact information of the point person who can answer any questions.
If the affiliate program isn't run by a third party like Clickbank, the affiliate program sign up form should also ask for your EIN # or your Tax ID # for proper reporting. For the business owner who has established a business identity, this is key for accurate bookkeeping. Some marketers have gotten away from welcome emails to their new affiliate partners because the potential affiliate partners sometimes do not want to give their name and email, they'd just like to join and make money with no 'marketing' messages hitting their Inbox.

*A strong affiliate program ideally should have plenty of help tools including any or all of the following: real-time tracking, solo email templates (even though I suggest writing your own), graphics, banners, etc.
For the newbie, the better the help tools, the easier it will be for them to feel comfortable selling the product. In addition, the affiliate program should offer follow up emails to all affiliates offering help to sell more products as well as relaying success stories of how other affiliates have made strong sales numbers.

*Ideally, the affiliate program's affiliate links should be unique to the affiliate but should also be structured so that the link is distinctly protected from would be commission thieves.
The affiliate link ID should not be visible in the URL after the would be customer gets to the sales page of the product in question.

For the newbie, the abovementioned steps will help mitigate wasting time and will maximize their time and efforts. The best affiliate program for the newbie is the one that satisfies most or all of these criteria and sells a product that meshes well with the newbie's USP.

Karl Augustine
"Starting Smart!"

About the Author

Author, "9 Deadly Mistakes To Avoid When Starting An Online Business"
Publisher, "Starting Smart!" e-zine

Design Website For Pre-Selling

2009-10-21T04:11:00.000-07:00

by Sanjay Johari

How do your feel when salespersons knock at your door at
odd times trying to sell something you are not interested
in? I feel pity for these people who have to toil from
house to house facing rejection at most of the places. And
yet they wear a forced smile as they start their rehearsed
sales speech. When they come to me at most inconvenient
time (for me) and insist on selling when I do not want to
talk to them, I find it, if you will pardon me, irritating;
although I do my best not to show it as I turn them away as
politely as I can.

Websites which have only sales pitch as their main content
are very much like these salespersons who arrive when you
are not looking for them. Visitors go web browsing
primarily looking for specific information and not sales
offer. When a visitor arrives at a website which offers
information she finds useful and solutions to her problems,
she is likely to visit again.

A website should not be designed only for selling
something, though that may be purpose for setting up the
website in the first place. The website should provide
information and commentaries which can pre-sell the product
to the visitor. It should attract targeted visitors
interested in the content. Pre-selling arouses interest in
the product prompting the visitor to visit again. She will
try to satisfy herself with information provided,
testimonials, bio of the webmaster, links to related sites
and other considerations before she will actually buy the
product. In a way, pre-selling tries to guide her in this
direction and makes it easier for her to make a decision.

People are more inclined to buy what they "want" instead of
what they "need". Once they set their minds on buying
something, they look for reasons (or call it excuses) why
they should buy, only to satisfy themselves, though the
decision for the purchase has already been taken.
Pre-selling provides reasons which they find "compelling"
enough to part with money.

The website which has valuable content the visitor is
looking for produces a pleasant experience for her. By
pre-selling she is made to develop trust in the website and
the webmaster and will look at the recommendations with an
open mind. Once the visitor decides to buy, the website
should ensue that she does not face any problems in making
actual purchase. The links provided for the order page
should work properly and the whole process should be kept
simple. It will be very unfortunate if the prospective
buyer calls off the purchase only because she finds that
the ordering process does not work.

How will your website appear to your visitor? That is an
important question which should be asked often. Try to
visualize yourself as a first-time visitor to your site.
Then see you site as if you looking at it for the first
time. How does it appear? Does your headline create a
curiosity? Are you drawn towards the main content or other
features of your site grab your attention? Is your main
content "readable", interesting and not a sermon?
How far does it succeed in pre-selling?

Ask your friends to see your website and give their opinion
on these and other questions. Website building is a dynamic
process and is never complete or perfect. But whatever
changes are made, they should enhance its pre-selling
ability. It is good idea to actually test the website after
changes are made. Any change which tends to reduce the
traffic needs to be modified. The changes should gradually
refine the website to attract more visitors.

Pre-selling should be seen as a service to satisfy the
needs of the visitors who arrive at the website. It should
be considered as the first step before actual sale.
Pre-selling forms a bond, an understanding built on trust
between the seller and the prospective buyer which eases
the process of actual sale.

About the Author

Sanjay Johari regularly contributes his articles to various
ezines. Visit his website for top business
opportunities, e-books, articles, resources and more:
www.Sanjay-j.Com
Mailto: sjohari2001@yahoo.com

Promoting Affiliate Programs through Personal Recommendations

2009-10-21T04:10:00.000-07:00

by Stephen Kelly

Publishing articles online is a highly effective way to increase affiliate revenue. In the current marketing environment, it is increasingly important to differentiate yourself. Consumers have become savvier and are increasingly suspicious of pure shopping websites that send them to another site to complete product purchase. Furthermore, you may capture a consumerâ€™s purchase once, but they are not likely to return to your site. Instead, they will simply return to the retailer you referred them to complete a purchase.

One, highly effective, way to attract new visitors and motivate them to return to your site later is to publish articles related to the product you are trying to promote. For example, if you are trying to promote a new portable MP3 player, you might publish a product review online and include your affiliate links in the article.

These product reviews add value to your website and can dramatically increase consumer confidence in your site. In addition, if you carefully craft your article, you can include targeted keywords which may help you achieve a higher rank in search engines. If your review is useful, users may even link to it from their personal blog, which may also increase your search engine page rank.

You may be thinking, "I am not a writer, so this strategy will not work for me."

However, if you choose affiliate programs carefully and focus your energy on products that you have a genuine interest in it becomes much easier. There are a couple of easy things you can do to increase your affiliate revenue and make your affiliate marketing strategy easier. Write articles that give more than a recommendation. You should talk directly to the consumer about how this product has impacted your life. Speak directly about your experiences with a product, tell a story about using it, ask questions that make the consumer think about how their life would be improved by owning the product.

By writing a product review, consumers will be less likely to be suspicious when you refer them to another site. In the consumers mind, you are simply reviewing the product, but are not involved in selling it directly. If your audience begins to trust your recommendations, you will find that you can sell products to them over and over again.

Now that you have written a compelling, personal article about your product, you have to make sure that other people find your masterpiece. How do you promote this article?

One method of promoting your articles is to publish your own newsletter. Publish an opt-in newsletter that features a teaser paragraph about your article and a link back to your website for the complete article. Be sure to avoid sending your articles out as spam. Be patient as your subscriber list grows and only send people information they have asked for.

If you do not have a mailing list, you still have options. You can publish your article in article databases so that other newsletter publishers will run your article in their newsletter or on their website. Publish your new product review in an article database with a link to your website in the articles credits. Do a search on Google for â€œfree contentâ€ � and then lea rn how to submit your articles.

Finally, you can post your articles or product reviews on related bulletin boards and forums online. It is free and people will be able to interact with you. Of course, if you try posting an affiliate link, people will notice and you will immediately lose credibility. Simply include a link to your website in your â€œsignatureâ€ �. If your articles are interesting, people will visit your website where you can use your affiliate links.

In summary, provide your audience interesting, relevant content and they will trust your recommendations. If they trust you, they will buy from you. Promote your affiliate programs with personal recommendations in newsletters on relevant websites and online forums. The visitors will come, but more importantly they will buy.

About the Author

Stephen Kelly founded http://www.ArticleAgents.com and http://www.ReviewAgent.com, two free tools you can use to promote your affiliate accounts by publishing product reviews and articles online. Anyone may reproduce this article, as long as this information and all links remain intact.

Affiliate Program Scams To Watch Out For

2009-10-21T04:09:00.000-07:00

by Chet Brzezinski

Affiliate programs are a great way to earn extra money or even a good living if you do things right. But unfortunately, there are alot of people out there that know this and will do everything they can to swindle you into selling their products while not having to pay you a dime. There are some merchants that view affiliates as a source of free traffic and free marketing.

Here are a few things that should draw up a red flag when you come accross an affiliate program:

No Contact Information
If they don't post their contact information on their site then you should not bother with them. To me this tells me they are trying to hide something.

Commission To High
Yes, it is great when we find affiliate programs that pay high commissions. But you also have to be careful that they are not just trying to draw you into their affiliate program by using big numbers. It wouldn't be good to earn alot of money just to get scammed. If it is to good to be true then most likely it is. A merchant will never pay more on a commission then they would get for the sale. It is just not business smart.

No Replies To Your Emails
If they do have their email address on their site and you send them an email but they never reply then you should drop them like a hot rock. If you can't trust them to take one minute to give you a reply then you shouldn't trust them to spend a few more minutes cutting and mailing you a check.

Returned Affiliate Payment Checks
If they do send you a check and your bank returns it then this would be another reason to draw up the red flag of being scammed. Of course you should always contact the merchant to try to resolve the issue, it could be an honest mistake. But if it happens in conjuction with no email replies and lousy affiliate support then I wouldn't waste anymore of my time with them.

The bottom line is that you should always use your gut feeling when dealing with affiliate programs. If you are not sure about an affiliate program then search the search engines for the merchants name. If they are known for scamming affiliates you are sure to find it in the search engines and affiliate forums.

About the Author

Chet Brzezinski has been in the affiliate marketing and affiliate management industry since 1997. View more affiliate program related articles at any of Chet's sites below:
http://www.affiliate-program-review.com
http://www.proudmedia.com

Tips For Running A Profitable Web Site

2009-10-21T04:08:00.000-07:00

1. Address your targeted audience on your business
site. Example: "Welcome Internet Marketers". If
you have more than one, address them all.
2. Make sure your content and graphics are relevant
to your web site's theme. You wouldn't want to use
a bird graphic on a business web site.
3. Alert visitors by email when you add new content
to your web site. This will remind people to revisit
your web site.
4. Offer a way for visitors to contact you on each
web page. List your email address, fax number and
phone number.
5. Give people the option of viewing your web site
offline. Offer it by autoresponder or printer friendly
version.
6. Make sure a least 50% of your content is original.
The other option is to offer something else original
other than content, like software or an online utility.
7. Offer your visitors incentives for revisiting your
web site. You could give them new content, ebooks,
software, ezine, etc.
8. Publish a FAQs for your business, product and
web site. They could have questions about multiple
parts of your business.
9. Make sure all links on the navigational bar are
clickable. If people can't get to where they want to
go, they will leave.
10. Organize you web site in logical and profitable
sequence. You don't want to give a freebie before they
learn about the product(s) you're selling.

Web Site Design And Writing

2009-10-21T04:06:00.001-07:00

1. Don't load your web site with a lot of high tech
clutter. Your visitors may miss your whole sales
message.
2. Don't use unnecessary words or phrases on your
site. You only have so much time to get your visitor's
attention and interest; make ever word count.
3. Don't make the mistake that everyone will totally
understand your web site message. Use descriptive
words and examples to get your point across.
4. Don't write your strongest point or benefit only
once. You should repeat it at least 3 times because
some people may miss it.
5. Don't push all your words together on your web
site. People like to skim; use plenty of headings
and sub headings.
6. Don't use site content your target audience isn't
interested in. If people are coming to your site to
find info about fishing don't include soccer content.
7. Don't use 50 different content formats all over
your web site. Use the same fonts, text sizes, text
colors, etc.
8. Don't use words your web site visitors might not
understand. People are not going to stop and look
in a dictionary, they will just go to another site.
9. Don't let selling words and phrases go unnoticed.
Highlight important words and phrases with color,
bolding, italics, underlining, etc.
10. Don't forget to use words that create emotion.
All people have emotions, people will have more
interest when they are emotionally attached.

10 Web Site Add-Ons That Can Catapult Traffic

2009-10-21T04:05:00.002-07:00

1. Add a message board to your web site. People
will visit your web site to ask questions and answer
other people's questions.
2. Add a directory of web site links to your web
site. People will visit your web site to find related
web site links for the topic they're interested in.
3. Add an article section to your web site. People
will visit your web site to read and learn new info
related to their interests.
4. Add an archive of past e-zine issues to your
web site. People will visit your web site to read
past issues of your e-zine that they've missed.
5. Add a free ebook directory to your web site.
People will visit your site to download, study and
read new information.
6. Add a free classified ad section. People will
visit your web site to place their own free classified
ad and to read other offers.
7. Add a free link page to your web site. People
will visit your web site to place their own link and
to look at other people's links.
8. Add an "about us" page to your web site. People
will visit your web site to read about your business
and yourself.
9. Add a guest book to your web site. People will
visit your web site to leave their opinions about your
business and to list their signature file.
10. Add a free software download page to your
web site. People will visit your web site to find
new software that will make their life easier.
----1. Add a message board to your web site. People
will visit your web site to ask questions and answer
other people's questions.
2. Add a directory of web site links to your web
site. People will visit your web site to find related
web site links for the topic they're interested in.
3. Add an article section to your web site. People
will visit your web site to read and learn new info
related to their interests.
4. Add an archive of past e-zine issues to your
web site. People will visit your web site to read
past issues of your e-zine that they've missed.
5. Add a free ebook directory to your web site.
People will visit your site to download, study and
read new information.
6. Add a free classified ad section. People will
visit your web site to place their own free classified
ad and to read other offers.
7. Add a free link page to your web site. People
will visit your web site to place their own link and
to look at other people's links.
8. Add an "about us" page to your web site. People
will visit your web site to read about your business
and yourself.
9. Add a guest book to your web site. People will
visit your web site to leave their opinions about your
business and to list their signature file.
10. Add a free software download page to your
web site. People will visit your web site to find
new software that will make their life easier.

10 Concerns To Have Before Creating A MembersOnly Web Site

2009-10-21T04:05:00.000-07:00

1. What will be the title of your members only web
site and will it have a subtitle? Will you have a logo,
slogan or graphics for your members only site?
2. What type of content will you include in your
members only web site? ebooks, articles, software,
interview transcripts, etc.
3. Will your members only web site host a member
community? message boards, chat rooms, online
classes, online consulting, etc.
4. Will you be the only content provider or will there
be other providers? Will your ask other members to
contribute related content to your member's site?
5. How will you allow people to navigate, find or
search for information in your members only site?
Links, search engine, index, table of contents, etc.
6. Will your members only web site be sold as a
product or will it be used as a promotional tool?
Will you be promoting back end products in it?
7. Will you members only web site ad contain a
guarantee, testimonials, strong headline, a major
benefit, limited offer, free bonuses, etc.
8. What type of payments will you accept for the
members only web site? Will you be billing them
once, monthly, quarterly or yearly?
9. Will you let your prospects read a free sample?
content excerpt, ebook chapter, article, a free hour
pass, free limited membership, etc.
10. Will you password protect your members only
web site, use an honesty system or change the url
every now and then?

Follow-Up With Freebies

2009-10-21T03:43:00.001-07:00

It's important to follow-up with potential online customers.
Following up with them can increase your traffic and sales.
The more times people see your ad, the greater chance
they will buy your product or service.
Before you can follow-up with them you need their e-mail
address. You can get their e-mail address by having them
subscribe to your e-zine, fill out a web site form, or e-mail
your follow-up autoresponder.
Most people won't give you their e-mail address unless they
get something in return. The most effective way is to offer
them an internet freebie. Here are some ideas.
Free E-Gifts
It could be free software, guest books, web space, graphics
message boards, etc.
Free Internet Services
It could be free e-consulting, search engine submissions,
web design, etc.
Free E-Information
It could be a free e-book, e-report, web book, e-course,
e-zine, etc.
When you follow-up with the freebie, you can include your
ad somewhere on the freebie. If it's a free service, have
your ad in the follow-up e-mail. Make sure you always get
their permission before you follow-up with them by e-mail.
----

Best Places To Submit Your Articles For Viral Traffic Generation

2009-10-21T03:25:00.000-07:00

by Terence Tan

This article from The Mender (Issue 38),
Metamend's Web Site Optimization and Marketing Newsletter.

If you've spent any time online trying to promote your website or business, you must have very likely realized that one of the most effective ways to generate tons of free targeted web traffic on a long term basis is to write your own informative articles and freely distribute them to other webmasters and ezine publishers for their use. Some of the benefits of this amazing strategy include:

-It's totally FREE and gets links to your website distributed to a huge number of other related websites on a permanent basis. No need to pay for the links... no need to give a return link on your own website to other sites.

-The presence of your links in many other websites also directly increases your Google PageRank and increases the targeted free traffic you get from search engines!

-When people see your name and website/company in the bylines of the articles on different sites, you will naturally be thought of as an "expert" in that field... This increases your credibility and makes it more likely that your visitors will take your recommendations to them more seriously.

The purpose of this article is to seek to create a comprehensive list of places where writers can submit their articles for distribution. By creating this list based on the contributions and "tip offs" of the visitors to HugeAffiliates.com, we hope to save you the large amounts of time searching the web for websites and article announcement services. (Yes, you can try to use google to search for "article submission sites" but you will waste precious time going through a lot of unrelated websites.)

If you find this useful, please bookmark it and use it whenever you have new articles to distribute. We will continue to update it with the latest links as we get "tip offs" from our visitors. If you have any links to suggest to us, please let us know using the "Contact Us" page on HugeAffiliates.com.

If you would like to reproduce this article and link resource in your website/ezine to increase your website's "stickability", please feel free to do so. (because of the convenience of finding all the possible submission sites on one page, many writers will bookmark your site if you have this resource on it.) Go ahead... Bookmark this page NOW! Please reproduce the whole article including any reference to HugeAffiliates.com though.

Here Are The Links:
http://goarticles.com/ulogin.html

http://www.ezinearticles.com/add_url.html

http://www.freewebarticles.com/index.php

http://www.certificate.net/wwio/ideas.shtml

http://www.ideamarketers.com/writers.cfm

http://www.womans-net.com/submit.php

http://www.netterweb.com/articles/articlesubmit.htm

http://www.allnetarticles.com/submitarticle.asp

http://www.articlecity.com/article_submission.shtml

http://cerebuswebmaster.com/onsite/articles/submit_article.html

http://www.huginc.com/secure/frmarticle_submission.asp?AuthorID=11286&FrmMd=ADD

http://www.boconline.com/sub-art.htm

http://clickforcontent.com/cgi-bin/epro/reporter.pl?signup

http://www.marketing-seek.com/articles/submit.shtml

http://www.addme.com/nlsubmit.htm

http://www.scamfreesuccess.com/article.htm

http://www.connectionteam.com/submit.html

http://www.vectorcentral.com/articles-form.html

http://www.marketing-of-training.com/motoarticles/submityourarticle.htm

http://www.work911.com/cgi-bin/links/add.cgi

http://www.businesstoolchest.com/articles/submit.shtml

http://thewhir.com/find/articlecentral/suggest.asp

http://top7business.com/submit/

http://www.upromote.com/newsletter/submit.html

http://www.digital-women.com/submitarticle.htm

http://www.coolpick.com/way/cool/submit1.html

http://www.freesticky.com/stickyweb/submitarticle.asp

http://groups.yahoo.com/group/aabusiness/

http://groups.yahoo.com/group/aageneral/

http://groups.yahoo.com/group/aainet/

http://groups.yahoo.com/group/article_announce_list/

http://groups.yahoo.com/group/articles4you2use4promotion/

http://groups.yahoo.com/group/articles_archives/

http://groups.yahoo.com/group/ArticlePublish/

http://groups.yahoo.com/group/ArticlePublisher/

http://groups.yahoo.com/group/articlesubmission/

http://groups.yahoo.com/group/Free-Content/
Hope you found this article useful. Remember... bookmark this page and if you discover any other good sites to distribute articles through, let me know. Thanks!

About The Author

Terence Tan is the creator of HugeAffiliates.com, a web site dedicated towards the development of Multi Level Affiliate Programs as an alternative system of business.

Visit http://hugeaffiliates.com/ to learn how MLAP's can multiply your affiliate referral commissions AND for the most updated version of this list of places to distribute your articles.

This article was originally found on the Marketing Seek web site.

Other articles from this issue:
- Context Within Search and Optimization

Lead Generation Using Traffic Exchanges

2009-10-21T03:20:00.001-07:00

by Jimmy Boyd

Leads have always been the lifeblood of any business. If you have no leads, you have no business. Everyone knows that, but the thing killing everybody out there is how to get leads for your business without going broke in the process.

There are many ways to drum up business, but the focus of this article is the use of viral techniques you can use to create leads for your business.

Viral marketing comes in many shapes and sizes, but the best way to get started with viral marketing fast is to use traffic exchanges.

The problem that people run into with traffic exchanges is they try to use some self-replicated website, thinking that if they just show the page enough, someone will buy.

Sorry, but this doesn't work. I have used traffic exchanges for years, and I can tell you straight up that they work and work for one purpose only: LEAD GENERATION.

So, how do you use traffic exchanges for lead generation?

It's actually quite simple. All you have to do is set up a simple page like this with an opt-in box.

http://www.azwebcity.com/jimmyboyd/safelistpoppage.html

You have the right to copy this page if you want. Just right click on the page, and you will see the menu pop up. From there, click on Source or View Page Source, and you can copy and paste that HTML and modify it with your details.

You will also need an autoresponder service to handle your leads. I highly recommend SendFree for this purpose. They have a free 30-day trial on their Premium Service, which is nice because you will need a little time to start getting leads for your list.

Now, go and find some traffic exchanges and promote that lead generation page in those exchanges.

This works. It absolutely works like a charm. We get lots of subscribers using this page with exchanges. However, it's a bit tiring to use the exchanges EXCEPT MillionDollarTraffic. This the best exchange we have used because the pages simply pop up for you.

Here is an Action Plan you can use to help you get started getting your own leads from MDT.

http://www.affiliate-money-pool.com/lead-traffic.html

Each time you close the special browser, you get credits to show your page. The conversion rate on this kind of exchange, which I believe is the first of its kind at the time of this writing, is much better than timer-based exchanges.

About the Author

Jimmy Boyd teaches you how to get leads for your business using free viral techniques. Learn more about getting your own leads with our free membership site.

Back Door Google via Overture

2009-10-21T03:18:00.000-07:00

by GIL HIDAS

It is official, the search engine wars are in full swing. On Tuesday, February 01, 2005 MSN officially rolled out its new search solution to all of its websites, including MSN.com. This comes on the heels of growing speculation that Google plans to launch its own browser, possibly in an attempt to attack Microsoft’s greatest strength in Internet Explorer. Is it possible that MSN actually rolled out their search engine to prevent Google from doing the same thing they did to Yahoo! with the release of Gmail?

Google appears to have been planning a browser for some time. In April of 2004 they purchased the domain gbrowser.com (notice the similarity to gmail.com) and recently they lured two of the lead developers on the Firefox browser project to join the Google team. When asked what their role would be at Google, both developers were unable to specify what their roles were. Yet with Firefox’s relative success at chipping away Internet Explorer’s stronghold on the browser market, Google is certain to take notice of the minds that were able to make a dent in the Internet Explorer stronghold.

Google Has a History of Attacking Strengths

The common thought when considering an attack on a competitor is to attack their weaknesses. Google, true to their history of bucking tradition, has a history of doing just the opposite. Rather than attacking their potential competitor’s strengths, Google identifies its competitor’s strengths and attacks those strengths directly. This is exactly what they did when they launched Gmail.

Before the launch of Gmail, the search engine wars were being anticipated by the SEO community. Yahoo! had acquired Overture and Inktomi and had announced its plans to abandon the Google search results. Similarly, MSN had announced that they too would be leaving Google’s search results and would develop their own internal search technology. Both Yahoo! and MSN posed a real threat to steal a significant portion of Google’s search market. However, at the time, Yahoo! proved to be the more imminent threat as they would go to market with a proven search technology in Inktomi and an established advertising network with Overture.

Yahoo!’s real strength in attacking Google was the draw that their portal had. The tool that offered Yahoo! the most certain return traffic was Yahoo! Mail. Although Yahoo! has several different tools that bring users back time and time again, nothing was as powerful as their email system. As people came back to Yahoo! to use their e-mail, or other tools for that matter, the hope was that they would grow to become loyal to Yahoo!’s search results as well.

Google realized the strength of Yahoo! Mail, so they launched Gmail as an offensive on Yahoo!’s greatest strength. At the time Google launched Gmail, they were offering 10 times the amount of space, an obvious attempt to gain press and increase the desirability of Gmail.

MSN Search Provides a Bigger Threat

Although MSN Search currently holds a smaller share of the search engine market than Yahoo! or Google, they are actually the bigger threat to Yahoo!. Yahoo! had the ability to push their search results to the millions of people who come to their portal to use their tools. If Google is able to provide users with the same tools that they find at Yahoo!, users no longer have a reason to visit Yahoo!. However, any computer user who is using Windows most likely will use Internet Explorer, even if it is to eventually download an alternate browser, and we all know that most people are comfortable enough with Internet Explorer to not even look for an alternative.

Because MSN has the constant attention of consumers through Internet Explorer, they have many more channels to push their search results through. Do not be surprised if the next version of Internet Explorer comes with a search bar included as well as more redirects to MSN search results when a bad address is typed in the address bar. As long as MSN has such a strong majority of the browser market they will be able to push their search results.

MSN also has the advantage of developing a new search technology. Yahoo! entered the search engine battles using technology that web searches had been using for years in Inktomi. The problem is that users had already used Inktomi search results and had chosen Google instead. Although Yahoo! made changes to the algorithm that powered Inktomi’s results, the changes were not significant enough to make a strong distinction from Google’s search results. Whether the MSN results will be of a significantly higher quality than Google is yet to be seen, but by developing a new search technology, MSN has the ability to provide users with significantly different results than Google.

Google Will Need To Duplicate Gmail with Gbrowser

With MSN’s search becoming the latest threat to Google’s search market stronghold, Google will once again attack its competitor’s strength. Internet Explorer has recently shown some weakness in losing market share to Firefox, and it appears as if Google is ready to attempt to bring down MSN’s greatest strength.

If Google hopes to have any success in bringing down Internet Explorer, they will need to duplicate the success of the Gmail campaign. When launching Gmail, Google knew that they would make little to no impact on Yahoo! if they were to simply offer an e-mail program that was open to the general public. What reason would a person have to join Gmail if they had a perfectly fine email account at Yahoo!? An open launch to the general public would result in an initial influx of new users, many of which would be curiosity seekers who would quickly forget about their new, secondary email accounts.

Instead of launching an open campaign to invite the general public to participate in Gmail, Google chose to employ a viral marketing campaign of six degrees of separation. No single person had the ability to get a Gmail account unless they knew someone who was permitted to extend an invitation. People who had an account, and who in turn were allowed to give away six invitations to others to join Gmail became Gmail’s primary advertisers. A feeling of exclusivity became quickly associated with having a Gmail account, and soon message boards were filled with people offering just six accounts that they were able to give away. The effect is a brilliant example of just how effective Gmail can be. Gmail did not and will not become the most popular e-mail program in a short time span, but over time the six degrees of separation will make Gmail the most popular email system available (if you know someone).

If Google wants to be at all effective in dethroning Internet Explorer, they will have to reach into their bag of tricks once again to make Gbrowser an option that carries the same desirability that Gmail carried. Google can certainly count on the Microsoft haters to give their browser a spin, but in order to get the audience that really matters, the vast majority of Internet users, Google will need to extend a personal invitation.

MSN Must Act Quickly

Now that MSN has launched their search results, they will need to act quickly to protect against Google making any serious impact on their browser market. MSN has already done several things right. They are the first of the major search engines to offer their search results in an RSS format, opening up their results to all webmasters. They also offer Encarta answers to search results, provide music searches, feed discovery, definitions, provide math calculations, news search, and other features that are becoming increasingly important to offer.

However, MSN has not yet launched its own sponsored links program. Although this is certainly a program in the making, MSN will need to launch this service as soon as possible if they want to compete with Google and Yahoo! on every level.

But more importantly, Microsoft will need to have a new version of Internet Explorer available to launch once Gbrowser makes its debut. Yahoo! successfully dampened the blow of Gmail by matching the increased storage space that Google came out with. If Microsoft wants to keep its browser market share safe when Google launches Gbrowser, it will be important that they answer Gbrowser with a competitive product.

It Is All Very Welcome

The search engine wars are all very welcome. The results of the search engine wars have been nothing but positive so far. The launch of Gmail provided users with significantly increased storage for email. Yahoo! has improved their search results and Google is continuing to try and improve their search results. If Google launches a new browser it will no doubt offer new options that will only help users organize and find information.

The search engine wars have become much more than a war for the attention of Internet searchers. Because Yahoo! and MSN entered the search market hoping their strengths would provide them with the necessary momentum to topple Google, Google has brought the battle to Yahoo! and MSN. The search engine war is now the war of vying for Internet user’s attention through search, email, browsers, news aggregation, etc.

No matter how the search engine wars turn out, the people who will ultimately benefit will be Internet users…and the shareholders of the winning company.

About the Author

Mark Daoust is the owner of http://www.site-reference.com.

Getting Unlimited Traffic From Search Engines

2009-10-21T03:14:00.000-07:00

by Kusuma Widjaja

Search engines have become so intimidating lately - most people

think that search engines are just out to get them - everyone's

becoming afraid... They also think that getting #1 rankings

is near impossible.

Yes, if you're trying to trick search engines, THEN - they're

out to get you - BIG TIME.

BUT, if you're willing to work with them and help them,

then they can seriously be your business's best friend.

Here's how:

----------------------------------------

Writing Articles for Search Engines

----------------------------------------

Actually, you're writing articles for TWO people.

1. Search Engines

2. Your Potential Customers

. Why for Search Engines?

Because search engines love content, and it's that very content

that let's you invite traffic from search engines.

These articles help you optimize your website for search

engine rankings (more on this in a bit).

. Why for Potential Customers?

Because these articles are what your prospects are looking

for on search engines - they land on that page, find the

information they need and then see your "recommendation"

- aka affiliate link and they click, click BUY.

So, your articles eventually lead to sales and commission

for you.

So once again, the purpose of articles:

. Provide content/information for:

. Search Engines

. Potential customers

. Promoting traffic to your affiliate program

----------------------------------------

Optimizing your Articles with Keywords

----------------------------------------

We don't want to make your head spin here, so we'll try to keep

this AS simple as possible.

There are certain places you want to insert your keywords

when building an article webpage.

Here they are:

. The title of the page

. The Description META Tag

. The Keyword META Tag

. In your Headline, use HTML Tag < h1 >< /h1 >

. Your first line of text

. Once or twice per paragraph

. Once/Twice in bold . In the text of a link

Some other tips:

. In your graphics - use keyword in HTML ALT tag . Use

a secondary keyword also - a few times

Some Cautions:

. Don't Overkill - repeating your keyword an obsense number

of times will not help you at all - it will hurt you.

. Never hide keywords - never.

. Nothing tricky - if it's tricky, don't do it.

. Don't have a LONG keyword META tag

The above is how most search engines determine how relevant

your webpage is to a specific keyword.

This is NOT the only element involved in search

engine optimization, however, it's one the most important.

The next strategy we're going to discuss is also critical -

for Google, especially.

////////////////////////////////////////////////////////////////////////////

You can learn a lot more about How to Dominate Search Engines

and also get Step by Step Instructions to turn that traffic

into $300.00, $600.00 or $900.00/month in residual

income at DominateSearchEngines.com

////////////////////////////////////////////////////////////////////////////

-----------------------------------

A Linking Strategy

-----------------------------------

Alright, now, we're going to discuss the one, quite possibly

most important element to ranking well in Google - the #

of incoming links.

Google has been giving more and more importance to what they

call their "PR" - short for Page Rank. The PR is based

on a scale of 1-10 and the higher it is, the more incoming

links you have.

The PR is determined by the number of INCOMING and OUTGOING

links you have. You should have the maximum number

of incoming links.

See, Google's theory is that by having a site link to you,

that website is basically "voting" for you - that site

is telling Google

"Hey, I like that website, it has good content, I feel

comfortable sending MY visitors there, so should you..."

The more sites that tell Google that, the more willing Google

is to send it's traffic.

So, bottom line, recruit incoming links.

----- How?-----

How did we know you're going to ask that million

dollar question?

Our answer is not that "great" -

"Just ask..."

Contact websites in your niche and ask them for a link exchange.

How to find these websites?

. Check the sites linking to your competition on Alexa.com

. Do a search on Google.com for your keyword and contact all

the relevant websites.

Send them an e-mail, call them, etc...and let them know what's

in it for them - a reciprocal link to help THEM with search

engine optimization as well.

NOTE: A linking strategy is VERY important if you want

any chance at making it to the Top 10 page on Google and

then staying there...

=================================================

Finally!Discover Amazing Ways to Dominate The Search Engines...in

Less Than 3 Hours With the New System that Guarantee FRE*E

Traffic for You! Brought to you by Anik Singal

DominateSearchEngines.com

=================================================

About the Author

Kusuma Widjaja is President of Yahoo Cyber Technology,

10 Innovative Ways To Use Your Autoresponder

2009-10-21T03:11:00.000-07:00

by Anik Singal

Collect leads with your autoresponder. You will get an e-mail digest of everyone's e-mail addresses who requests information from your autoresponder.
Publish a price list of all the products and services that you offer. You could also include order forms, product descriptions, and other sales material.
Publish free reports in autoresponder format. The reports should be related to your business or web site. Giving away free stuff will quickly increase your traffic.
Collect vital customer satisfaction information by publishing a survey in autoresponder format. This type of information will help you serve them better.
Instead of answering every customer question that's e-mailed to you, publish " Frequently Ask Questions" in autoresponder format. This will save time and money.
You could publish your testimonials or endorsements in autoresponder format if you don't have the room in your ad copy. It's more effective to include all of them.
Provide back issues of your e-zine archives in auto- responder format. This will give your subscribers and web site visitors easy access to them.
Publish your entire web site in autoresponder format. Sometimes visitors don't have enough time read your entire site. They could print it out and read it offline.
You could offer your ebook in autoresponder format. Your visitors won't have to download it or have the software to read it right away.
You could publish the terms and conditions to any business transactions in autoresponder format. This could include return policies, purchases, refunds etc.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This article is written by Anik Singal,
founder of AffiliateClassroom.com.
Anik Singal has developed his own affiliate
system that helped him earn well over $10,000
in just 60 days. Now, he's looking for a few
students to train one step at a time.
http://www.AffiliateClassroom.com

Five Proven Ways To Promote Your Web Site

2009-10-21T02:57:00.000-07:00

by Adrian Kennelly

Holding a contest or sweepstakes is an proven way to promote your web site. You can announce your site to hundreds of web sites that list free contests and sweepstakes. Send out a press releases about your contest or sweepstakes. Ask entrants to your contest or sweepstakes if they would accept offers from your business in the future by e-mail.
Use online chat rooms to promote your web site. Find the right chat room where your targeted audience would gather. Announce to everyone in the chat room something interesting or free that's offered on your web site. This will draw visitors to your web site.Always be aware of chat room rules before engaging the visitors in a sales pitch that could be considered spam.
Cross promote your web site with other sites. I try to find other web sites. that have the same target audience, but are not in direct competition with my business. Doing cross promotions with other businesses increases your profits, sales, and beat your competition. You can find businesses to cross promote all over the Internet.
You can easily promote your web site by using traffic generators. It could be a free e-zine, service, e-book, contest etc. Giving away traffic generators gives you the opportunity to get free advertising by including your ad on them . There are online directories that will also let you submit your freebie information. You can even let other people give away your traffic generators.
Posting messages to e-mail discussion lists is a great way to promote your web site An e-mail discussion list is a group of people connected together via e-mail that can communicate with one another. When you post a message to a list include your signature file at the end. Include an attention getting sentence why they should visit your web site.

About the Author

Visit DirectoryGold - Web Directory, with free email, article directory, and shopping and info links

Choosing the Correct Keywords For a Site

2009-10-21T02:53:00.000-07:00

by Sumantra Roy

In this article, we focus on the correct way of finding out the keywords for which you should optimize your site for the search engines. This article will give you the formula for the Keyword Effectiveness Index (KEI) - a mathematical formula which I have developed to help you determine which keywords you should be optimizing your site for.

Step 1: Open your text editor or word processor and write down all the words and phrases that you might have searched for if you were looking for a company which offers products and services similar to yours. For example, suppose your company organizes packaged tours to Australia. Here's a list of phrases that I might have searched for if I were planning to make a trip to Australia:

tourism in Australia
travel to Australia
travelling in Australia
travel agencies in Australia
travelling agencies in Australia
Australian travel agencies

Of course, the keywords that came to your mind may have been different. But that's not important - the important thing is to get an initial list of keywords.

You may be wondering why I have not used single word keywords. Here's why:

Firstly, single word keywords tend to be hyper-competitive. A search for "tourism" or "travelling" in any search engine will probably generate hundreds of thousands of pages. While it is possible that you may get your page in the top 10 for such a single word keyword, it is quite unlikely.

Secondly, because of the sheer number of pages that single word searches can throw up, most search engine users have realized that they can get more relevant pages if they search for phrases rather than individual words. Statistical research has shown that most people are now searching for 2 or 3 word phrases rather than for single words.

Thirdly, single word keywords won't get you targeted traffic. When people search for "tourism", they are not necessarily looking for tourist destinations in Australia - they may be interested in any other country of the world. Even if you got your site into the top 10 for tourism, you gain nothing from such visitors. However, when someone searches for "tourism in Australia", he/she is your potential customer, and hence, it makes sense for you to try and get a top ranking for your site for that keyword. Hence, whenever you are trying to generate keywords, try to be location specific. Try to think of keywords which apply to the geographic area that your product or service is designed to serve.

Step 2: Open any spreadsheet program that is installed in your hard drive. I assume you are using Microsoft Excel. If you are using some other spreadsheet program, just change the spreadsheet related procedures outlined here to fit your program.

Create 4 columns - one for the keyword, one for the popularity of the keyword, one for the number of sites that appear in AltaVista for that keyword and the last for something I call the Keyword Effectiveness Index (don't worry - I'll explain what KEI means later on). In order to ensure that you can follow what I am saying, I recommend that you add the following column headers to the first four columns of the first row of your spreadsheet:

Keyword
Popularity
No. of Competitors
KEI

In case you don't want to take the trouble of creating your own spreadsheet, download the keywords.zip file from http://www.1stSearchRanking.com/t.cgi?4901&download.htm The file contains a sample spreadsheet in Excel 97 format.

Step 3: A great way to obtain a list of keywords related to the ones you have developed in the first step is to use WordTracker's keyword generation service by going to http://the-easy-way.com/wordtracker.html Click on the "Trial" option at the top of the site. In the page that appears, type in your name and email address and click on the "Start the trial >>" button. In the next page, click on "Click here to start the trial". In the next page, type in the first keyword that you developed in Step 1, i.e. "tourism in Australia", in the text box. Click on the "Proceed >>" button.

Step 4: In the next page, WordTracker will display a list of keywords related to the keyword that you had typed in. (Just scroll down the left pane to see the keywords). Now, click on the first keyword in the left pane which is applicable for your site. In the right pane, WordTracker will show a list of keywords which contain the keyword you had clicked on in the left pane. Then in the table that you have created in your spreadsheet, copy each of the keywords in the right pane and paste them in the first column of the table. Also, copy the number of times those keywords have been used (i.e. the figure present in the Count column in WordTracker) and paste them in the second column. In order to ensure that you can follow me, make sure that you type the first keyword in the second row of your spreadsheet. Of course, you should only bother adding a keyword to your spreadsheet if it is applicable for your site.

Once you have added all the keywords in the right pane which are applicable for your site, click on the next keyword in the left pane which is applicable for your site. Once again, WordTracker will display a list of keywords in the right pane which contain the keyword you had clicked on in the left pane. Again, copy the keywords in the right pane which are applicable for your site and paste them in the first column of your spreadsheet. Also, copy the figures present in the Count column and paste them in the second column beside the corresponding keywords. Repeat this process for each of the keywords in the left pane.

Step 5: Once you have finished with all the keywords in the left pane, press your browser's Back button a number of times until WordTracker again displays the text box which asks you to type in a keyword. Type in the second keyword in your original list (i.e. "travel to Australia"), click on the "Proceed >>" button and repeat Step 4. Do this for each of the keywords that you developed in Step 1.

Step 6: Go to AltaVista. Search for the first keyword that is present in your spreadsheet using exact match search (i.e. you should wrap the keyword in quotes, i.e. you should type a quotation mark before typing the keyword and a quotation mark after typing it). AltaVista will return the number of sites which are relevant to that keyword. Add this number to the third column of the spreadsheet in the same row in which the keyword is present. Repeat this process for each of the keywords present in your spreadsheet. Once you have done that, your first column will contain the keywords, your second column will show the popularity of the keywords and your third column will contain the number of sites you are competing against to get a high ranking for those keywords.

Now it's time to calculate the KEI!

Step 7: The Keyword Effectiveness Index is the square of the popularity of a keyword multiplied by 1000 and divided by the number of sites which appear in AltaVista for that keyword. It is designed to measure which keywords are worth optimizing your site for. Higher the KEI, better the keyword. How the formula for the KEI is arrived at is beyond the scope of this article. If you want to know, send a blank email to mailto:kei@1stSearchRanking.com

If you had used the spreadsheet file that I created for you (see Step 2), you won't need to enter the formula for calculating the KEI yourself. The KEI would be automatically calculated for you the moment you enter the values in columns 2 and 3. You can go straight to Step 8.

In case you didn't download the file, here's how you can calculate the KEI.

I am assuming that you have created the spreadsheet columns in the way I recommended in Step 3 and that you are using Microsoft Excel. If you using some other spreadsheet program, you will need to adjust the formula to the requirements of your spreadsheet program. Click on cell D2. Type in the following exactly as it is shown:

=IF(C2<>0,B2^2/C2*1000,B2^2*1000)

Then click on the Copy button to copy the formula, select all the cells in column 4 which have keywords associated with them and press the Paste button to paste the formula. The KEI for each keyword will be displayed.

Step 8: Use your spreadsheet program's Sort feature to sort the rows in descending order of the KEI. In Excel 97, you would click on the Data menu, click on the Sort menu item, choose KEI from the drop-down combo box named "Sort by", click on the "Descending" option next to it, and then click on OK.

And guess what - that's it! You now know the keywords which you should optimize your site for. You can now start optimizing your site one by one for each keyword, starting with the keyword with the highest KEI. Exactly how many of the keywords you choose to optimize your site for largely depends on the amount of time that you can spare from your normal business activities. But whatever the number of keywords that you target, it obviously makes sense to go for the most effective keywords first.

Tying up the loose ends:

The number of related keywords that WordTracker displays in the trial version is limited. In order to get all the keywords which are related to the keywords you had developed in Step 1, you would need to subscribe to WordTracker's paid service. We highly recommend that you do subscribe to WordTracker's paid service as otherwise, you will miss out on a lot of keywords that can prove to be extremely valuable to you.

About the Author

rticle by Sumantra Roy.

Web site building, site structure and mapping

2009-10-21T02:44:00.000-07:00

by Martin Thomassen

Content is king, linking is queen, but structure comes first. A logical structure of your site is an asset to take into account and not to be underestimated. Actually, I believe that structure is the most important of the three.
Site mapping
Imagine a piece of paper, just a white sheet. Put your home page on top. Below it, put the pages that are at the same level as your home page. Below that put the sub directories that you have on your host and their pages below them. You really should not have sub directories of your sub directories (search engines will not easily find them) so it stops here. Draw a circle around it all and start adding your internal links drawing lines between your pages. Now draw outgoing and incoming links (one line can represent several links).
This is what I call site mapping, your site structure. You should build your site structure the same way you build your page structure, with extreme care and with a purpose. AND, your structure should reflect your strategy. You can have 2 main strategies for your home based business site, so we will discuss 2 main structures as well.
Two types of structures and strategies
One type of structere is when the main purpose of your site is to "sell" the things you show on your home page (or main selling pages). This is a very simple strategy and everything should point mainly to those pages. Your other pages will have one goal, lead your visitors to your home page and try to sell (or offer) them your product or service.
This means that all your resources, all your work should be concentrated on improving and updating your home page, so your visitors will come back to it. All your optimizing efforts are concentrated mainly upon your home page and PR (Page Rank) and keyword optimization will be of the utmost importance to that page. This will result in five or six, links on each page, deliberately concentrating PageRank on a small number of sales pages which you want to rank highly in search engines.
The other strategy is that you have several main pages. Your home page and several pages at the same level that are directly and logically (inter-)related. Visitors can jump around, go from theme to theme and find several things they are interested in. Your main strategy is not to lead them to your home page, that is only something like a welcome page. Your main strategy is to keep your visitors on your site or get them interested in coming back.
Your incoming and outgoing links are spread throughout your main pages. You are spreading PR and keyword optimization throughout your site. This results in dozens of links on every page, to all other pages of the site. This helps distribute PageRank evenly throughout the site.
When you start building your site, you will have to choose between one of these two strategies. Once chosen one, stay with it. I think I would rather make a new site than try to change or combine these strategies and structures. Is one better than the other? No, it all depends on the purpose of your site.
How can this mapping of your site help you?
You need a logical structure for your site. The map shows you how people enter your site, leave your site and where your main attention should go to when updating and optimizing. You need the flow of your site to be smooth and easy to follow for your visitors. It is as if you take them by the hand and show them what you have to offer and that should be a pleasant ride.
All the pages of your site should use the same template and it should be obvious what you want them to do and it should be easy to follow this flow. It is extremely important that your site is easy to navigate! Try to want them to stay on your site and invite them to come back, and of course, give them a reason to do so. Give the option to bookmark your site and be sure that your site title is unique, clear and inviting. Offer your newsletter, updates, articles etc. I do not like pop ups, actually I hate them. I did not ask for them, so I do not want to see them.
Tracking
You need to know if your strategy is working, so you need to know where people enter your site, how they browse around, where they left your site and how long they where at your site. Of course you want to know for each visitor what they did. Use this information to tweak your site and strategy. I use StatCounter, simply the best tracker there is.
I would like to know what it is they are looking for. Your tracker should give you the information about which keywords people used to get to your site. An other service that can be extremely helpful is a robot watch that tells your when search engines visited your site and how they crawled it. Robot Manager provides this service.
But what would be even better than knowing where your visitors came from and which keywords got them to you? I would like to know what they are looking for on my site!
Of course you can ask them. Get them to fill in a survey or something like that (and reward them for doing so). I have heard people who said it worked quite well. I could understand that if you have a high traffic site, but if not? There wont be a lot of people willing to spend their time to supply you with this kind of info. What do I do? I use a site search box that once a week gives me the information of what people searched for on my site! There is no better way to please your visitors as to give them what they are looking for. You can find that search box on my home page.
Use the tracking information to improve your site structure and to give your visitors the service they deserve and are looking for.

-------------- --------------------- ---------------------------
This is the second article in a series about web site building (for beginners). The other articles can be found on my web site: Ebiz Setup Tutorial - Starting a homebased business for beginners.

About the Author

Martin Thomassen is an economist and system analyst who took to the internet to apply his knowledge in this area. His aim is to provide useful information and help to ebiz starters to setup their business for free. Visit his site, http:/www.ebizforfree.co.nr : Ebiz Setup Tutorial - Starting a homebased business for beginners.

How To Be A Customer For Your Own Articles

2009-10-19T05:57:00.001-07:00

by Sanjay Johari

Internet marketers are constantly concerned with this question - how to get more visitors, subscribers, customers. Like many internet business owners I have tried many tricks of the trade to attract people to my offer. In the initial stages I hardly got any visitors to my web site. This was very frustrating. After spending so much time, money and offering really good business proposals I could not find enough takers.

I often felt like shouting - "Hey, look here. I have everything you are looking for. I have schemes to make your life. I am there to help you all along. Why don't you come to me?" But it was I who needed help. I learned the basic lesson the hard way - wishful thinking is not enough.

It's a weird thought but I often feel like entering the minds of the people to find out what exactly they want. What is it in my presentation that upsets them? And what will retain them?

There is a way to enter the minds of your prospects - become your own customer. Think like your customer. As a customer of your product where will you go looking for it? Most obvious choice is search engines. Your customers may be able to find your website if it is ranked high by the search engines. Attaining a high rank for your website can take considerable time. You would like to find your prospects much sooner.

What are the other places where you, as a customer, will go looking for your product? Ezines are one of the options. You will look in the ezines which are related to product you are interested in. You will look at the ads and articles which give useful information. Articles are one of the best means of promotion. My own experience is that visits to my website increased dramatically after I started writing articles. The resource box of the article really seems to attract people. When people read your articles they know that there is a real person who can be contacted. By reading the article readers develop a faith in the author and tend to follow his advice. By the time they click on the link given in the resource box they are already pre-sold to some extent. This I think is a unique feature which you can rarely find in other promotional methods such as classified ads, FFA pages or banner exchange schemes.

In addition your articles give you additional coverage when they are picked up by other publishers and website owners to publish them in their ezines and websites. Articles are generally stored in archives and are accessible to interested persons for a long time. Therefore, your articles can give you publicity weeks, months or even years after they were first published.

Your article gives you a head start in finding your prospects. It definitely improves click-thru rate for your website or the landing page which is linked to your resource box. This should be considered only as the first step towards finding your prospects. Your articles put the odds of finding prospects strongly in your favor.

How do you retain your prospects when they arrive at your landing page? Well, I am not discussing this aspect here, but I will only mention that it would help you again to become your own customer. Look at your landing page as a customer, keep modifying it until you find positive answers to these three vital questions:

1)What are my concerns which have brought me to this page? (Your visitors were led to believe thru your promotions that their particular concerns would be addressed.)

2)What is it in the presentation which tells me at a glance that I might find solutions to my problems? Do I need to look further in this presentation or should I move on?

3)Does the presentation address my concerns? Does it help me? If yes, in what way?

You need to be ruthless with yourself as a customer and answer these questions as honestly as possible. There is no end to improvement and this exercise of thinking like a customer should get better with practice resulting in better conversion rate.

About the Author

Sanjay Johari regularly contributes articles on small business to various ezines. Welcome to International Success Mentoring! Earn while you learn - join the longest running internet business opportunity, because it works.
http://www.empowerism.com/e/95473

How to Promote Affiliate Products Without a Website

2009-10-19T05:56:00.000-07:00

by Jude Wright

How to Promote Affiliate Products
if You Don't Have a Website
Copyright 2004 Jude Wright

Okay, you want to promote affiliate programs. You have one or two that you are very interested in. But - you don't have your website created yet and you don't even have your own optin-in list. What do you do? Here are a few things you can do before you get your website created.

1. Write articles. Yes, I know. It's like being in school again and learning something for the first time. It's really not all that difficult. Think about the affiliate product that you want to promote. How does that product help the person using it? Now, think of a story of someone who is struggling (with whatever task they're trying to do without the product) and then provide the solution to that problem.

You must be careful, though. If the story sounds like a sales pitch, your article won't be published.

Let's take as an example: Autoresponders. Tell the story about a person trying to send out a message every week manually. Talk about the frustrations. Then, provide the solution by explaining how autoresponders work and why they should be used for that task. But don't mention the autoresponder product you are promoting in the article. That's what the article's Resource Box is for! The resource box will contain a "mini" ad of sorts with a link to your affiliate product's website.

Submit your completed article to article announcement lists, article directories and newsletter publishers.

2. Start your own opt-in list.

The gurus tell you that you must have your own list. Is that difficult? Well, yes and no. There are lists and there are Lists. It's easy to find names and email addresses to add to your list - just buy them from a list broker. However, to get a "responsive" list there are some tasks that must be done.

Before your actually create your own website, you can have a list. Simply use one of the free autoresponder or list server companies that are available, such as:

- FreeAutoBot: http://freeautobot.com
- Get Response: http://getresponse.com
- Yahoo Groups: http://groups.yahoo.com
- Topica: http://topica.com

One of these will get you started until you start making some money and can afford to go "pro." Most free autoresponder options will have ads on top of each message you send out.

When you have your website finished, put a subscription box on every page. You never know where your site visitor will be coming from so you'll want to cover all the bases.

3. Submit free and paid solo, top sponsor, and classified ads to newsletters that are in your affiliate product's niche. Most affiliate marketers are doing this already but are making two major mistakes:

1. They use the "canned" ads that the affiliate program company provides. Re-write the ad in your own style. Make the ad different and unique. For a few minutes of work you will get a much better response.

2. They don't mask the affiliate link. I would say that 90% of the ads that get submitted to my newsletter still have the affiliate ID showing. I have preached this many times but it bears repeating. Mask Your Link! Even if you just use a service like http://tinyurl.com or http://snipurl.com, it will save you from having your affiliate ID ripped off by someone else. Besides, your link will look a lot more professional and will meet the line length guidelines that most publishers require.

The best affiliate marketers have their own domain name and website. But these tips should help you get your start in affiliate marketing.

About the Author

-----------------------------------------------------
Jude Wright has been an Internet Marketer for three
years. She has just created a product that will help
other Internet Marketers keep all their marketing
information in one database. Check it out at:
http://i-marketingorganizer.com/organizer.htm

How to select an affiliate program that works for you

2009-10-19T05:55:00.000-07:00

by Thomas Wall

How to select an affiliate program that works for you

Affiliate programs are a great means of earning some handy cash; but not all affiliate programs are profitable. Some will only take up your time and energy and some others may even spoil your website reputation. This is why you got to carefully select your affiliate marketing programs and make sure that they work for you same as your work for them. Given below are a few points that will help you make better decision in choosing an affiliate program that works for you rather than working only for the affiliate merchant.

Points to take into consideration before selecting an affiliate program

1.) Your website and your visitors

If you already have a website, make sure to go for affiliate programs that jell with your website theme. If your website is about cars then promoting cycle related products is going to have very less or no impact.

Secondly finding and scrutinizing your visitors and your target market is a good idea. In any affiliate program, your visitor is the one who is going to get you returns. So primarily get to know your visitors. Analyze your visitor behavior using your website statistics before deciding on which affiliate program to go for. Your objective should be to find out what your visitors are looking for and then promote products of their interest which also match with your existing products or services (if any).

2.) Affiliate merchant’s website

Most affiliates don’t give much importance to the affiliate merchant’s website, forgetting the fact that here’s where the actual sales conversion is to take place. It’s very important that the affiliate merchant’s website is designed to sell. So check and make sure that the merchant’s website is free from unwanted banner advertisements/pop-ups and focus on the affiliate product.

Other important things to check out are the sales copy, privacy policy, product guarantees, after sales service and special discounts/offers available with the product/service. Your main aim must be to find out if the product/service features would actually prompt the referred visitor to make a purchase.

Some affiliate merchants promote more than one product/service on a webpage which can dilute the conversion rate. It is best to go for affiliate programs that focus on a single product/service per webpage.

3.) Quality of goods/services

Just imagine how you would feel, if you were referred by a website to a product that turned out to be of inferior quality? Your visitors will feel the same way about your website if you promote inferior or overly priced goods/services. Always make sure to know about the product/service you are planning to promote. Check for testimonials and references from existing customers to find out about the quality of goods. If possible you can even plan on using them yourself to be on the safer side. In addition, also make sure to compare similar products available over the internet for features and rates.

There are many products that have trial periods or return policies associated with them. Products having return policies can increase the conversion rate but may also lead to debiting in case of a chargeback. Promoting products sold on a trial period basis requires cookie detection to track sales at the end of the period which is very unreliable. So it’s better to confirm with the affiliate merchant the tracking method used or the affiliate payment scheme, in case the products have trial periods.

4.) Reputation of the affiliate merchant

The reputation of the affiliate merchant is important because the odds are against you. There are chances that some affiliate merchants may not payout or make deductions to your actual payments. So make sure to find out using references about the affiliate merchant’s history of making proper payments.

Already existing affiliates of the affiliate merchant are your best source of information. In addition be sure to read their business literature to get an idea about their history of past and present operations.

5.) Commission scheme of the affiliate program

There are many different types of commission schemes that affiliate programs use to reward their affiliates. Some of the most popular ones are pay per click, pay per lead and pay per sale schemes. Some others even offer two tiered and multi tiered commission schemes. Some commission schemes can even be a mix and match of the above.

In case of a pay per click/hit scheme the minimum commission that you can expect is $0.5 to $0.10 per click. For pay per sale a good commission rate would be 15% to 50%. Some companies even offer lifetime commissions, but as most of them are based on cookie identification, they may not work out well.

With the competition increasing almost all merchants have started offering two tiered commissions, some even offer multi tiered ones. Joining these schemes can give you a chance to get paid for the direct sales you make and also for the sales made by affiliates referred by you.

6.) Tracking software used

Tracking software is used by the affiliate merchant to track individual affiliate sales. An affiliate merchant can make use of in-house tracking software, join an affiliate network or use services of an ASP in order to track leads.

In case the affiliate merchant makes use of independent tracking software or ASP services, make sure to find out if the software is reliable and has the ability to track all kinds of sales. If the software uses cookie tracking, find out the duration of the cookie. Although using cookies to track affiliates does not always work fine as the cookies can be deleted by the buyer.

Most affiliate merchants today make use of affiliate network services. Affiliate network services are the safest when it comes to making payments on time, conflict resolution and accurate tracking. Affiliate Networks are also great sources to find good affiliate programs and can help you get payments from different merchants through a single cheque. So make sure to register at some good networks. Some reputed affiliate network services are commission junction, LinkShare, Clickxgalore, and ClickTrade.

7.) Terms and conditions for payment

You do all the hard work as an affiliate and hence you should make sure that you get paid for it. There are chances that the affiliate merchant might have some unwanted rules and regulations in his affiliate agreement; so in-case you don’t like to get a bitter shock in the aftermath, be sure to check out the terms and conditions with utmost care. Some things that you got to look out for in the terms and conditions are as follows,

a.) Payment frequency/Payout rate

Make sure that the affiliate merchant makes payments at the end of every month or with- in a few days afterward. Anything above 2 months for making payments is not advisable. Also find out the mode of making payments. Payment gateways are safer and faster as compared to cheques.

b.) Payment for future sales

Many visitors won’t buy products on their first visit. They might come back though after some time to make the purchase. Make sure that the affiliate merchant pays you for future sales made by a customer referred by you. Although the chances that you get credit for future sales is low due to cookie deletion possibilities, but it is better to have options open.

c.) Minimum Balance Amount for payout

Most affiliate merchants and affiliate networks have a minimum amount for payout. An affiliate would require reaching that amount to get a payment. Find out the minimum balance and estimate if the target is easily achievable for the given product/service.

d.) Roll over/carry over terms

Roll-overs or carry-overs are related to the minimum balance. If the affiliate fails to achieve the minimum balance within a month (or the set payment date), the payment keeps rolling on. Although this is not a problem, some merchant’s may have a fixed rollover period after which the payments will not be issued. Joining such programs is not recommended.

e.) Conditions for Charge-backs on product return

Some merchants have a product return policy which allows the buyer to get full refund in-case he is dissatisfied with the product. The period within which the buyer should return the product to get a refund is called the chargeback period. Make sure to take note of the chargeback period of the merchant and also find out how much of your commission will be debited if this happens. Although products having a return policy will have a better conversion rate they can also lead to the affiliate’s cash getting debited or completely taken back.

In addition to the payment terms some other conditions that you got to check out are the ‘condition of exclusivity’ (which could mean the affiliate cannot promote any other product except the affiliate product/service or that he should not promote competitor products/services) and conflict resolution method of the merchant.

8.) Additional facilities offered

In addition to simply offering banner ads most good affiliate merchants offer other facilities like, real time sales statistics and tracking information, free training on how to promote the products/services, newsletters, affiliate help lines and even website improvement programs. Some affiliate merchants even offer their affiliates a say in their decision making process.

Many good affiliate merchants also have a policy of rewarding better performing affiliates with incentives, over and above the commissions. Joining such programs can really be a rewarding experience.

To succeed in the affiliate marketing game requires knowledge of promoting goods/services not only through your website but also using other online promotion means like email marketing, online advertisements etc. So, make it a point to do lots of reading and information gathering before plunging into the arena. There are many websites that offer quality resources and information on affiliate programs. Some good ones to refer are http://www.bizbrim.com, affiliate-programs-guide.com and affiliatesdirectory.com.

About the Author

Author Description

http://www.buytemplates.net is a leading web templates provider and has hundreds of great looking, website templates in various categories that come at surprisingly affordable prices. Apart from offering copyrighted and non-copyrighted web templates, this site also offers allied services like custom templates, content insertion service, search engine optimization service.

How To Evaluate An Affiliate Program

2009-10-19T05:53:00.000-07:00

by: Chet Brzezinski

Ok so you think you have found a good affiliate program to promote on your website or in your newsletter? There are some basic things you need to look out for before joining any affiliate program. Some of them may seem minor but those little petty things can cause you to lose hundreds of dollars in affiliate revenue.

Here are some of the basic things to watch out for when joining an affiliate program:

No Affiliate Manager Contact Information
If they don't provide you with a way to contact them about their affiliate program then what are you going to do if you have a problem? Who are you going to email or call if your check doesn't arrive?

Commission Is To Low
Do you really want to spend time on an affiliate program that pays a measely 2%? I see these programs all over. They pitch their affiliate program and make it sound like it is a privelidge to join their affiliate program and earn pennies per sale. I usually stay away from programs that offer less than 8% commission. I will go a little lower if the products sell good and there is a good profit.

Unreasonable Cookie Length
Make sure you find this in their terms or information pages. This is the amount of time that the customer that clicks through your link remains yours. The standard cookie length is 30 days. This means that if your visitor clicks your affiliate link then they have 30 days to buy for you to get credit. You really don't want to promote an affiliate program that offers less than a 30 day cookie length.

Merchant Site Has Traffic Leaks
Probably the most common thing I see with affiliate programs. Mostly from newbie merchants that just got their affiliate program started. Most don't realize what they are doing and usually will correct the problem once I explain to them how traffic leaks are hurting their business and their affiliate program. Traffic leaks are links on the affiliate program site that potential customers can click on and go to other sites... sites that the affiliate won't get credit for if the visitor buys something. Leaks can consist of third-party banner ads, Google AdSense ads, popups, popunders, text links, etc...

No Phone Sale Tracking
With the internet market growing so rapidly every year this means more customers are shopping online. Alot of them will call the merchants 800 number to call in their order instead of submitting it online. Where does this leave you? The merchant gets the cash on the sale while you get stiffed. So when evaluating an affiliate program be sure to check to see if the merchant has measures set up to track phone orders for affiliates. It is simple to set up and it puts the affiliates ID number next to the phone number. So when customers call in they are asked for that number so they can manually credit the appropriate affiliate for the sale.

About the Author

10 Secrets Of The Super-Affiliate Mindset

2009-10-19T05:50:00.001-07:00

By: Affiliate Classroom Teachers

Contrary to popular belief, super-affiliates don’t really DO things differently than affiliate underachievers. Super-affiliates promote the same products. They use the same SEO techniques. They have the same headaches. And they work just as hard.
But super-affiliates THINK differently. Their minds and attitudes go far beyond the commission check. For them, affiliate marketing is not just a business. It’s a CAREER. And that professional mindset makes a huge difference in how and when they take action in the marketplace.
I’ve worked side by side with many super-affiliates. I’ve even helped create a few. They all share a special kind of mindset. So as you read these 10 characteristics of affiliate super-achievers, ask yourself, “Could I learn to think this way?”
#1 – Super-affiliates think creatively.
You know what you’ll get if you do what everyone else does? You’ll get what they get... only you’ll be splitting it with them, and all their imitators.
In today's Internet marketplace, you need to be a leader, not a follower. So super-affiliates don’t follow the crowd. They sell TO the crowd. They take the most successful marketing techniques, apply them to selling the most popular products... and then add a unique spin.
It could be as simple as offering one unusual, but highly valuable bonus. It could be as sensible as using low-cost offline marketing, while everyone else is breaking the bank on expensive PPC. It could be as innovative as dumping the sales letter, and substituting a quiz or contest. But super-affiliates always, always, ALWAYS look for ways to be alittle more creative than their competitors.
#2 – Super-affiliates learn the hard stuff.
Less than 10% of people who start their own business are successful. Why? Most fail because they lack direct sales experience, don’t bother with a marketing and business plan, or get into debt promoting products that don’t have a market. In other words, they flunk when they get tested on the really tough aspects of business.
Super-affiliates are different. They learn how to do all the “hard’ things other people shy away from. They learn about selling and they get good at it. They set goals, make daily and weekly plans, and measure their progress. They don’t waste time creating huge content sites unless they have hard evidence that those sites will eventually bring them BUYERS (not just browsers or researchers).
And most of all, they keep their eye on PROFITABILITY. Not just traffic, not just visitors. Super-affiliates look for a return on their investment of time and effort, as well as money.
#3 – Super-Affiliates follow up.
Most affiliates can attract prospects. A few can convert prospects into customers. But only super-affiliates turn existing customers into repeat customers.
Super-affiliates know that the person who has already bought from you is the most willing prospect for your backend products, upsells, and cross-sells. These current customers are also the cheapest to sell to. So super-affiliates are always thinking of the lifetime value of a customer... and always offering them the best value and deals.
#4 – Super-affiliates give before receiving.
Super-affiliates invest time and money giving something of REAL value. Before they ask for the sale... and before they seal a JV. Maybe they give away useful content. Maybe they offer a valuable resource. Maybe they offer to put in some sweat equity for a piece of the action. Maybe they offer customers a chance to win something... or a smile.
But no matter WHAT they give, super-affiliates do business in a spirit of openness. It’s not about beating the other guy. It’s about networking and making alliances. It’s about viewing the Internet marketplace as one great big “small town.” It’s about saying “let’s talk.” And it’s about putting something – money, effort, or reputation – on the table BEFORE making demands.
#5 – Super-affiliates know how to receive.
Giving is the best first step – but it’s only the beginning. Once they’ve hammered out a deal or given something of value, super-affiliates also know how to take what they rightfully deserve.
That means they don’t just pre-sell... they ASK prospects for the sale. They’re not afraid to capitalize on a good deal. They LIKE profits and don’t apologize for being successful. And if they’re working on a JV, they state their expectations clearly, forthrightly, without a lot of fuss... and don’t de-value their list or reputation with cheesy offers.
Yes, the best super-affiliates receive their just rewards graciously, without throwing their egos around. And they not only say thank you. They look for ways to turn a “thank you” into an opportunity to generate more customer loyalty and more sales down the line.
#6 – Super-affiliates think strategically.
Affiliate marketing isn't a game of chance. It's a profession. Super-affiliates are just as savvy about their industry, and just as uninvolved, as other expert professionals.
Which means super-affiliates spend quality time thinking, planning, preparing, and evaluating. They analyze their sites, products, and sales. They try to understand WHY one technique works and another doesn’t. They think about trends and ponder the mentality of their customers.
Bottom line is, super-affiliates LOVE their work.
#7 – Super-affiliates test and analyze.
Profit, profit, profit... super affiliates are hard-headed about profits! They split-test carefully. They think about WHY one ad pulls better than another... and they try to duplicate the results. They analyze their traffic, stats, and user purchase patterns. They’re fanatics about knowing their visitor to sales ratio on a daily basis. And they’re obsessed with ROI.
If you want to say goodbye to the ranks of affiliate underachievers, learn to love the numbers like the super-affiliates do.
#8 – Super-affiliates know when to go for volume over commission.
Here’s a very well-kept secret of some super-affiliates: you can earn a fantastic income from cheap untargeted traffic. Believe it or not, not every super-affiliate is brilliant at creating content or opt-in marketing. Some just concentrate on traffic -- more and bigger traffic -- and make money off of sheer volume sales and contextual advertising.
Here’s the basic formula, oversimplified of course: Let’s say that on a given web site you get 1000 unique visitors per day, or 30,000 visitors per month. If your average monthly profit from that site is $1500, then each visitor is worth 5 cents ($1500 divided by 30,000 visitors).
So in this example, if you spend 5 cents to attract a visitor, all you can do is break even. But if you can spend a lot less to get a visitor -- say only 2 cents -- you’ve got the potential to make some terrific profits on cheap traffic! Sure, it’s not going to be tightly niched traffic. But it’s also the kind of traffic that fits well with products that have mass-market mass-appeal, or even commodity products.
#9 – Super-affiliates work a plan.
Successful affiliates have a simple business model: they replicate their success. Once they find something that works, they tweak it slightly, test, evaluate, and repeat. Some of the most profitable affiliate empires follow this simple, repetitive pattern. Consistent effort tends to yield consistent results, especially online, where certain types of marketing (like SEO) take time.
And more importantly, super-affiliates follow a schedule. So much activity per month, so many promotions, so many sales. When they fall short of their goals, they figure out why. If they can’t, they cut their losses and try again.
Working a plan all boils down to discipline. Organization, tracking, and daily project management are a way of life for super-affiliates.
#10 – Super-affiliates never quit.
They may ruthlessly dump under-performing products. They may cut their losses if the profits don’t flow. But super-affiliates don’t give up. They assume that they’re going to have some bumps and hard times. They look at setbacks as essential learning experiences that, in the end, help them build a stronger business.

Affiliate Marketing: Another Way to Win

2009-10-19T05:48:00.000-07:00

by Jude Wright

Affiliate Marketing: Another Way to Win
Copyright 2004 Jude Wright All Rights Reserved

You have a nice looking website, full of content. You have links to all your favorite affiliate programs. But - no one is clicking. What else can you do to get someone interested enough to click on the product's sales page?

Did you know that you can have your own affiliate program even if you don't have your own product? Well, you can! Simply join programs that have a 2-tier affiliate program.
.
Here's what to do:

When you add the link from your website to the affiliate program's sales page, also add another link saying "Join this Affiliate Program." The affiliate programs that are 2-tier will provide you with a second link for signing up
your own affiliates. Now, when your "affiliate" sells a product, YOU get a portion of the commission.

Of course, the commission won't be as high, but it's still a commission. And if you have enough affiliates signed up under you, they can be significant.

Sometimes the people who sign up using your send tier affiliate program link will end up purchasing the product themselves. Now you will get a commission from this sale plus you'll commission from any sale your affiliate should make in the future.

Want another idea?

Create a mini-site for just ONE of your affiliate products. Make sure it is one that has an excellent commission structure and a 2-tier program. You won't need to create a lot of different pages with a lot of content because this is a "sales" site - your sales site.

All you need is two pages. On the first page, create your sales copy. Do not use exactly the same sales letter that is used on the sales page for that product. Make it unique. Make it yours. Give it your own twist, your own personality. On this page you will have a link to your affiliate program
to page 2.

Create page two. This page will describe the affiliate program for this product and will have a link to the affiliate program sign-up page for the affiliate program product.

Now, promote this page - your product's affiliate program. An affiliate marketer will sign up for this affiliate program under your affiliate ID. And he or she will make sales. If you can get many "good" affiliates, ones who work hard to promote the product, you will make more on commissions that by actually selling the product yourself.

Another thing to think about is that you could receive residual income from your affiliates. Even if an affiliate stops promoting your affiliate product, it is likely he or she has written articles using their affiliate ID in the resource box for that article. When the article has been submitted to numerous article directory sites, and used by other websites in ezines or as website content, that affiliate ID will still be active. So, you win again!

Also, it will be easier to sign up new affiliates to your affiliate program than it will be to sell the product. Why? Because the affiliate marketer is motivated to make money. And the more money he makes for himself, the more money he makes for you! This is a good thing!

So, don't only think of affiliate marketing websites as content sites. Keep an open mind. Find new ways to promote your affiliate programs - and your affiliate program's affiliate program - to get even more choices for your multiple streams of income.

About the Author

How to Evaluate an Affiliate Program

2009-10-19T05:43:00.000-07:00

by Sanjay Johari

There are thousands of affiliate programs offering wide range of benefits to their affiliates. However, many of these programs and the claims they make are not to be trusted. Good affiliate programs provide tremendous earning opportunities, but they need to be evaluated to distinguish them from doubtful ones. There are several factors to consider before someone decides to join any affiliate program.

Products: Organizations which operate affiliate programs generally have some products to sell. These products can be in form of physical products, e-products or services. It is important to ascertain that the organization has some products to sell and that it recruits affiliates to help them in running their business. One should be very careful with any organization that has recruitment of affiliates as their main business. It is best to avoid such organizations because their affiliate structure is like a house of cards which can crumble at slightest impact.

The organizations which have products to sell and market them thru affiliate programs cut down on the cost of advertising and distribution. This amounts to considerable savings which they share with their affiliates. If a new affiliate is already familiar with the products, this can be helpful but this is not a necessary pre-condition to join affiliate program. New affiliates can learn about the products quite fast.

Organization's Track Record : It is not difficult to find out about the organization before joining it affiliate program. Search engines are one of the sources which can be used for this purpose. Verifying the testimonials presented by the organization is another source of information. The organization should have proven track record of operating their programs for several years successfully. If the organization is new or just starting, the person starting the program should be well known with good credibility. This is precaution against joining organizations which promise get-rich-quick scheme and then disappear.

Support Availble to Affiliates : Most of the new affiliates joining any affiliate program are new to the field of marketing on the internet. They need guidance and support for promoting their business and earning money for themselves. It is in the interest of the organization to help their affiliates to succeed. These organizations are in their business for considerable longer time than the affiliates, are more knowledgeable about their market and about the ways of promoting their products. They are in best position to provide their affiliates with proper guidance. Many organizations have excellent support system by way of trainings, tutorials, articles, books, marketing plans, marketing tools, forums just to name a few. These are generally available from websites accessible to the affiliates.

Apart form the promotional material and information available from the website, personal guidance can be vital. A new affiliate may not be familiar with all the resources available and will look for mentoring at least in initial stages. It should be remembered by the affiliate that her success will add to the success of the organization, the organization is obliged to help her.

Payment : Another factor to consider is the mode and frequency of payment to the affiliates. The affiliate should make sure that this suits her. Just to give an example - many organizations make payments thru PayPal, but PayPal does not transmit money to all the countries. Such details should be checked before putting time and effort for any affiliate program.

Affiliate Structure : There are many different ways in which organizations build up their affiliate structure. Many organizations have single tier structure in which affiliate is only paid commission for sale. Other affiliate structures are 2-level or multi-level deep in which the affiliate earns also from the efforts of personally sponsored members. In turn, the affiliate is expected to help her sponsored members to earn for themselves. This is one great feature of multi-level marketing leading to leveraged earning. You can read my article on leveraged earning at this URL :

http://www.sanjay-j.com/artlever.html

There are still more variations in the structure. Some organizations allow a limited number of affiliates directly under each affiliate. There is no "ideal" affiliate structure. But it is important to have clarity in the structure and the affiliate should understand the structure.

Compensation Plan : There is lot of variation in compensation plans starting from simple commission to more elaborate plan in which affiliates additionally earn thru the efforts of their sponsored downline members and also from a common pool. I personally favor plans which have provision for leveraged earnings where teamwork really counts. Residual earning is another attractive feature of affiliate marketing which can build into sizeable income over a period of time. I am not against any compensation plan so long as it is understandable and appears reasonable. You have perhaps noticed that I have put this factor as the last consideration. However it is an important consideration after all other considerations are found acceptable.

Persistence Pays - It takes time to build up business with any affiliate program, no matter how good the program appears. After joining any affiliate program after thorough evaluation, one needs to stay with the program giving it time to build the earning. Get-rich-quick scheme do work some times but they are rare exception rather than the rule and cannot be depended upon.

This small slogan should be ingrained in the thinking when someone joins an affiliate program:

PERSISTENCE PAYS.

About the Author

============================================
Sanjay Johari contributes articles reglarly to several ezines. His website contains articles, information, ebooks, tools and more for operating home based business.

EUR/USD Analysis

2009-10-19T05:32:00.001-07:00

EUR/USD – 1.4935
EUR/USD: Wave v of (c) may extend to 1.5000

The single currency did resume medium term upmove and our indicated upside target at 1.4910 has been met, price looks set to test psychological resistance at 1.5000 and later to 1.5159 (61.8% projection of 1.3747 to 1.4845 measuring from 1.4480), then towards 1.5280 (100% projection of 1.4045 to 1.4845 measuring from 1.4480).

Our preferred count on the daily chart remains that a wave (B) from 1.2329 is unfolding with A-leg ended at 1.4720, followed by wave B at 1.2457, the wave C from there is also a 3 legged move and is labeled as (a): 1.3739, (b): 1.2885, the wave iii of the 5-waver (c) from 1.2885 has ended at 1.4339 and wave iv is a triangle ended at 1.3878 and wave v is still in progress to aforesaid upside targets.

On the downside, whilst pullback to 1.4830/35 cannot be ruled out, reckon 1.4700 should hold and bring such upmove. Only below 1.4670/75 would suggest a temporary top is possibly formed and bring correction towards 1.4480. A daily close below this level would confirm a temporary top is in place, then fall to 1.4300 and then 1.4200 would follow.

Looking ahead, if euro drops below support area at 1.4177-91, this would provide confirmation that wave v as well as wave (c) has ended and bring correction to 1.4045.

Euro's long-term uptrend started from 0.8228 (26 Oct 2000) with an impulsive structure. The rise from 0.8228 to 0.9593 (5 Jan 2001) is labeled as wave I, the retreat to 0.8352 (6 Jul 2001) is wave II and the rally to 1.3670 (31 Dec 2004) is wave III. Wave IV from there ended at 1.1640 (15 Nov 2005), the subsequent upmove to 1.6040 (July 15, 2008) is treated as wave V, the major selloff from the record high of 1.6040 to 1.2329 (October 27, 2008) signals a correction of the long-term uptrend has taken place with (A) leg ended at 1.2329 and once (B) wave finishes, wave (C) will take euro lower and below 1.2329 confirms and extends to 1.2136 (50% Fibonacci retracement) and 1.2000.

USD/JPY Elliott Wave Analysis

2009-10-19T05:30:00.000-07:00

USD/JPY – 90.59 USD/JPY – Further consolidation in wave 2 would take place

The greenback did rebound last week in line with our expectation, reinforcing our view that a temporary low has been formed at 88.01 and mild upside bias remains for retracement to 91.75 (38.2% Fibonacci retracement of 97.79 to 88.01), however, a daily close above resistance at 92.55 resistance is needed to confirm the c leg as well as wave B has ended and bring stronger rise towards 94.05 (61.8% Fibonacci retracement of 97.79 to 88.01).

We are still keeping our previous preferred count that larger degree wave V has commenced from 124.14 with wave 1 ended at 87.10 and the wave 2 is unfolding with only A leg of wave 2 ended at 101.45 and the decline from there is treated as wave B sub-divided into a double three with first a-b-c ended at 93.85, followed by wave x at 98.90, then another set of a-b-c is unfolding with second a ended at 91.73, second b at 97.79 and second c leg has either ended at 88.23 or may extend one more fall to 88.07 (100% projection of 101.45 to 91.73 measuring from 97.79) and as long as support at 87.10 holds, prospect of another rise in C leg of wave 2 remains.

Our alternate count is that wave 2 ended at 101.45 and wave 3 has commenced from there with wave i ended at 91.73 followed by wave ii at 97.79 and wave iii is still in progress. Once support at 87.10 is broken, this would put this alternate count as our preferred count, then further weakness to 85.00 would be seen.

Looking ahead, a daily close above resistance at 95.07 would add credence to our count that the fall from 101.45 is still the B leg of wave 2, then gain to 96.00 and possibly towards resistance at 97.79 would be seen. Above resistance at 97.79 would confirm the C leg of wave 2 is unfolding for headway towards 99.80-100.00 psychological level and break there would extend rise towards 101.45 and eventual upside target for this C wave of 2 would be 105.62 (50% Fibonacci retracement of wave 1 from 124.14 to 87.10).

On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle is taking place with wave 1 ended at 87.10 earlier this year in January and wave 2 should falter well below 110.67 resistance and bring wave 3 in 2010. Once support at 87.10 is broken, the major downtrend should resume for fall to 85.00, 82.00 but the major low at 79.75 should hold on first attempt.

EUR/JPY Elliott Wave Analysis

2009-10-19T05:28:00.000-07:00

EUR/JPY – 135.75
EUR/JPY: Wave 2 correction from 139.26 ended at 127.00

The single currency rallied after breaking indicated resistance at 132.00/10 and the move gathered momentum thereafter and surged to 136.03 earlier today. This breach of indicated key resistance at 135.49 has reinforced our view that the fall from 138.72 is merely a wave ii correction, which has ended at 129.02 and bullishness remains for subsequent test of 138.72.

Our preferred count remains that the upmove from 112.08 is wave 1 of C has ended at 139.26 with minor wave iii ended at 137.42, followed by triangle wave iv at 126.98, then the move from there to 127.00 is wave 2 with a: 131.42, b: 136.90, wave c: 127.00. The rise from 127.00 to 138.72 suggests the wave 3 has possibly commenced with wave i ended at 138.72 and wave ii has ended at 129.02 and wave iii of 3 is taking place for gain to aforesaid upside targets. Looking ahead, a rise above resistance at 138.72 is needed to add credence to this view for retest of recent high at 139.26 and 140.00.

On the downside, whilst pullback to 134.00 cannot be ruled out, 132.25 should remain intact and bring such an upmove. Loss of latter support would prolong choppy consolidation and risk 131.00 or even 130.00 but support at 139.02 should remain intact.

To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 was ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c type of correction in wave B. The subsequent rally from 112.08 showed impulsive structure, therefore, we labeled it as wave 1 of C.

The long-term downtrend started from calculated price of 359.26 (Dec 1979). The sharp fall from there to 226.60 (Aug 1981) with impulsive structure is labeled as wave I and wave II was capped at 256.59 (Nov 1982). Wave III decline was contained at 140.58 (Feb 1989), the subsequent rebound to 198.59 (Aug 1990) is seen as wave IV, the subsequent 5-wavers decline from there finished at 88.93 (18 Oct 2000). The strong rebound from there to 169.97 (21 Jul 2008) is tentatively viewed as wave A and wave B selloff was followed and is possibly ended at 112.08 (21 Jan 2009). Our alternate count is that entire wave IV correction already ended at 169.97, hence fall to 112.08 would be treated as the wave 1 of V.

USD/CHF Analysis

2009-10-19T05:26:00.000-07:00

USD/CHF – Wave b from 1.2298 should be limited to 1.0000.

The greenback finally resumed medium term decline this week, broke below support at 1.0170 and hit a fresh 2009 low of 1.0119 yesterday, suggesting the (c) leg of larger degree wave b is still in progress and weakness towards 1.0011-39 (previous chart support and 100% projection of (a) leg at 1.0039) cannot be ruled out but reckon psychological support at 1.0000 should limit downside and 0.9900 should hold, bring rebound later this month.

Our preferred count is that early selloff to 0.9630 is an end of the larger degree wave (C) and major correction is unfolding from there with a leg of a larger degree wave A ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b is now in progress in the form of an (a)-(b)-(c) with (a): 1.0370, (b): 1.1967, (c) is still under way (wave i: 1.1160 , wave ii: 1.1742, wave iii is unfolding) for fall to aforesaid downside targets.

On the upside, whilst recovery to 1.0300 cannot be ruled out, only break of resistance at 1.0453 would signal a temporary low is possibly been formed and then correction to 1.0563 would follow. Looking ahead, only break of 1.0885 resistance would confirm and bring test of 1.0935. A daily close above this level would signal the (c) wave has ended and bring test of 1.1026, however, only a break of this level would confirm low has finally been formed and rise towards 1.1290/00 and then the trendline resistance at 1.1400 would follow.

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) which ended at 0.9630 (Mar 2008). Under this count, a major correction is now in progress with a leg of larger degree A ended at 1.2298 and b leg is still in progress but downside is likely to be limited to 1.0000/11 and bring c leg rebound of A in Q4. In the event dollar drops below1.0000, this would suggest only wave III (our alternate count) has ended at 0.9630, then the final wave V of (C) would extend weakness to 0.9500.

Gold as investors’ instrument.

2009-09-30T01:39:00.000-07:00

InstaForex company suggests you to get acquainted with one of the most stable and affective instruments of capital saving. Nowadays almost every interested person can have an access to the world gold market and invest his funds to this precious metal. Moreover gold may be not only as dead weight but also percentage deposit. You may use gold in forward transactions, which gave tangible profit. This is very effective to invest in gold in the period of crises, when other investment instruments can not give the same result.

Gold is the most old and effective measure of capital and wealth dimension. Other precious metals were used for the same purposes. Generations were replacing each other and gold was as measure equivalent and at one and the same time payment facility and commodity for everybody. System of “gold standard” made a great influence on world economy development in XIX-XX centuries. National borders receded in the face of gold and it served as the main world currency system till 70s XX century, due to this operations with precious metals were under strict control. Mostly all transactions were made on the level of states’ monetary authorities and international financial organizations.

However, as a result of contradictions within the system qualitative changes took place and currency rates become floating. As consequence gold’s role was changed, legally it was excluded from the world currency turnover. Liberalization of gold deals began, rights of individuals to physically possession of metals were widen. Market of precious metals was transformed, not only market structure was changed but also its members and spectrum of transactions. Nowadays gold is not more payment facility, however it has not leave the system of economic relationship. Today world gold market constitutes combination of internal and international markets, which are almost not under governments ‘control. All these guarantees 24 hours global trading not only of precious metals but also of their induced instruments.

Demand structure at world market of gold may be nominally divided into 3 sectors: hoarding at all levels, industrial and domestic consumption, speculative operations. Offer consists of precious metals, private and government reserves, processing of secondary raw materials (gold) and illegal traffic.

The main resources of offers are gold producers, main buyers – those who use it for industrial purposes. Both appear at market irregularly due to different factors. However, we will touch upon lifts and recessions in the market of precious metals later.

Gold markets.
International gold markets – located in such cities as Zurich, Hong-Kong, London, New-York, Dubai. High demands are raised to the market participants. They are usually big banks and specialized companies, which have good reputation and credit standing. Spectrum of possible transactions at the international market is rather wide. There are no taxes and customs control. Huge transactions with precious metals are hold 24-hours a day, which give extensive clients’ network. All rules are made by market participants.

Internal gold markets – are markets of one or several countries mostly focused on local investors. They are divided into free and regulated. Free markets are mostly all European markets – for instance, in Milan, Paris, Amsterdam, Frankfurt-on-Main. Regulated – markets mostly of the Third World countries. In internal markets deals are mostly made with small bars and coins, means of payment – native currency.

Black markets – some markets at Asian continent. Their existence is connected with great government limits on transactions with gold. Black markets live in parallel with closed ones. Closed market – the form of internal markets with radical organization, where gold import and export are forbidden and because of taxes precious metals’ trading are not really profitable.

Participants of gold markets.

Gold-workers.
Mostly gold entered market from gold producers. These are small enterprises or big corporations. Companies’ influence on the market depends on the quantity of gold supplies.

Industry.
Industrial and jewellery enterprises, as well as companies which deals with refining (clearing of gold).

Stocks.
In some countries there are special sections at stocks which are busy particularly with precious metals.

Investors.
Investors have different interests at the market and this lead to the investment in different forms. The most popular instrument for investors is CFD.

Banking sector.
National banks are the hugest operators at gold market, they make rules. It should be mentioned, that active sales of reserve gold is not their main goal but demonstrate interest in active usage of reserves. National banks have big influence on the market climate which became especially noticeable in the 90s of XX century.

Intermediary and dealers.
Professional intermediaries and dealers on the gold markets are specialized companies and commercial banks. They are one of the leading hand because almost all the gold firstly goes to their hands.

Physical metal market
The largest amount of operations with physical gold is carrying out in London and Zurich. Firstly predominant part of all gold trading was carrying out in London, which metal delivery from the Commonwealth Nations (mostly Republic of South Africa) promoted to. They were attracted by the skilful organization of precious metals trading. Gold transferred from London to continental Europe and from there forward to the Middle East.

Capital management methods

2009-09-30T01:36:00.000-07:00

When trading on Forex, it is necessary to know how to correctly place your capital; how to calculate the amount of funds needed to make a deal in order to obtain sufficient earnings and if it comes to loss, how to not to loose your entire deposit.

To achieve such goals, there are special capital management methods (money management):

Capital management deficiency. Most traders, when opening a position, don’t calculate the amount of funds that are being used, nor estimate potential earnings, or calculate potential loss. This is one tactic, but if the capital is not very big to begin with, after several unlucky deals, it will completely disappear.
Multiple contracts. When opening several positions on the Forex market with different tools, a trader can make great earnings, for example EURUSD and EURGBP, especially if the price goes in the right direction. But the earnings, as well as the losses, can be considerable.
Fixed amount. Depending on the amount of funds available, a trader decides how much can be put to risk when opening one or another position. The trader then does not exceed this self-set amount when making deals.
Fixed capital interest rate. This method is like the previous one but with one small difference, the trader determines the capital interest rate, but not the amount.

The correspondence between profits and losses. It is necessary to track statistics yourself for all operations (the amount of losses, profits and the relation between them). When you can see the correspondence/correlation between them, you can then apply what you have learned to your trading.
Intersection of the capital curve moving average. Most people are acquainted with moving averages, which can act like signals for going into the market or leaving it. According to this method, moving averages (long and short) are used to forecast deal results. If a short curve is above the long one, a position can be opened and will be profitable. If however it is under the long one, it is better to wait a bit.

Choosing one or another capital management method for trading on Forex can help you correctly use your money on the market and help you earn profit. Capital management methods are used for opening positions.

Risks management methods

2009-09-30T01:34:00.001-07:00

When trading, a Forex investor can multiply capital, and the risks to loose not only potential earnings, but the invested money as well. The deviation from an average expected yield determines the investor’s risk on the financial market.

This kind of deviation can bring high profit as well as great loss.

Financial risk management doesn’t offer a successful trading guarantee, but assembles important parts of it. Each currency operation is a risk. That’s why using general management methods decreases potential loss.

1. Stop-order submission;
2. Capital share investment;
3. Trend line trading;
4. Emotion management.

Risk management methods are used after positions are opened. The main risk management method is an order submission that restrains losses.

Stop-loss (literally means to stop losses) – is a point where a trader goes off the market to avoid a disastrous situation. You have to set a stop-loss when opening positions, in order to prevent losses.
There are several types of stop-signals:

An initial stop signal – determines the deposit amount or interest rate that the trader is ready to lose. When the price moves toward this position and reaches it, the trader’s fixed level position closes, not exceeding the loss preset by the trader.
A “trailing” stop signal – is when a price move towards a position, and a stop signal is set right after it, according to trader preferences. Should the direction change, if the price reaches that signal, the trader goes off the market, potentially earning profit (depending on when the price started moving).
Profit dismantling – is when pure profit has been earned, and the position is closed.
Stop signals at times – is when, in the course of time, the market is not able to earn the necessary profit, then the position closes.

Difference between winners and losers

2009-09-30T01:33:00.001-07:00

Simulated results of more than 20 winning and 30 losing traders.

Most of the things that we do well in our lives we have learned from those who do them well. I learned how to throw a football by watching a player named Race Pauere and how to play handball by watching Paul Harber.

In terms of high technologies, this is called simulation: find a good trader and watch the trader’s every move and seek to understand the principles that make the trader earn profit and how the trader works to achieve this. Then record this winning behavior in your own consciousness and body.

I have spent the last 2-3 years recording conversations from both losers and winners, looking at their lives for not only their trading styles, but their beliefs as well. You can read about some of these traders that I have simulated in books and magazines. Some of the winners are more secret. What a discovery! There is a huge difference between the ways winners and losers trade.
Though maybe, the biggest revelation is that these traders have important similar patterns. Let’s talk about these first.

What they have in common…

Both winners and losers are caught up in the idea of trading. It is their life. For both winners and losers – trading is a passion; and they both are extremists. The biggest loser I know trades with the same energy and intention as any winner. Therefore will and motivation, as distinctive features, are not a part of this equation.

Another thing that they have in common is that they don’t have many close friends of the same sex. Men and women alike usually have not more than one close friend of the same sex. Regardless of whether they are winners or losers, a passionate feature of traders is that they are not very sociable.

The extremism, which I mentioned earlier, saturates their lives. Both groups profess extreme ways of living and trust. They see the world in black and white with few halftones. I suppose that is why losers become so disappointed; they indulge in trading, but since they have been doing everything wrong from the very start; their disasters are many and constant.

And their differences

Let’s take a look at losers. This is what I have found to be common in them.

Most of them are obsessed with the idea of turning XXX,000 into XXX,000,000 and the quicker, the better. Their goal is – quick and great profits. Each one of them has had an inner conversation about their deals prior to opening position, same as several days later for the closing position!

All losers talked about an annoyance that forced them to deal. They couldn’t resist making a deal…it’s a nightmare for those people to have no opened positions and to sit tight. They are happier when they are trading, regardless of whether they win or lose; they would rather be trading than not. They look as if they have caught the trading fever, and that it has spread throughout their bodies.

Other common points exist that deal with trading solutions and capital management. Losers pay less attention to capital management. One of them told me: “The idea of this game is not about capital management, but whether you are right or not.” I have noticed that few of them pay attention to their assets and account balances. They were very surprised when they found out that some track this daily, because they didn’t understand how it is related to the winning opening position.

And finally they asked me if I knew anyone who made money for a living through trading. They seemed very unsure that this was actually possible. They had a lack of faith, even when confronted with proof they regularly receive from financial managers… that profits can be made on a regular basis.

And now let’s talk about winners

Where do I start? To my surprise, winning traders asked me as many questions as I asked them. The losers didn’t question me all that much. None of the winners traded optionally. They all had one or another capital management form and were all technical traders.

Everyone: both men and women could remember one big loss that stayed imprinted on their minds as something that they didn’t ever want to happen again. That’s why they use stops and didn’t “accept deals blindly.” They listened to their “gut” when making deals.

The biggest difference I found was that winners focused their attention on a small number of “favorite” markets. One winner used to trade only soy and nothing else from 1956 on. Losers seemed to change markets and information bulletins so often, just like when I began slipping. While winners researched or bought, losers seemed to be seeking an identity that would pull them up and make money for them.

All winners believed that they would make money and simply denied anything bad that could. They have an aura of protection around them and they simply don’t act impulsively. They are shocked by the information that most of people don’t know the procedures they use. They understand that this is a fairly intense occupation, but they think that anyone with sufficient intelligence can use the same procedures as they use.

The main secret of short-term trading

2009-09-30T01:32:00.000-07:00

The secret is the less you trade, the less you earn.

Sad but true. Think of any investment that you have ever made. Were you able to finish a job in one day? And if you were so lucky, how many times did you do this again? Undoubtedly, very few. That’s because the universal rule of speculation is the same as the universal rule of growth.

We need time to increase profits.

Successful traders know that a one-minute market can move forward a little, in 5 minutes it will move a bit further, and in 60 minutes still more, and who knows how far it will go in one day or in one week. Loosing traders feel like trading only within short periods of time, which automatically narrows their potential profit.

By definition they intentionally limit their profits and go along with unlimited losses. No wonder that so many come up with poor results in short-term trading. They have locked themselves into a hopeless situation, thinking that it is possible to make money during the day just by catching market ups and downs. And this theory seems to be rational, because when you trade within one day and don’t ever leave positions open for a night, you simply don’t rely on news events and major changes, and therefore narrow your risks. And this is incorrect for two reasons.

First of all, your risk is under your control. The only control you have in that business is the control over stop-loss points – the point where positions close. Yes, there is a probability that the next morning market will open with a gap that exceeds your stop (slip past your stop) even though it is a very rare case, but even then you can limit your losses, have stop-loss points and go off of losing deals. Losers stick to losses but not winners.

As soon as you set positions with stop-loss points, you can lose a fixed amount of money. Without any reference to the time your position opens, since your stop-loss point limits your risk. Your risk is the same whether you buy at the all time high point of market or at the all time low point.

Refusing to set positions overnight limits the amount of time that brings investment growth. Sometimes, although the market may open against us, we are still in the right direction, as the market should open in favor of us in most cases.

And what’s more important, when you end trading at the end of the day, or worse at some made-up moment, let’s say, 5 – or 10-minute intervals, you radically narrow your profit potential. Remember I mentioned a big difference between winners and losers, and that losers stuck to their losses? Well another distinction is that winners hold their winning positions, while losers go off the market way too soon. As for losers, they don’t wait for the winning positions: they are so happy to make any profit that they go off the market way too soon (mostly during the day).

You’ll never make big money, until you learn how to stick to winning positions. And the longer you stick to them, the bigger your potential profit can be. When farmers sow fields, they don’t dig the plants up every few minutes to see how they are growing. They let those plants grow and sprout. Traders can learn from this natural process. Trader success is not any different from successful farming. To cultivate successful deals, traders need time as well.

The U.S. stock market review

2009-09-30T01:25:00.001-07:00

The next wave of activity increase in the mergers and acquisitions sector on Monday restored the investors propensity to risk and their stocks demand that helped Dow Jones Industrial Average index to grow more than by 100 points. Increase of analysts ratings promoted growth of Cisco, Citigroup and some other companies stock quotes both in technological, and in financial sector.

As it happened time and again, the increase in sector was noted on Monday. The Xerox agreement on Affiliated Computer Services purchase became significant for securities of the companies with the big capitalization. Initial cost of the deal is estimated in 6,4 bln dollars. Xerox shares fell by 1,29 dollars or 14 %, to 7,68 dollars, and Affiliated Computer shares grew by 6,61 dollars or 14 %, to 53,86 dollars.

Dow Jones Industrial Average moved upward by 124,17 points or 1,28 %, to 9789,36 points. Standard and Poor's 500 rose by 18,60 points or 1,78 %, to 1062,98 points, also having interrupted the 3-days falling. Nasdaq Composite surged by 39,82 points or 1,9 %, to 2130,74 points. It is the most considerable index growth following the results of day in points and in percentage more than for two months. The technological sector is on of the leading among the S&P 500 components one. Securities of this sector rose in price by 1,7 %.

Cisco Systems shares have become one of the leaders of growth the technological companies stocks, they ticked up by 99 cents or 4,4 %, to 23,61 dollars after in Barclays raised their rating to “above the market” from “on a level with the market” owing to the prospects of company business improvement in Europe and the North America.

Among the S&P 500 components most favorable dynamics was shown by the financial companies stocks after Morgan Stanley analysts presented the forecast according to which banks credits losses will decrease in the following 12-18 months.

Regards,

Analyst: Vladimir Donin

Analytical review of the EUR/USD currency pair for 28.09.09.

2009-09-30T01:22:00.000-07:00

Monday's trades passed in a rather calm way. The absence of important macroeconomic statistics and a steady stock market did not lead to any significant changes in the currency pair EUR/USD. With the opening of the trading session there was a slight drop of the Euro from its Friday's highs to the level of 1.4567. It mainly can be connected with a little way latecomer Asian market which could not properly respond for the US dollar strengthening and also with an obvious Euro overbought to the previous trading session closing. During the European trading session we saw how the pair had been gradually reestablishing its lost positions and was able to reach the level of 1.4681, where it was met by the 200 day exponential moving average. To what it had led, you saw by yourselves – another decrease to the base of the 46th figure and the closure near this area. Totally, the US dollar grew against the European currency by 79 points. The trading volume was also at a high level, despite the first trading day of the week.

The publication of German CPI became the key insight at the yesterday's deals, which lowered to -0.40% versus the growth to 0.20% at the beginning of September. Remind you, that the Consumer price index (CPI) determines the inflation expansion rate level amid the consumer demand for goods and services. The uptrend has a positive impact to the national currency. On the other hand, it is worth mentioning the lack of inflation risk in the Europe's largest economy.

Concerning yesterday's ECB President Trichet speech, I want to notice some features. The first one is that Banks have to accredit the real economy. Secondarily, the ECB president announced that the policy of a strong dollar on the part of the USA is very important. In conclusion, it was told about the European economy recovery in the coming months, which unfortunately would be slower, than expected.

A slight strengthening of oil futures during Monday deals imparted the confidence to several major investors. It was expressed in testing of the first resistance levels at the European trading session.

Speaking about the technical picture, I want to mention a few main features. Yesterday's pair decrease to the upper bound of ascending price channel of August,13 was met by a strong support level, which also resisted during the second decline to the end of American trading session and at the opening of the Asian one today. As we can see, each testing of this level by the pair was accompanied by a sharp rebound to the level of 1.4638, which could be determined as the first resistance level. The next possible target for the pair will be the 200 day exponential moving average, which is currently located at 1.4672, near more serious resistance level of 1.4680.

The pair's entrance to the sideways trend is observed on the MACD indicator, as this indicator has come close by to the zero mark. Bollinger bands are located in a parallel way to each other, but with a high liquidity position.

Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4647 with the target – T/P 1.4690 and S/L 1.4621.
Sell the pair at 1-hour timeframe closing below 1.4585 with the target – T/P 1.4522 and S/L 1.4619.

Best regards,
Analyst: M.A.Magdalinin.

Analysis of the EUR/USD

2009-09-30T01:17:00.000-07:00

Typical Friday trading revealed its true colours. The first growth attempts in the European grounds opening were accompanied by the US dollar purchase that led to the pair's lowering almost to the session low which was fixed at the Asian market at 1.4617. Thereafter, followed a slight increase amid the US housing market data release, which showed sales tick up that caused the Euro strengthening against the greenback. By the trades closing the pair rallied from the opening level by 22 points that allowed the bulls to gain a victory.

Now, a piece of Eurozone fundamental review. GfK German consumer climate jumped from the last month reading of 3.80 to 4.30, coming in higher than the experts forecasts, which expected the index to remain unchanged. Money supply M3 contracted to 2.50% versus 3.00% month earlier.The economists were waiting for a decline just to 2.70%. This indicator drop puts pressure on the European currency. Last year indexes were at 9.30%. Italy retail sales saw no changes and stayed at -0.4%, compared to the last period, and the private lending has almost touched zero level reaching 0.10% against 0.70% in the last month. Durable goods orders, which exclude the transportation factors and defence industry orders in the USA, did not show any changes in comparison with the last period and stood at 0.00% versus 1.10%. The experts were looking for a slowdown to 0.90%. Durable goods orders including the transport costs, also fell to -2.40% versus strong uprise of 5.1% witnessed in the last month. Such diversified data was the reason of significant fluctuations in the market due to absence of major investors single view concerning the current situation. The Michigan University Sentiment Index demonstrated a moderate tick up to 73.50, despite all predictions. And the key factor for the European currency rally turned out to be the new home sales data, not coming in line with the experts estimates and rose to 429000 versus 426000 in the preceding month.

Concerning the technical pattern, worth pointing out that break through of the rising price channel of August 31 on Thursday affirmed itself during the Friday trading, as any trials of the pair's uptick to existing resistance level were promoting a huge Euro sale versus the American currency. As we could see, such sale took place three times, taking into account the Asian session where was seen the other resistance level testing at 1.4715 that resulted in considerable Euro slump. There are also two strong support levels, the first one— at 61.8% correctional Fibo level, which takes its rise from the August market fall last year, the second — the upper bound of up-going price channel of August 13, 2009, which used to be a resistance.

To sum up, I should notice that presently, the pair managed to break through below 200-day exponential moving average constructed at 1-hour graph, so I would not not recommend to expect the pair lowering continuation.

Today, I recommend to buy the pair at 1-hour timeframe closing above 1.4658 with the target – T/P 1.4724 and S/L 1.4612

Sell the pair at 1-hour timeframe closing below 1.4562 with the target – T/P 1.4522 and S/L 1.4608

Best regards,

Analyst: M.A.Magdalinin

Pound Hit on BoE Easing Talk

2009-09-17T10:44:00.000-07:00

Pound Hit on BoE Easing Talk
by Korman Tam

The greenback was higher against the pound, rising to 1.64-figure and pushing the euro back towards the 1.46-level. Several key US economic reports were released this morning, including retail sales, producer price index and the New York Fed manufacturing survey. Retail sales in August were sharply higher than expected, with the headline figure jumping by 2.7% versus a revised 0.2% decline in July and the excluding automobiles retail sales report increasing by 1.1% compared with a revised 0.5% decline in the previous month. The September NY Fed manufacturing survey was also sharply better than forecast, rising to 18.88, beating calls for an improvement to 14.0 from 12.08 a month prior.

King pounds Sterling

The British pound plunged by over 200-pips in early Tuesday trading, slammed by commentary from Bank of England Governor Mervyn King. In King’s Parliamentary testimony, he hinted at further cutting the bank deposit rate, suggesting that the BoE was mulling over “reducing the remuneration” of bank reserves and that it would be a “useful supplement” to stimulate the ailing UK economy. While King expressed optimism that the sharp deterioration in economic fundamentals may have passed, he also added, “the strength and sustainability of the recovery is highly uncertain and the balance of risks to inflation around the 2% target remains on the downside”.

Economic data released from the UK overnight reaffirmed BoE Governor King’s outlook on inflation, with August CPI relatively tame, up 0.4% on a monthly basis and up 1.6% on an annualized basis. Meanwhile, the retail price index for August increased by 0.5% versus a flat reading in the previous month and posting a 1.3% decline versus a 1.4% drop a year earlier.

Cable stabilized just above the 1.64-level, hovering near 1.6430. Resistance is seen at 1.6460, followed by 1.65 and 1.6550. Additional ceilings are seen at 1.6580, backed by 1.66 and 1.6630. On the downside, support begins at 1.64, followed by 1.6370 and 1.6340. Subsequent floors are eyed at 1.63, followed by 1.6250 and 1.62.

Euro Sideways

The euro drifted sideways despite a softer than expected report on Germany’s sentiment survey, hovering just above the 1.46-level. Germany’s ZEW expectations survey jumped to its highest level in 3-years to 57.7 in September from 56.1 in August, albeit less than forecasts for a stronger improvement to 60.0. The ZEW current conditions index improved by less than forecast at -74.0, compared with -77.0 in the previous month and missing calls for an improvement to -68.0.

EURUSD holds steady around 1.46, with resistance beginning at 1.4650, followed by 1.47 and 1.4740. Additional ceilings will emerge 1.4770, followed by 1.48 and 1.4830. Support starts at 1.46, followed by 1.4560 and 1.4530. Subsequent floors are seen at 1.45, followed by 1.4450 and 1.44.

USD Edges Higher

2009-09-17T10:42:00.000-07:00

USD Edges Higher
by Korman Tam

The dollar edged up higher against the euro and sterling, while sliding against the yen at the start of the week. Oil and gold eased early in the session, slipping to $68.22 per barrel and $992.9 per ounce, while the US equity bourses were marginally higher.

The US economic calendar kicks off with several releases tomorrow, including August PPI, retail sales, July business inventory and the September NY Fed manufacturing survey. The headline retail sales figure is estimated to post a dramatic improvement in August, increasing by 1.2% versus a 0.1% decline a month prior, while the excluding-automobiles retail sales figure is seen rising by 0.3% from a 0.6% decline in July.

Euro Steady above 1.46

The euro pulled off its session highs near 1.4650 but held steady above the 1.46-figure. The Eurozone July industrial production figures improved to 2.1% versus 1.9% from the previous month, while improving to -15.9% from -17.0% a year prior. Meanwhile, Q2 employment declined by 0.5% on a quarterly basis, while falling by 1.8% on an annualized basis.

In the session ahead, the key highlight will be Germany’s ZEW sentiment survey is seen improving to -67.1 in September from -77.2 in August, while the economic sentiment component is estimated to improve to 62.0 from 56.1.

EURUSD will find support at 1.46, followed by 1.4570 and 1.4540. Subsequent floors are eyed at 1.45, backed by 1.4460 and 1.4420. On the upside, resistance begins at 1.4650, followed by 1.4680 and 1.47. Additional ceilings are seen at 1.4730, backed by 1.4760 and 1.48.

USD Slides vs GBP, CHF

2009-09-17T10:40:00.000-07:00

USD Slides vs GBP, CHF
by Korman Tam

The greenback was weaker against the British pound, falling to its lowest level in a month to 1.6676 and tumbling to its lowest level since December 2008 versus the Swiss franc at 1.0367. The US economic releases saw weekly jobless claims, which improved to 550k from 570k and the July trade deficit. The deficit figures revealed an increase in July to $31.96 billion versus the June reading at $27.49 billion.

The reports due out on Friday include July wholesale inventory, wholesale sales and the September University of Michigan consumer confidence survey. The preliminary confidence report is seen marginally lower to 65.3 from 65.7 while the current component edging up slightly to 67.0 from 66.6.

Sterling Rallies

The pound jumped to its highest level since August against the dollar at 1.6676 on the heels of the Bank of England’s monetary policy announcement earlier in the session. The BoE, as expected, held its benchmark lending rate unchanged at 0.5% and maintained its asset-purchase plan at its current level at 175 billion pounds.

Cable was initially softer just prior to the policy announcement as traders were factoring the possibility of a bump in the Bank’s asset purchase plan. When it was revealed that the BoE would stand pat, the market pushed the pound higher on hopes that the UK economy may be bottoming out and policy will likely remain unchanged for the coming months.

Interim resistance in the pair will emerge at 1.6675, followed by 1.67 and 1.6740. Subsequent ceilings are eyed at 1.6770, backed by 1.68 and 1.6830. On the downside, support starts at 1.6620, followed by 1.66 and 1.6560. Additional floors will emerge at 1.6530, backed by 1.65 and 1.6465.

Swissie Whipsaws on Intervention Fears

The Swiss franc whipsawed against the dollar and euro amid rumors that the SNB would intervene in the foreign exchange market to halt to currency’s strength. The SNB declined to comment on whether it had intervened, with traders pushing the Swissie higher from 1.0464 to its highest level since December 2008 at 1.0359.

USD Tumbles to Lowest Levels of 2009

2009-09-17T10:38:00.000-07:00

USD Tumbles to Lowest Levels of 2009
by Korman Tam

The dollar fell to its lowest level of the year as traders returned from the Labor Day holiday, relinquishing the 1.45-level against the euro and sliding to 1.6586 versus the British pound. Commodities continued to test higher at the start of the week, with spot gold breaching the key resistance level of $1,000 per ounce and crude oil firming above the $70 per barrel mark to $71.20. Meanwhile, the Asian equity bourses climbed higher overnight, with Hong Kong’s Hang Seng index rallying by over 2% and the Shanghai Composite gaining by 1.7%.

The US economic calendar is light for most of this week as the majority of the releases are slated for Friday. Weekly jobless claims, which are due on Thursday, are expected to improve marginally to 560k from 570k a week prior. On Friday, the data to be released consists of July wholesale inventory, wholesale sales, and the University of Michigan consumer confidence survey. The wholesale sales reading is estimated to edge up to 0.6% in July from 0.4% a month prior, while the wholesale inventory figure is seen posting a 1.0% decline, albeit improving from a decline of 1.7% previously. The preliminary reading for the September University of Michigan consumer confidence survey is largely unchanged, seen slipping marginally lower to 65.3 from 65.7 in August and the expectations component is estimated to ease to 64.2 from 65.0.

Euro buoyed above 1.45

The euro jumped to its highest level in 2009 above the 1.45-level to 1.4534 as traders shifted back into riskier assets. Germany’s July trade surplus was better than expected, climbing by more than forecasts to 12.4 billion euros and beating out estimates for an improvement to 11.7 billion euros from 11.0 billion euros in June. In the coming session, traders will turn to Germany’s August HICP and CPI figures, due out at 2:00 AM.

EURUSD will encounter interim resistance at 1.4540, followed by 1.4570 and 1.46. Subsequent ceilings are eyed at 1.4630, backed by 1.4660 and 1.47. On the downside, support will start at 1.45, backed by 1.4450 and 1.44. Subsequent floors are seen at 1.4360, followed by 1.4320 and 1.43.

USD Edges Higher, Eyes Jobs

2009-09-17T10:36:00.000-07:00

USD Edges Higher, Eyes Jobs
by Korman Tam

The dollar climbed higher against the majors on softer US economic reports, pushing the euro to 1.4245 and the Loonie toward 1.1072. Weekly jobless claims were unchanged from the previous week, missing forecasts for a decline to 560k, instead holding steady at 570k. Meanwhile, the August non-manufacturing ISM figure improved by more than forecast, edging up to 48.4 and beating estimates for an increase to 48.0 from 46.4 in the previous month.

The key highlight for this week will be the August labor data, scheduled for release at 8:30 AM on Friday. The market expects the August unemployment rate to creep up to 9.5% from 9.4% in July. The non-farm payrolls are expected to improve further to post a loss of 230k jobs, compared with 247k jobs shed a month prior.

The G-20 Finance Ministers meeting kicks off this weekend in London. US Treasury Secretary Tim Geithner had prefaced the meeting yesterday, saying “this is a stock-taking meeting not a new-initiatives meeting”, adding that “the important thing to do is to try to figure out what cooperative framework or phased differentiated withdrawal of support is going to be appropriate”. The agenda seems to be focused on European government curbs on banking bonuses.

Euro Drifts Lower

The euro drifted lower against the greenback, sliding to 1.4237. The ECB left monetary policy unchanged when it announced its decision earlier in the session, keeping rates steady at 1.0%. In the subsequent press conference by Bank President Trichet, he stressed that current interest rates remain appropriate, with inflation to remain subdued. Moreover, he said that there are increasing signs that the global recession is bottoming out and global policy stimulus should support growth. Trichet suggested that interest rates will likely remain unchanged for the medium-term, emphasizing inflation expectations are firmly anchored and that risks to growth outlook and inflation expectations remain balanced.

EURUSD holds steady near 1.4240, with support seen at 1.42, backed by 1.4160 and 1.4130. Subsequent floors are eyed at 1.41, followed by 1.4050 and 1.40. On the upside, resistance is seen at 1.4270, followed by 1.43 and 1.4350. Additional ceilings are eyed at 1.4380, backed by 1.44 and 1.4440.

Upbeat US Data amid Lackluster FX

2009-09-17T10:34:00.000-07:00

Upbeat US Data amid Lackluster FX
by Korman Tam

The dollar was mixed against the majors in the Wednesday session, largely confined within recent ranges in lackluster trading. The greenback recovered from its session lows versus the euro at 1.4350 to hover near the 1.4230-level, while pushing the Canadian dollar just shy of the 1.10-figure.

New home sales posted a strong reading in July, surging by its largest figure in nearly 4-years, up by 9.6% to 433k units versus 384k units from June. Building permits were drifted by 1.1% to 564k units in July. Meanwhile, durable goods orders were sharply better than expected, posting a gain of 4.9% versus a 2.2% decline a month earlier in June. The excluding transports July durable goods orders also improved, edging higher by 0.8% compared with a 1.6% increase a month earlier.

In the coming session, traders will look ahead to weekly jobless claims and more importantly, the preliminary reading for Q2 GDP. Weekly jobless claims are expected improve to 565k from 576k a week earlier. Meanwhile, economic growth in the second quarter is expected to post a 1.4% contraction, deteriorating further from a 1.0% contraction in the previous quarter. The Q2 PCE is expected to hold steady at 1.3%.

Euro Trades Sideways

The euro continues to hover around the 1.4240 figure after pulling back from the session high near 1.4350. Eurozone economic reports released overnight saw Germany’s August Ifo index improved by more than expected to 90.5 from 87.3 in July while the expectations index jumped to 95.0 from 90.4. Germany’s CPI figures are due out in early Thursday trading and are seen remaining tempered in August.

EURUSD trades sideways, remaining confined within recent ranges. Interim resistance is seen at 1.4270, followed by 1.43 and 1.4350. Subsequent ceilings are eyed at 1.4380, backed by 1.44 and 1.4440. On the downside, support begins at 1.42, followed by 1.4160 and 1.4120. Additional floors will emerge at 1.41, followed by 1.4065 and 1.4030.

FX Drifts, Focus on Central Banks

2009-09-17T10:31:00.000-07:00

FX Drifts, Focus on Central Banks
by Korman Tam

With little economic data released at the start of the week, the focus in the currency market has shifted to Central Bank rhetoric, with the key highlights attributed to commentary from Fed Chairman Ben Bernanke and ECB President Jean-Claude Trichet. Speaking from the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke offered an optimistic assessment over the economic outlook saying, “economic activity appears to be leveling out, both in the US and abroad, and the prospects for a return to growth in the near-term appear good”. His upbeat outlook spurred on gains in the equity and commodities markets, while pushing the dollar slightly lower against the majors.

Meanwhile, ECB President Trichet sounded a cautious tone over the economic outlook for the Eurozone, suggesting that interest rates will likely remain low for a protracted length of time. He said, “We see signs confirming that the real economy is starting to get out of the period of freefall”, yet it “does not mean at all that we do not have a very bump road ahead of us”.

Nonetheless, the major currency pairs continue to drift in a lackluster manner as the summer doldrums have confined foreign exchange to rangebound trading. We remain biased for further dollar weakness in the coming weeks as economic data from the US continue to gradually improve and support the equity markets.

Euro Drifts Lower

The euro was confined within range at the start of the week in a lackluster session, with the single currency drifting slightly lower against the greenback overnight. The economic data released saw June industrial orders, which posted a steep improvement, up 3.1% versus a 0.2% decline in the previous month and improving to -25.1% from -30.1%.

In the coming session, data slated for release include Germany’s import prices and Germany’s Q2 GDP. Growth in the Eurozone’s largest economy is seen expanding by 0.3% versus the previous quarter and contracting by 5.9% from the previous year.

EURUSD holds steady just beneath the 1.43-level with interim resistance seen at 1.4330, followed by 1.4360 and 1.44. Subsequent ceilings are eyed at 1.4440, backed by 1.4470 and 1.45. Support is seen at 1.4280, followed by 1.4230 and 1.42. Additional floors will emerge at 1.4150, followed by 1.41 and 1.4070.

USD Drifts Lower on Mixed Data

2009-09-17T10:29:00.000-07:00

USD Drifts Lower on Mixed Data
by Korman Tam

The major currencies were mixed in the Thursday session as US equities edged up marginally into positive territory, following a sharp rebound in the Shanghai Composite – which rallied by 4.52% overnight. The dollar eased lower against the euro and pound but largely remained confined within its recent range while the yen also relinquished some of its recent strength.

The Philadelphia Fed manufacturing index improved by more than forecast in August, expanding to a reading of 4.2 and beating estimates for an improvement to -2.0 from -7.0 in July. Meanwhile, the leading economic indicators index fell short of consensus forecasts for an unchanged monthly reading at 0.7%, instead slipping to 0.6%. Weekly jobless claims were also slightly higher than the prior week, edging up to 576k from 558k previously.

The economic calendar for Friday is light, with just the release of existing home sales due out at 8:30 AM. Existing home sales are seen increasing by 2.3% to 4.99 million units in July, versus 4.89 million units a month earlier.

Sterling Tops 1.66

The British pound climbed back above the 1.66-figure overnight following a stronger than expected report on UK retail sales in July. The report edged out expectations with annualized retail sales increasing by 3.3% versus 2.9% in the previous year and holding steady at 1.2% on a monthly basis. Also, the UK revealed its largest budget deficit on record at 8 billion pounds in July versus a 5.2 billion surplus a year earlier. The ballooning deficit figures will likely weigh heavily on the pound over the coming months.

Cable has since relinquished some of its earlier gains, slipping back to the 1.65-figure and lower from its session high at 1.6605. Support is seen at 1.6460, followed by 1.6430 and 1.64. Additional floors will emerge at 1.6370, backed by 1.6340 and 1.63. Meanwhile, interim resistance is eyed at 1.6550, followed by 1.66 and 1.6640. Subsequent ceilings are seen at 1.6670, followed by 1.67 and 1.6730.

EURO: At Key Levels Against the U.S. dollar

2009-09-17T10:22:00.000-07:00

Key Levels Against the U.S. dollar

by Angelo Airaghi [Guest Analyst]

9/8/2009

The Federal Reserve and the European Central Bank should keep rates steady for the first part of 2010 as well, since the economic recovery remains fragile in some sectors and inflation is low. The Euro is once again at key resistance lines against the U.S. dollar. A breakout would possibly set the currency for a strong move up.

U.S.: Some improvements, but not enough

Growth remains weak in the United States, but sings of improvement are showing at various levels of the economy. Housing has clearly found a bottom, while consumer confidence has increased slightly in the recent months. For the first time since 20007, the ISM manufacturing survey moved up to 52.9 in August from 48.9 the previous month. New orders rose to 64.9 from 55.3, marking the strongest gain since 2004. The ISM services climbed instead to 48.4 from 46.4 in July. Nevertheless, the price paid component jumped to 63.1 from 41.3, thus anticipating some inflationary pressure ahead. The Federal Reserve is expected to keep rates accommodative the first part of 2010 as well, since the recovery is still very fragile and household savings weak.

In effect, after having topped in January of 2009 (-741,000), nonfarm payrolls declined 216,000 in August. The previous two months were revised down a cumulative of 49,000. The fall was broadly based with manufacturing and construction registering the heaviest losses. Since the financial crisis began, almost 7.0 million people have been out of work, the worst numbers of the past fifty-years. At the contrary, temporary job data continued to improve, eventually anticipating some stabilization in the job market over the medium term. Nonetheless, the short term picture stays critical. The unemployment rate is now 9.7% (a twenty-six year high) from 9.4% the previous month.

Europe: Unemployment increasing more?

The European Central Bank’s meeting of last week was once more a non-event. The ECB will keep rates low for now, albeit it will not postpone the 12-month long term refinancing operation after September 30th. Mr. Trichet was more positive about the economics’ outlook, although uncertainty remains very high. The European economy fell 0.1% in the second quarter, less than the U.S. decline, after having slumped 2.5% in the first three months of the year. The Gross Domestic Product (GDP) has been shrinking for five straight quarters in the Euro zone. Nonetheless, German and French GDP improved lately and they might increase more in the coming months. German incentive plan to workers has mitigated unemployment so far, although the decline should continue for the first part of 2010 as well.

Inflation stays mild for now, the PPI fell 0.8% in July, but it should again pick up sometimes next year. Commodity prices are expected to rise from the lows, as a better economic picture will increase demand for raw materials. The Purchasing Manger’s Index for the Euro zone reached a fourteen month’s high in August, despite remaining below the benchmark of 50 for the longest period in history. Improvements were broad-based with only Spain and Ireland staying behind. The PMI service rose instead to 49.9 from 45.7. In Germany, the index is now above 53.0 and pointing to expansion.

EUR/USD: Trying the resume the long-term uptrend.

EUR/USD: The Euro is again at crucial technical and seasonal levels. They are at the conjunction of various resistance points and will support the Euro to better prices, if broken. As result, a move above 1.4610 would target 1.48, 1.50. A breakout failure would instead take the price back again to 1.4050.

GBP/USD: The pound has found a good support at 1.61. It corresponds to the lower
Bollinger bands and the 100 MA. However, a move above 1.654 is necessary for 1.66, 1.67. A decline below 1.5990 would instead target 1.59, 1.57.

USD/JPY: The market is trading between 98.00 and 91.50. We are currently at the support line. A rebound to 93.80 is possible. Nevertheless, a move below 90.7 would target 90.00.

USD/CAD: The market has found a strong resistance at 1.11 and could now correct to 1.0830, eventually 1.0630, if it could move below 1.0695. A breakout failure would take the price to 1.0940 again.

Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media.

U.S dollar: Looking For The Line of Least Resistance

2009-09-17T10:20:00.000-07:00

U.S dollar: Looking For The Line of Least Resistance

by Angelo Airaghi [Guest Analyst]

9/1/2009

As housing continues to improve, unemployment could rise again in the coming months. In Germany, confidence is growing, while the economy might take advantage of global growth.

U.S.: housing is back?

Unemployment remains the biggest challenge for the U.S. economy, despite losses declining to 220,000 from 247,000 in July. In reality, we are experiencing the lowest job contraction in more than a year, but the unemployment rate could again rise due to the slow recovery in the last part of 2009. At the contrary, the real estate market is confirming the good trend and it is expected to positively contribute to the Gross Domestic Product (GDP) numbers, along with inventory growth for various goods. In July, new home sales moved up 9.6% year-on-year to 433,000 units from June’s 395,000. It has been the fourth consecutive monthly increase and the largest gain since February of 2005. With three regions out of four posting good results, inventories are now 7.5 months supply from 8.5 months in June, far away from the peak of 12.4 months reached in January.

Nevertheless, the number of vacant houses is almost 2 million compared to the average of about 300.000, while the mortgage delinquency stays high for now. This should keep the residential construction mild, at least for the short term, although the long period of decline has definitely ended. The rebound of stocks and home sales are increasing consumer confidence. In August, the Conference Board’s consumer confidence index rose to 54.1, almost doubling the all time low registered in February. In July, durable goods new orders moved instead up 4.9% month-on-month from 1.3% in June. Non-defense aircraft and parts orders climbed 107.2%, after having declined 30% in June and having increase 60.4 in May.

Germany: economic expectation on the rise

Confirming the positive trend of last week’s ZEW and PMI in Germany, the IFO economic expectations index rose to 95.0 in August from 90.4 in July. It has been the sharpest up move since reunification and it represents the eight straight months of gains. The IFO index moved instead up to 90.5 from 87.4 with market expectations rising to 86.1 from 84.4. Wholesale led the way, along with manufacturing, while construction remained weak once more. In effect, things are moving again in the old continent although improvements are volatile for now.

In June, industrial new orders rose 3.1% month-on-month in the Euro zone after having declined 0.5% in May. However, orders fell 25.1% annually. The European economy slid only 0.1% in the second quarter, following a loss of 2.5% in the first, and it is expected to stabilize in the last part of this year, as the global economies are again moving toward growth. Germany could increase around 1.0% by year-end, despite the unemployment rate remaining negative for the largest European’s economy. The European Central Bank (ECB) will leave rates low for an extensive period of time, but it should increase them again, once the economic growth will resume its course.

EUR/USD: Testing key resistance lines.

EUR/USD: The Euro is again at crucial technical levels. They correspond to the resistance line of the past 12 months and will support the Euro to higher prices, if broken. A move above 1.4580 would target 1.4660, 1.4740. A decline below 1.3950 is instead necessary for 1.39, 13820.

GBP/USD: A move below 1.6090 would target 1.6020. A breakout above 1.6650 would take the price to 1.6700.

USD/JPY: The market is trading between 98.00 and 91.00. A move above 95.50 could target 96.00. A decline below 92.70 could instead take to price to 91.50.

USD/CAD: A move below 1.0550 is necessary for 1.04. A swing above 1.124 would instead target 1.13.

U.S.: Unemployment’s Rate is the Achilles Heel

2009-09-17T10:19:00.000-07:00

U.S.: Unemployment’s Rate is the Achilles Heel

by Angelo Airaghi [Guest Analyst]

8/26/2009

As housing is giving some relief to household pockets, the Federal Reserve warns about a slow recovery. The Euro, in the mean time, is testing key resistance levels against the U.S. dollar.

U.S.: housing still supportive

Tangible signs of improvements are beginning to show up, albeit the recovery remains fragile in the United States. In July, the conference board index increased 0.6% month-on-month from + 0.8% in June. It was the fourth consecutive month of increase, giving further prove that the U.S. economy might have bottomed. In a speech at the Jackson Hole Symposium, Fed Chairman Bernanke confirmed that the worst might be over for global economies, thus indirectly anticipating a safe-haven demand’s decline for U.S. dollars and Treasuries in the coming months. Nonetheless, the Federal Reserve will keep rates low for the first part of 2010 with inflation so mild. In July, the producer price index (PPI) fell 0.9% versus the expected -0.4%. In reality, after two months of gains, 6.5% in June and 15% in May, housing starts slid by 1.0% in July to 581,000 annualized (+2.5% expected). Nevertheless, singles component (three-quarters of the market) rose 1.7%, while multiple houses declined 13.3%. Starts are still above the average of the first three months of the year, although away from the over 2 million produced in 2005.

Existing home sales increased at the contrary by 7.2% (+2.0% expected) to 5.24 million in July from 4.89 million in June. Inventories remained unchanged at 9.4 months of supply. However, both single homes and condos improved. The first climbed by 6.5% and the second by 12.5%. Clearly, the first-time homebuyers tax credit program, which allows first time buyers to receive a refundable credit of USD 8.000.-. (10% of the home value, if lower) until December 1st, have helped home sales. Nonetheless, the positive domino’s effect created by the activity in the housing sectors could continue in the future as well supported by low interest rates and affordable prices. Home ownership remains an American dream. Consequently, a bipartisan group of U.S. senators are requesting that the tax credit program to be renewed for an extensive period of time.

Is the German’s recovery sustainable?

The decrease of inventories and the rise of exports, the European trade balance registered a surplus of Euro 4.6 million in June from Euro 2.1 billion in May, are helping the European economy out of the recession. This is what stands out from the latest data, albeit the recovery might be slow and fragmented. In effect, after improving for six straight months since February, the Euro zone composite Purchasing Manager’s Index finally climbed to the critical level of 50 in August. The manufacturing sector printed 47.9 from 46.3, while the services PMI showed 49.5 from 45.7. In Germany, the composite index was 54.2 in August from 49.0 in July, the highest level in more than one year. In France, it rose instead to 50.9.

The Euro zone Gross Domestic Product (GDP) declined only an estimate of 0.1% in the second quarter from the 2.5%, while in Germany and France, the GDP increased 0.3%. The German’s economic sentiment index from the ZEW center of Economic Research climbed to 56.1 in August, way above the average of 26.5. However the current economic situation index, which rose only to -82.1 points, testifies how Germans remain prudent over the health of the economy. In fact, the European Central Bank is warning that the German rebound might have been exacerbated by the economic measures introduced this year and could not be sustainable over the short term. As a result, ECB will keep rates low for now, the Producer Price Index (PPI) fell almost 8.0% year-on-year in July, and might increase them again once the economic momentum will trend higher.

EUR/USD: Testing key resistance lines.
EUR/USD: The Euro is again at crucial technical levels. A move above 1.4560 would target 1.4620, 1.4740. A decline below 1.3750 is instead necessary for 1.3550.
GBP/USD: A move below 1.6125 would target 1.6020. A breakout above 1.6820 would take the price to 1.6880.
USD/JPY: The market is trading between 98.00 and 92.00. A move above 95.40 could target 96.00. A decline below 92.30 could instead take to price to 91.70.
USD/CAD: The US dollar finds support at 1.06. The resistance is instead at 1.1050.

Short Term Rebound for the U.S. Dolla

2009-09-17T10:16:00.000-07:00

Short Term Rebound for the U.S. Dollar?

by Angelo Airaghi [Guest Analyst]

8/17/2009

The U.S. dollar is gaining momentum over weak economic data. The trend should continue over the short/medium term. However, the longer term picture stays bearish for the greenback

U.S.: The trade balance to widen further?

The FOMC meeting of last week was basically a non-event, since the Fed reiterated the need to keep rates low for an extensive period of time, albeit it sees the U.S. economy stabilizing. Rates should again rise in the second part of next year, despite expectations mounting for an increment in December. In fact, after WW2, the Federal Reserve started to increase rates six months following the top in the unemployment rate, which, at present time, might happen sometimes this year or at the beginning of the next. Finally, the Fed has apparently no intention of expanding the purchase of USD 300 billion of longer-term U.S. bonds after the October’s target. With inflation so low, the consumer price index was down 2.1% year-on-year in July, a “wait and see” approach could be the best solution. In reality, economic data remains volatile.

For the first time since December 2007, the US industrial production rose 0.5% in July (+0.4% expected) after having declined 0.4% in June. The increase in motor vehicle production supported the industrial output. Nevertheless, capacity utilization stays near the lows at 68.5%. During the same month, retail spending fell 0.1% (+0.9% expected) versus June +0.8%. The decline was broad-based with the exception of the motor vehicle component which rose 2.8%. However, consumer spending might move higher in the second quarter, after having declined 1.2% in the first quarter. Lastly, higher oil prices drove the US trade balance wider in June to USD 27 billion (USD 29 billion expected) from USD 26 billion in May. Both imports (+2.3%) and exports (2.0%) rose. The trade balance is expected to rise further in the medium/long term, as demand for imports will improve along with the economic recovery.

EUROPE: Awaiting for the German’s traction

Inflation stays near the lows in Europe, in July it declined to 0.7%, and the European Central Bank (ECB) should keep rates accommodative for this year and the first part of 2010 as well. In effect, the economic data is still fragmented and it swings from the positive to the negative of the weekly basis. In June, the Euro zone industrial production fell 17% year-on-year after having declined 17.6% in May. On a monthly basis, the decline was 0.6% compared to the increase of 0.6% registered the previous month. Some nations are lagging behind. As an example, Italy and Spain showed sharp losses during the month. Nonetheless, despite imports remaining low, exports are mildly increasing in the Euro zone. As a result, the German Gross Domestic Product (GDP) rose 0.3% in the second quarter (-0.2% expected) and the French GDP rose 0.3% as well (-0.3% expected). The coming months will be crucial for the Euro-zone, since the global economic recovery should help German exports to climb substantially from current levels. An improvement of the German output will be beneficial for the entire European continent.

GBP/USD: Divergence points to a bearish correction.

EUR/USD: The market is testing the important support at 1.4040. A decline below 1.3950 would target 1.3850.

GBP/USD: A move below 1.6260 would target 1.62, eventually 1.5940, if 1.6040 is broken.

USD/JPY: The yen is dancing on the support line at 94.50. A move below 94.25 would target 93.80.

USD/CAD: A move above 1.1160 would target 1.1270.

The Euro zone Lagging Behind

2009-09-17T10:14:00.000-07:00

The Euro zone Lagging Behind

by Angelo Airaghi [Guest Analyst]

8/10/2009

The economic growth remains fragmented and volatile, as the recovery process is just in its early stage and consumes are low in the U.S. The U.S. dollar is rebounding from the lows and the trend might continue for the short/medium term.

U.S.: consumes still low

As the economy is slowing moving out the worst recession since WWII, data remains fragmented and volatile. In June, the personal consumer expenditure (PCE) rose 0.4% (+0.2% expected) from +0.1% in May following the surge in spending on non-durable products. Personal income, at the contrary, slumped 1.3%, as social security payments run out of steam. However, numbers should improve tangibly in 2010, albeit the recovery process could be the shortest of the past seventy years. In fact, some productive capacity might have been lost forever, while consumes could decline along with the rising saving rates. The job market remains weak overall. In July, 247,000 people (320,000 expected) were out of work. Nevertheless, the number of unemployed was less then June¡¦s 443,000 and May¡¦s 303,000. In addition, the hours worked are increasing and might anticipate some new hiring along the way. The work week hours rose to 33.1 from 33.0. In effect, an increase of the global trade will help the industries in the coming months. After four months of improvements, the U.S. ISM non-manufacturing index declined to 46.4 in July from 47.0. In reality, the contraction of the index was minimal overall. The trend still points toward a recovery for the sector, since factory orders rose 0.4% (-0.7% expected) after having moved up 1.1% in May.

EUROPE: rebound slow

As expected, the European Central Bank (ECB) left rates unchanged last week. In the conclusive speech, Mr. Trichet confirmed some improvements for the economy, but expects the recovery to take place only in 2010. In effect, the Euro zone real Gross Domestic Product (GDP) has declined almost 5.0% from the 2008¡¦s peak and the recovery should be slow, since the tight labor laws are making employer very prudent in their hiring process. In addition, the banking meltdown has been approached individually by each nation and the impact of the various interventions might have been less incisive than elsewhere. Growth remains subdued compared to other nations. German industrial production, as an example, fell 0.1% in June (-0.4% expected), after having increased 0.6% in May. During the same month, retail sales, declined 1.8% following a down move of 1.3% the previous month. In the Euro zone, retail sales slid 2.4% year-on-year in June after having slumped 3.0% in May. Nonetheless, some positive elements are already emerging. The final PMI manufacturing for the Euro zone increased to 11 months high of 46.3 in July from 42.6 in June. The service sector rose instead to 45.7 from 44.7. In Germany, factory orders jumped 4.5% month-on-month in June on the top of May +4.4%. Finally, the trade surplus is at Euro 11.0 billion from Euro 10.2 billion, as exports rose 7.0% and imports increased 6.8% month-on-month.

GBP/USD: Divergence points to a bearish correction.

EUR/USD: The Euro was unable to sustain the up move above key resistance levels at 1.4450 and could now correct to 1.4120, 1.40, 1.38.

GBP/USD: The market has found a strong resistance at 1.70 and could now correct to 1.62, 1.60. In fact, there is divergence between the Rsi indicator and the daily price. A decline below 1.60 would target 1.58.

USD/JPY: The U.S. dollar broke above the 100 MA and targeted the higher Bollinger band. A move above 98.40 would now lift the price to 99.00. A breakout failure would take the dollar to 96.00.

USD/CAD: The Canadian $ is bouncing off the support line of the past two years to target 1.0920/1.10, eventually 1.13.

ECB On Hold Once More?

2009-09-17T10:09:00.000-07:00

ECB On Hold Once More?

by Angelo Airaghi [Guest Analyst]

8/3/2009

The ECB meets this week in Frankfurt (Germany). Rates should stay on hold once more, as the recovery process is just beginning in Europe. The U.S. dollar, in the mean time, is still at key support levels against major currencies.

U.S.: Consumer confidence weak.

The process might be slow and the recovery could not take the form of the classical V shape. However, the worst should be over for U.S. economy, after more than one year of losses. Leading indicators increased last month for the third consecutive time, while some corporate earnings have risen above expectations. In addition, manufacturing industries have reduced inventories and orders have improved, despite the sector remaining very volatile. In June, durable goods new orders slumped 2.5% after having increased 1.3% in May and 1.4% in April. Nevertheless, excluding transportation, orders would have jumped 1.1%. The real estate market has found a bottom at current levels and the increase of sales could boost consumer confidence. New home sales moved up 11% in June to 384,000 units. The up move was well distributed among all the U.S. regions with the exception of the South where sells declined 5.3%. Inventories are now at 8.8 months of supply from 10.2 months, while building permits, a forecasting indicator, rose almost 9.0%.

Finally, for the first time in many months, the number of people asking for unemployment benefits insurance declined to April’s level. Nonetheless, consumers remain prudent as the unemployment rate is still at the top. So, for the second straight month, the U.S. Conference Board’s Index fell more than expected to 46.6 in July, although it remained above February’s low of 25.3. Employment will remain weak for the near future as well, but the picture should brighten up over the medium term. In fact, the auto industry is expected to increase production, as exports are on the rise, since China and other important buyers are ahead in the recovery process. Additionally, the Federal Reserve should keep rates accommodative for most part of 2010 and eventually move them up again to balance a possible increase in inflation.

EUROPE: companies still cutting jobs.

Europe is lagging behind the economic recovery and some tangible results might start to be seen in the last part of the year. European companies are still cutting jobs and only the massive use of part-time work is moderating the downturn for now. In June, the unemployment rate increased to 9.4% (the highest of the past 10 years) in the Euro zone from 9.3% the previous month. Spain was once more among those countries to show the highest rate, while Holland had the lowest. In Germany, the economy fell 3.8% in the first quarter of this year, the worst result in more than three decades. The slowdown is expected to moderate in the second part of 2009, but uncertainty should persist for the medium term as well.

In July, the people out of work in Germany increased 30,000 to 3.46 million on an adjusted basis, while the unemployment rate remained unchanged at 8.30%. Nevertheless, the economic sentiment for the Euro zone rose for the fourth consecutive month to 76 from 73.2 in June, despite remaining below the historical average. In August, the German consumer confidence increased to 3.5 points from 3.0 points in July, as the buying propensity index rose to 25.1 from 14.7. The economic outlook remained at the contrary in the negative territory at -14 from -22.6. Nonetheless, the European Central Bank (ECB) is expected to keep rates steady, although inflation is at the lowest level. In July, the Consumer Price Index declined 0.6% year-on-year in the Euro zone.

Can$ meets key support

EUR/USD: The Euro is still trapped between 1.44 and 1.38. The resistance is at the conjunction of various long term lines and must be overcome with decision for higher prices. A move 1.4450 would target 1.46, eventually 1.52 A breakout failure would take the price back to 1.38.

GBP/USD: The market is still consolidating. A move above 1.6995 would take the price to 1.7390, 1.74. A breakout failure would instead target 1.64, 1.61.

USD/JPY: The dollar is meeting a strong resistance at these levels. They correspond to the 50 days MA and the two months trend line. A move above 96.40 is necessary for 96.80/97.10. A breakout failure could take the price back again to 93.00.

USD/CAD: The Canadian $ reached both the lower Bollinger band and the support of the past two years. A move below 1.0660 is necessary for 1.06/1.0350 A breakout failure would take the price back to 1.10, 1.13.

USD: Breakout or Failure?

2009-09-17T09:54:00.000-07:00

USD: Breakout or Failure?

by Angelo Airaghi [Guest Analyst]

7/27/2009

The U.S. dollar is at key support lines against major currencies and the short/medium/long term trend remains bearish. However, a breakout failure from current levels could signal a short (medium term) rebound for the green back.

U.S: Recession is over or not?

During his testimony in front of the house panel name="ProgId" last week, president Bernanke confirmed a tentative stabilization for the U.S. economy at these levels, although rates should remain low for the next months as well. In reality, the huge consumer and business debit will require years to be repaid. Private sector spending has fallen to record lows and savings have increased. The average duration of the unemployment rate in the United States is at a record high, while tax incomes have declined sharply for the government agencies. The decrease of spending by the private sector has been only marginally substituted by the farious government interventions and the trend should continue in the years to come. Unemployment remains the weakest spot, as jobless claims rose to 554,000 in the week of July 18th from 524,000 the previous week. The housing market is at the contrary designing an interesting bottom, albeit prices are still declining. For the third consecutive month, home sales rose 3.6% in June (+1.3% expected) to 4.84 million. The increase was broad-based with condos rising 14% and single-family homes moving up 2.4%. Unsold home inventories declined instead to 9.4 months from the all-time high of 11.3 months registered in March of 2008. In effect, the worst might be over for the real estate market, if history repeats itself. Since1963 important bottoms occurred every 8/9 years: 1967, 1975, 1983, 1991, 2000, 2008/9 (?).

Europe: Investors still skeptics

The European economy remains weak overall with some sings of improvements. However, the European Central Bank (ECB) is keeping rates steady, despite inflation staying near the lows. In June, the German PPI fell 4.6% year-on-year after having slid 3.6% in May and 2.7% in April. It has been the third straight month of decline and the sharpest down move since 1968. Numbers are improving, albeit the Euro zone is not out of trouble yet. The composite Purchasing Manager’ Index (PMI) for the service sector rose to 44.6 in June from 44.00 in May. In Germany, the PMI printed 45.2 from 44.3. In France, it declined to 47.2 from 48.3. In Italy, if moved to 42.3 from 43.1. The IFO business climate index for Germany rose to 87.3 from 85.9. Current conditions improved to 84.3 from 82.4, while expectations rose to 90.4 from 89.5. Nevertheless, foreign investors are apparently moving away from the Euro zone bond and stock market to target those economies that are running ahead of schedule in the calendar of the economic recovery. In particular, the holding of Italian bonds has been declining steadily since last Autumn, as the Italian public sector deficit is at record high and is expected to hit 5.0% of the GDP by year end. Italy is the second largest European debt market and the economic growth is forecasted to remain only flat in 2010.

US DOLLAR: on focus

EUR/USD: The market is still trapped between 1.44 and 1.38. The resistance is at the conjunction of various long term lines and must be overcome with decision for higher prices. A move 1.4470 would target 1.46. A breakout failure would take the price back again to 1.40, 1.38.

GBP/USD: A move above 1.6660 would target 1.6750. A breakout failure would take the price back to 1.6210, 1.6020.

USD/JPY: The dollar is meeting a strong resistance at these levels that corresponds to the 50 days MA. A move above 96.40 is necessary for 96.80/97.10. A breakout failure could take the price back again to 93.00.

USD/CAD: The Canadian $ reached the lower Bollinger band. A move below 1.0730 is necessary for 1.06. A breakout failure would take the price back to 1.10, 1.13.

EURO: Setting The Long Term Trend?

2009-09-17T09:52:00.000-07:00

EURO: Setting The Long Term Trend?

by Angelo Airaghi [Guest Analyst]

9/15/2009

As the European economy is moving out of recession, the Euro currency is at key levels against the U.S. dollar. A movement above the next resistance could set the trend for the next weeks/months.

U.S.: consumer spending to increase?

More time is needed to see some tangible results, but the economy is on the move again in the United States. Last week, the Beige Book confirmed that the economic activity is stabilizing, as the job market and the manufacturing sectors are registering some minor upticks. In reality, the average duration of unemployment is at historical highs and jobless rate for young people is almost 26%. Public offices are laying-off employees, since some states are registering declines in tax revenues. Initial jobless claims fell to 550,000 in the week of September 5th, versus the expected down move of 570,000. Nevertheless, they remain near the high of the year. Housing, at the contrary, appears to be finally out the woods. Inventories are declining, while building permits are increasing.

As a result, prices should start to climb again over the medium term, as well as new investments, since consumer spending is expected to improve. In July, the U.S. trade balance widened to USD -32 billion from USD 27.5 billion, supported by the strong move of imports, which rose 4.7%, while exports increased 2.2%. All major categories reported some gains, except food and beverages, probably anticipating consumer spending to return positive in the near future. In effect, retail sales were well supported in August. Nonetheless, gains might have been inspired by the cash-for-clunkers program. Automakers are meeting strong requests and the industrial production can rise shortly.

Europe: domestic demand improving

Good domestic and foreign demands are helping the German economy out of recession. In July, exports rose 2.3% month-on-month after having increased 6.10% in June, while imports remained flat compared to the rise of almost 6.0% registered the previous month. The trade surplus is now at Euro 13.9 billion from Euro 12.1 billion. Both manufacturing and services are beginning the trend again. For the fifth straight month, German factory orders rose 3.5% (2.50% expected) in July from June’s 3.8%. Nevertheless, orders are still 19.8% below the level of one year ago, but domestic demand increased 10.3% in July. In its most recent monthly bulletin, the European Central Bank (ECB) confirmed that growth should stabilize in the third quarter, although it could be uneven among the European states. The ECB is expected to keep rates steady for the near future, as inflation remains near the lows and the economic growth is just beginning the resume its uptrend. In fact, industrial production remains weak, albeit improving. In July, it fell 0.3% month-on-month and is down almost 16.0% on an annual basis.

EUR/USD: Resistance holding for now.

EUR/USD: The euro is still testing key levels against the U.S. dollar. A move above 1.4715 would target 1.48, 1.50. A breakout failure would take the price back to 1.45, 1.44.

GBP/USD: The market rebounded from the lower Bollinger bands and is finding resistance at 1.67. It corresponds to the higher Bollinger bands. A move above 1.6840 would target 1.69/1.70. A breakout failure would take the price again to 1.65, 1.64.

USD/JPY: The market is meeting a good support at current levels. Nevertheless, a move below 89.70 would target 89.00. A swing above 92.10 would target 93.00.

USD/CAD: The market has found a strong resistance at 1.11. It could correct to 1.0830, eventually 1.0630, if it moves below 1.0695. A breakout failure would take the price to 1.0940.

Swiss Franc Rallies As SNB Retains Key Rate

2009-09-17T09:30:00.000-07:00

Swiss Franc Rallies As SNB Retains Key Rate, Revises 2009 Growth Outlook

The Swiss currency traded higher against its major opponents on Thursday morning in New York after the Swiss central bank retained its key interest rate and revised its growth outlook for 2009 after economic conditions improved in the third quarter. The franc thus stayed near a 14-month high against the US dollar, 3-week high against the Japanese yen and moved closer to yesterday's fresh 4-month high against the pound.

The Swiss National Bank left its three-month libor target range unchanged at 0-0.75%, as expected. In effect, the bank kept its key interest rate unchanged at 0.25% for the second rate setting session.

The central bank said it will continue providing a generous supply of liquidity and, if necessary, to purchase Swiss franc bonds with a view to reducing risk premia on long-term debt instruments issued by private sector borrowers.

In addition, it will continue to act decisively to prevent any appreciation of the Swiss franc against the euro.

Citing the signs of improvements in the global economy, the SNB revised its GDP growth forecast for the current year. It now expects Switzerland's real GDP to fall by between 1.5% and 2%. That compares with a June prediction of a GDP fall between 2.5% and 3%.

The SNB also revised its inflation outlook for 2010 and 2011. According to the latest forecast, average annual inflation for 2009 would be negative, at 0.5%. Prices are expected to rise 0.6% in 2010 and 0.9% in 2011.

Rebounding from its recently hit 2-day low, the Swiss franc advanced near a 0.7 percent against UK's sterling to touch 1.6992 by 10:25 am ET. The franc thus headed closer to yesterday's 4-month high of 1.6987 against the pound. The pound-franc pair is currently quoted at 1.702, compared to 1.7028 hit late New York Wednesday.

UK's retail sales remained flat in August, the Office for National Statistics said today. On a yearly basis, retail sales volume climbed 2.1%. Economists were looking for a monthly 0.1% rise and annual 2.7% increase.

Inflation expectations in the UK were steady in August, results of the Bank of England/GfK NOP inflation attitudes survey revealed today. In its quarterly survey, the BoE said median expectations of the rate of inflation over the coming year were 2.4%, the same response as in May.

The Swiss franc also advanced to 1.5167 against the European currency by 10:45 am ET, up by more than 0.4 percent from a 20-day low of 1.5235 hit around 8:00 am. On the upside, resistance is seen around the 1.513 level.

First Estimates released by Eurostat, the statistical agency of the European Commission, revealed that the euro area's trade balance showed a surplus of 12.6 billion euros on a seasonally adjusted basis in July compared to a deficit of 3.5 billion euros in the year-ago period. Economists had expected the surplus to come in at a much more modest 1.1 billion euros.

Another report released by Eurostat showed today that construction output declined by a bigger than expected 2% in July compared with the previous month. Economists had estimated a more modest 1.1% drop for the month. In June the output was down 0.3%.

The Swiss franc climbed to a 20-day high of 88.81 against the Japanese yen before moving on holding pattern around 10:00 am ET. The next upside target for the franc-yen pair is seen around the 89.5 level. The pair was worth 88.16 at Wednesday's close.

Today, the Bank of Japan decided to leave the key interest rate unchanged as expected to support recovery and raised its economic assessment. In its Monetary Policy Meeting, the Policy Board of the BoJ decided by a unanimous vote to maintain the uncollateralized overnight call rate at 0.1%. The last change in the rate was a 0.1% cut in interest rates at the December 2008 meeting.

The Swiss franc rose to 1.0278 against the US dollar by 10:50 am ET, the highest level since July 22, 2008. The domestic unit has thus advanced more than 4 percent against the buck thus far this month. The greenback-franc pair that closed yesterday's deals at 1.0322 is currently quoted at 1.0298.

In the US, the Commerce Department released a report on today showing that housing starts rose 1.5 percent to an annual rate of 598,000 in August from the revised July estimate of 589,000. Economists had expected starts to edge up to 583,000 from the 581,000 originally reported for the previous month.

The U.S. Labor Department revealed that initial jobless claims came in at 545,000 for the week ended September 12. This was down 12,000 from the previous week's revised total. Economists had expected claims to rise to about 575,000.

Later, the Philly Fed said its index of manufacturing activity rose to 14.1 in September from 4.2 in August, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 8.0.

Canadian Dollar Trades

2009-09-17T09:27:00.000-07:00

Canadian Dollar Trades Near 1-year High Against Greenback

The Canadian dollar surged up against its major counterparts on Thursday morning in New York as a rally in oil prices and encouraging economic reports prompted investors to buy resource linked assets. The loonie jumped to a fresh 11-month high against the US dollar and multi-day highs against the euro and yen.

Crude oil prices continued an upward move today as encouraging economic data added to hopes for strong demand. Light sweet crude oil rallied to $73.09, up 59 cents on the session. Prices hit $73.16 after earlier touching as low as $71.66.

Statistics Canada said in a report that Canada's consumer price index fell 0.8 percent in August from a year earlier. Economists had expected a 0.7 percent decline. In July, the CPI dropped to 0.9 percent, its biggest since 1953.

On a monthly basis the index was unchanged in August, after a 0.3 percent fall in July. Economists predicted 0.1 percent gain.

At the same time, the leading index of Canadian economic indicators rose at its fastest pace in more than seven years in August, according to data released today by Stats Canada. The composite leading index rose by 1.1% last month, after a 0.6% gain in July. The increase was the largest since April 2002.

The Canadian dollar advanced to a 9-day high of 86.09 against the Japanese yen by 10:00 am ET, compared to yesterday's close of 85.36. The pair is presently worth 85.9 with 87.0 seen as the next target level.

The Bank of Japan decided to leave the key interest rate unchanged as expected to support recovery and raised its economic assessment. In its Monetary Policy Meeting, the Policy Board of the BoJ decided by a unanimous vote to maintain the uncollateralized overnight call rate at 0.1%. The last change in the rate was a 0.1% cut in interest rates at the December 2008 meeting.

Against the US dollar, the Canadian currency touched 1.0594 by 10:45 am ET. This set the highest level for the loonie since October 1, 2008. On the upside, resistance is seen around the 1.054 level for the domestic unit. The greenback-loonie pair, which closed Wednesday's deals at 1.0661, is presently quoted at 1.0618.

In the U.S., the Commerce Department released a report today showing that housing starts rose 1.5 percent to an annual rate of 598,000 in August from the revised July estimate of 589,000. Economists had expected starts to edge up to 583,000 from the 581,000 originally reported for the previous month.

At the same time, the U.S. Labor Department revealed that initial jobless claims came in at 545,000 for the week ended September 12. This was down 12,000 from the previous week's revised total. Economists had expected claims to rise to about 575,000.

The Canadian dollar also advanced to an 8-day high of 1.5626 against the European currency by 10:45 am ET. This may be compared to yesterday's close of 1.5682. If the Canadian currency climbs further, resistance is seen around the 1.56 level. Currently, the euro-loonie pair is quoted at 1.565.