LATEST FROM BLOG
When a company starts declining, there is not much growth potential left, unless a miracle happens. The returns on the existing plan also start to reduce until the entire business is shut down. As an investor, you should see the future of the companies in advance based on their management. You should be continuously monitoring the growth of the company that you invest in. The moment you realise that the company is declining and there is no hope for further growth, you should take out your investments.
No matter how loyal you are to your invested company, if your goal was to make money from your investment, you will have to make better decisions. It becomes difficult for declining companies to reward their shareholders. When the investors have thousands of options to choose from in the market, it is senseless to stick to a declining share.
With the three signals mentioned below, you will be able to study your company’s condition and make better decisions.
If a company’s revenue has been declining in the past few years, it is a sign for investors to take our their money. Revenue of a company is their best income statement, and if their top line statement is not showing any progress, then it is time to switch the investment. Not only a declining revenue, but a flat revenue is also a sign of caution for the investors. The company can only increase its profit if they are generating more revenue. The flat and declining revenues is a sign of poor management and a weak operation. Also, if you find out that the revenue of the competitive company is growing at the same time, then your company will not be able to hold for long.
Negative Profit Margin
Profit margin is net profits/net sales. It is realised for a time frame that determines how much a percentage of sales has turned into profits. If the profit margin for a company is gone negative, it shows that the company is unable to make regular profits from its business. Most of the time, the companies lose their market share to their competitors and so make lesser profits. It is a sign that investors should be able to see in advance to take out their investments before it is too late.
Big Dividend payouts
Dividend payouts determine the ratio between the total amount of dividends paid to shareholders and the net income of the company. You can calculate this by dividing the dividend per share by earnings per share of the company in a year. If a company has a constant dividend, it is a healthy sign for the investors. The problem arises when the company starts paying more of its net income as dividends. This means that the company is not retaining enough income, and the investors should back out at this moment.
Trading and gambling have often been looked at from the same lens many times since both involve risks and benefits and involve money. The investment is also based on a similar construct of “Outcomes”, whether it is a poker hand or forex news. We all have gambling tendencies that we use at different times in our lives, with or without money. It is the hope that we put on chances which give us an adrenaline rush of making the right prediction. In the forex market, it is much more than chances and depends a lot of the progress of the economy of currency and other international factors.
According to the definition of the word “gamble”, it is the risk of losing in a game or bet to achieve something. When we consider this definition, both forex and gambling involve risks and losses. At some point, you are meant to face losses in forex as it is a part of this business.
Even after so many similarities, the forex professionals still want to convince us that forex is not gambling at all. The only people who will try to convince you that forex is not gambling are the ones who want to sell you’re their products while promising up to 98% success rate. The truth is that even the large banks and hedge funds gamble all the time when they trade. But there is a big difference how they and the 99.9% of the retail forex traders gamble. Their luck depends entirely on probabilities. It is a calculated gamble that can pay better than casino games and sports bets.
How do probabilities work?
The probabilities in forex trades depend on the odds of the market that are in your favour. Traders invest their money on the trades which offer higher odds of winnings. It is also known as stacking the odds in your favour. The more confluence you have in your favour for any trade, the higher chances you will have to make money from that trade.
Is forex trading gambling?
Yes, forex is one of the most played forms of gambling. The only difference is that we can get to review past price action before investing money. It is similar to seeing the dealer’s hand before making a bet in blackjack. This advantage will only work when you know how to use it to your advantage. The key to knowing this is to find the right confluence factors that can stack the odds for you. There are plenty of factors that influence the odds, such as trends, moving averages, resistance, and economy of the currency.
The goal for a forex trader should be to learn trading like the casino operator runs his business. Both casino owners and forex traders should know that they will lose money to some customers or trades, but it is the cost of doing business. With the best odds stacked in their favour, sooner or later they both will experience profits.
Gambling and investing in the market is often assumed as the same thing due to many reasons. The most common reason is that both require investing money on the outcome and taking chances on something which is in progress. While gambling can be related to betting in casino games or sports, when it comes to trading, gambling becomes a much more complex version of itself. The beginners who have no clue about the market while investing are gambling.
How is gambling a part of trades?
Inarguably every person has gambling tendencies of some level. Some like to make bets for a dare while others push themselves in the compulsion of playing casino games. Even if they do not want to admit it, there is a gambling impulse in everyone that makes them take risks in their choices from time to time. It is when we discover the motives behind our actions, we will be able to change the way we look at gambling. When one gets indulged in trading, it is the tendency of gambling that makes them put their money on the trades without proper research. If the trade becomes successful, it becomes a part of investing, and the person will naturally become a professional market participant.
Many times it happens that people get involved in trading due to social pressure. Some people may not have an interest in trading or investing, but due to everyone around them talking about trading, they invest anyway. They may invest in showing respect to the trading group or when they do not want to feel left out in the talks. There are several variables in the market, and any misinformation among investors can create a gambling scenario.
Other factors that push gambling influence
There is a learning curve in gambling that any investor will have to go through if they do not want to gamble on their trades to expect lucky profits. This also depends on how the person approaches the financial markets. How one person approaches, the market will be determined based on a successful trader. There are two traits of traders that determine the gambling tendencies in traders.
Trade gambling for excitement
It is common in the beginners in trading to listen to their heart and emotions while trading. Losing a trade can easily provoke them to make poor decisions for themselves. It also creates a topic of discussion in social proofing about the loss in trades of the entire group. For a person who is making trades to be in the social circle, it is easy to tell that they are trading in a gambling style.
Trading to win
The other type of traders uses a methodical and systematic way to make investments. They want to win the trades at all costs and do thorough research about the stocks or currencies before investing. Good traders always take their losses as a sport and analyse further to make better decisions in future. But not having to enough wins and a series of bad decisions ending up in losses confirm that the trader has entered the method of gambling.
Stock market secrets do not remain secrets for long as the traders and investors are always finding new ways to crack the stocks. If you are not among the first few to learn about the new tricks of the stocks, you are already way behind in making profits from those tricks. However, there are some basic stock market secrets that every beginner trader should know about. These five stock market secrets will help you make better trades.
Focus on the business quality
The main rule of investing in the stock market is to focus on the quality of companies rather than getting lured by attractive shares. Think in terms of buying the entire company instead of simply following their brand. Find out the company’s need in the market and think for the future. You will need to consider the products dealt with by the company, overall sales, consistency of sales, competition of the product, competitive strength of the company, and customer management. If you find a company that can satisfy all the criteria mentioned above, then you can successfully trade in the stocks.
Make long term investments only
If you are willing to invest in a stock for ten years, you are good to go, but if you want short term benefits, stocks is not the best option. You can day trade in forex to earn benefits of short term trades. Stocks market investments require time to nurture, and if you take out your money too early, you will regret the decisions later. If you believe that you can beat the stock market game in the short term, you are still a beginner. Most of the rookies cannot resist the urge of buying and selling in the beginning, and that is where they make the worse decisions in stocks.
Never stop checking for more stocks
Investing is stocks is not picking from just ten stocks. There are thousands of companies out there. You will need deep research of the market to find the companies that have just started growing. You will need to analyze at least a thousand stocks before investing in one. Once you find a promising stock, wait for the price to become available at a bargain.
Research about the management
Find out how well the management of your chosen company is using its resources, manpower, and material. This management efficiency will reflect the return on equity and return on capital for your investment. If the management fails to use its resources well, it is highly likely that the company will collapse sooner or later. Any wastage of resources should be taken as a warning signal by you.
Stay away from hot stocks
Hot stocks is just an attention-catching activity that the market offers time to time. It is when the market comes on the news and becomes volatile. You should not be interested in the market when everyone else is, instead you should be interested when no one else is bothering. It is not advisable to chase hot stocks. You should be investing in the funds or stocks that have performed well consistently in the past and will do so for a long period.
Trading involves high risk and demands a lot of patience which is quite often missing in many new traders. There is no one guaranteed method of earning higher returns, but it comes with practice in the live market environment. Even though all the strategies have some loopholes and risks, you can use the best basic tips to get better results from the share market.
Invest in few stocks for experience
The cardinal principle of smart trading is to start with only a small group of stocks (10 to 15) until you gain some knowledge and experience. Share trading can be multifaceted as you need to learn the fundamental triggers, news flows, technical levels, etc. It will be difficult for you to manage a large number of stocks with so much research to do. You must also commit a higher capital when the conviction level becomes higher. It will only be possible when you spend more time and effort on only a handful of stocks.
Focus on high momentum stocks
You will need to be consistent in trading and trade frequently to stay active for any quick opportunities. It will help in developing a momentum stock collection. The momentum of a stock is the speed and intensity of the stock to news, triggers, and chart patterns. For example, investing in a big stock will not provide the momentum to the trader as the big companies have already reached close to their caps and do not develop more gaps. Instead, you should be focusing on high momentum stocks which can offer long term momentum.
Trade high beta stocks
Stocks can be aggressive or defensive. The stocks which have a beta of less than one are called defensive sticks while the stocks with a beta greater than one are called aggressive stocks. Trading becomes much more profitable when you bet on stocks which have beta more than 1.5. These stocks will also have high momentum, which will work in your favour. High beta works in both ways, so you need to think of strategies that can minimize the risks while giving you the best profits.
Learn the short side of the market
Short trading is often labelled as a risk that traders take. The short sellers play an important role in the stock market as buyers. Short sellers play on the selling side when they feel negative about the market. You can sell in the forex market and buy back the game day. Similarly, when you want long term investments, you can choose the future or put options. The short side of the market has low crowd as most of the investors play on the long side. You can benefit from both sides if you make the right choices.
As a new entry into the online gambling scene, you need to have an understanding of what the digital space has in store for you. Technology paved the path to such innovative ideas to make gambling a convenient affair. But as you slide into the comfortable position of staying on your couch to play a game of poker, there are some aspects of gambling that you must be aware of when trying it out for the first time. Check out for the tips that you need to keep in mind before signing up to any gambling site. Becoming an ace gambler will depend on your range of understanding the rules and all the layers to the game. Grasping all the details and strategies of each game faster will help you get into the pro game sooner than you think. Let us have a look at a few tips that you need to keep in mind a newbie into online gambling.
1. Choice of Casinos
Like every product you come across in your life, casinos also have its unique set of features and designs. Some may even be fraudulent sites that await your click to extract money out of your account. You need to be more careful with choosing the right casino for gambling since you are putting your hard-earned money into it. Research every online casino that is on your list before making a decision; look for the certification of all those casinos and make sure if they are valid or not. Look if the factors of 24/7 customer support, high-quality encryption software, and legitimate licensing are properly provided on the site.
2. Distinction Between Practicing and Playing for Money
One of the main reasons for people to prefer online gambling is the opportunity to practice each game before playing it for real money. You get to try out your favorite game for free and have a better understanding of what the rules and the basic layout of the game are. Practicing can go on for as long as you want without paying any extra pennies for it, helping you establish a wider picture of the game. But in order to have the best experience and become pro at gambling, you have to go for the paid version.
3. Understanding the Odds
If you are about to try gambling for the first time, you need to understand the fact that betting is essentially linked to luck. You can in no way predict the spot where the ball will land in a roulette wheel at the end of the spin; the winnings come depending on the luck factor. Controlling your luck will need supernatural powers, but since you don’t have any, it is best you try and curb the risks you take while betting. Try and learn how to play every game in such a way that you bring the odds in your favor. By practicing the game a few times and reading through a guide and detailed beginner tips, you will have a better idea of how you get to direct the probabilities in your favor.
The primeval times have left substantial evidence for the existence of gambling games in those ages. China, with the tiles that denote the year of 2300 BC, and Egypt with the ivory dice from 1500 BC and other gambling paraphernalia, puts up a clear statement of gambling being an old practice. Gambling is said to have come into existence from the time civilization took birth. The Romans have written stories that recall the period where emperors and peasants gambled over a game of dice, and it also covers the events of people becoming overwhelmed by the debts and fights that resulted from the games.
According to the historical documents, the kings of Norway and Sweden indulged in a game of dice to determine the division of the territory. Everything about gambling has changed over the years, from the primitive method of gaming shifting into online casinos to the prize switching from territories to chips that are exchanged for money. Let us have a closer look at the evolution of gambling.
Oldest Poker Chips
Gambling had an entirely different outlook in the past with bones, rocks, and sticks having taken the place of chips. The games we play in Las Vegas have ceramic chips to count the amount we hold to our possession; such coins came into existence only in the 9th century AD in China. Mahjong tiles and dominos evolved only at a later stage after the initial form of coins (clay) spread all across Asia. Card games then traveled to different parts of the world, starting with Egypt, through the whole of Europe, to the American gambling scene. The 52-card deck became the standard set to play for money only after the 14th century.
Pioneers of Modern-Day Gambling
Blackjack’s early form named Vingt et Un was a French game that was played by the European lords in gambling dens. Then came a game called Poker, which was developed by the British, Italians, and French; it grew to become one of the most exciting gambling games of all time, and still is. Poker is also said to have its initial roots in Germany with their traditional game called ‘Pochen,’ which translates to ‘bluffing.’ As the early settlers set foot in America, both Poker and Roulette became popular in the country.
The American gaming culture began developing to greater standards as the more settlers from all over the world started arriving. All those people were interested in the card and dice games and Roulette so much so that bars and salons were almost always crowded. In the 19th and 20th century, gambling became more popular in the US than in any other country. Most of the established games played in online and land-based casinos have had such a history that not many people are aware of. Today, the US has hundreds of casinos spread across several states, and so does other countries, with all these companies contributing heavily to revenue generation for the economy.
Taking a risk to increase wealth through the market conditions is what every investor does when putting money into the business. Uncertainty lingers in the scene of investments so much so that predictions could come out in the strangest of ways. But the world of investing has this intrinsic factor of risk to it, and this uncertainty becomes the criteria to branch out two activities under it- speculation and gambling. Although both these are forms of investment, they are different with their unique features.
Gambling is all about wagering money over an uncertain outcome with high hopes of winning. On the other hand, speculation refers to taking a calculated risk in the hope of some profit from an uncertain outcome. Speculation may have the result to be a loss, but it does involve positive returns on investment. Gambling has a contrasting take here with negative expected returns even when some people manage to win money by getting lucky.
This is an action that involves the calculation of risks and research of the market conditions before investing. Buying and selling of assets is only at the hope of earning bigger money in the process. Every speculator needs to know that the potential gain increases with a higher risk, but also that the loss could turn out to be more than the potential gain.
Playing a game of chances knowing that the odds are against the player is what gambling carries as an activity. Hence the probability of losing more than what you invested is higher than the probability of winning more than the investment when you gamble, making it risker than speculation.
A weak connection regarding the investment of hard-earned money is the only similarity between gambling and speculation. Breaking apart that link between the two will leave only the key differences to be apparent. The fundamentals of both gambling and speculations differ through their definitions except for the term ‘investment.’ Speculation is an act where the investor is at substantial risk of losing money while he/she holds onto the hope of gaining more value. Although the returns of speculation might not really manifest, a certain amount of positive expected return exists within it, despite the risk factor.
Gambling has a different nature to it with the house being at an advantage almost always. This practice also leads to people ending up in qualms and existential crisis, which would further eventuate into the gamblers trying to prove their worth. Unlike in speculation, people have emotions running while they gamble, and this would shoot up the dopamine levels in the body. Challenges seem more attractive as they fall into the groove of the game, which would be a table with people around it and rules that the gambler knows nothing about. Speculations may be risky too, but the calculations put you at some sort of advantage when you are investing the money; either way, you are in for a gamble at the market by expecting returns at a lower risk than an actual gambling session.
Every avid gambler knows the fact that no game guarantees a high return on the bets they place. A blend of strategies and luck is what results in a prize that, in most cases, turn out to be lesser than what you invested initially. By playing honestly, you are taking some risk of investing money into the game that doesn’t assure you any returns. The most relevant question that arises at this point would be that of how the gamblers, who make a large amount of money through gambling, manage to do it. All aspiring gamblers might be looking for effective ways to win at a casino game or sports bet. Not a single strategy can give you a sure shot jackpot, but there exist some ways that you can adopt to manage the risks and reap greater rewards. Let us have a look at a few such powerful gambling tips that actually work.
1. Manage Your Money with a Bucket Budget
Many gamblers stick to the idea of not spending more than a certain amount of money on gambling, and that cannot be effective always if you fall for the alluring charm of the game. Money management is crucial in developing a good set of gambling habits; a better plan can be implemented than the aforementioned one. Carrying a few denominations with you can let you start the game with small bets. For example, if you have decided to play with $70, take two $20 bills and three $10 bills with you. Key to setting an ideal budget is rotating the money as you play. Try a different game if the first game demands the first bet to be $20. If you have won significant money by playing with the $10 bill, you could risk the money in such a way that you don’t lose more than $10 from the $70 with which you started playing.
2. Smaller Jackpots is What You Need
You are sure to be tempted by the wide array of games in a casino and the crazy payoffs they offer. When signing up for this game, you are only spending a whole lot of money for the chips to start playing. Always remember that the prize money is an accumulated collection of what all players paid initially. So, it is important that you look for the game with a smaller jackpot so that you lose only half of what you might have with the higher version. When considering winnings, what you earn from a game of 4,000 credits would always be of more worth than losing in a game of 10,000 credits.
3. Go for Smaller Bets
Many sites might advise you to bet bigger on every game, but that isn’t the ideal way of approaching a gamble. Key to saving some money at the end of the day, even without winning, is either by quitting the game and leaving when you feel it’s going haywire or by splitting the cash into portions to make small bets progressively.
Gambling has had various forms since the advent of the concept. The practice takes a whole different approach with the betting over financial market conditions. Millions of people keep track of the economic situations to draw a personal conclusion over the speculations to make money from it. When investing in the financial market, you need to have an in-depth knowledge of the subject, and you must also study the company’s history. Several such factors come into play when you make such investments in the financial market. To have a hedge over the money you put into the business, you have to have signals indicating the rises and falls within the market.
A closer look at the condition of these companies will only magnify the issues in that particular company, which is necessary. But you also need to have an idea about how the entire economy is running. Signals can support you in the progress of investment by showing you the right spots to put your money. With the corporate firms arousing the interest of financial news media in the buying and selling of securities, the decision becomes a piece of public information. Abandoning some products, entering a new business, and announcing stock splits are indicators of some of the most important information to the market. A few types of signals exist, which we need to look in detail to have a better understanding.
Most of the activities in the financial market support the adage “actions speak louder than words.” When a high authority of a company announces that he/she is highly optimistic about the future of the company; it may also include his/her expectations for the company. But how does the scene change when the same person decides to sell his/her share in the company? Everyone interested in investment would fall into a dilemma. Suspicions start to simmer in the head, and those thoughts don’t arise just in the people who plan to invest money but also in the ones who have already invested in the company. So, every investor must look for such signals, which are the actions of such renowned people in the business.
This is simply how the minds of customers work even when buying a pair of shoes or cloth. Looking for a better brand that has a higher price will give you the satisfaction of purchasing the best product in the market. The same psychology applies to other major companies that run the economy. Price always plays a role in the reputation of a company, and the smaller competitors find it difficult to reach the customers with the lower prices since people have established the idea of lower prices mirroring inferior quality. This would go on to create a hierarchy in the market, and this would make it easier for the investors to filter their choices the right way. Therefore, the price needs to be always checked when making investments as this signal directs behavior in the market.