Interest rates are very important for the economy as well as the businesses. No matter what business you do, interest rate changes can have an impact on your business. No matter what you trade-stocks, forex, futures, commodities, ETFs, options, bonds or anything else, you need to keep an eye on the interest rate changes. Now, there is not one interest rate in the economy. There are many. Some are short term while others are long term. A Yield Curve helps you understand the changes in the different interest rates in the economy!

Now as said before there are two types of interest rates in the economy; short term and long term. The return offered on the Treasury Bills is the short term interest rate while the return offered on the Treasury Notes and Bonds are long term interest rates. When you look at a Yield Curve these interest rates are plotted on the vertical axis with the time to maturity of these financial instruments on the horizontal axis. There can be three different shapes of a Yield Curve. The Normal Curve, The Flat Curve and the Inverted Curve. Let’s discuss these three different shapes now. On the Normal Curve, the short term interest rates are lower than the longer term interest rates as investors need a premium to invest long term. A Normal Curve represents normal economic activity where investors get rewarded for investing long term in the form of a higher long term interest rate on these financial instruments in the shape of a premium over the short term interest rates.

Now, most of the time you will come accross the Normal Yield Curve. But sometimes, you will find the Yield Curve to be Flat. When you find the Yield Curve to be Flat, it means that all the interest rates in the economy are equal. What this indicates is that economic activity is slowing down.

However, when the economy starts to go into a recession, you will suddenly find an Inverted Yield Curve. On an Inverted Yield Curve, the longer term interest rates are lower than the short term interest rates.What this mean is that the economy is slowing down and investors are reluctant to invest long term thinking it to be risky. An Inverted Yield Curve is a leading indicator of an economy doing down into a recession. When there is a financial crisis like that happened in the early part of 2008, you will find the Yield Curve to be Inverted. Investors are shying away from investing in long term projects in the economy.

Eurodollars have a highly liquid market meaning you can get in and get out without paying a large spread due to the large market in them. They also have less volatility. However, you can also trade the 10 year Treasury Notes (T Notes) and the Treasury Bonds (T Bond) that have a maturity period of higher than 10 years. However, T Notes and T Bonds have a much higher volatility as compared to Eurodollars.You can also trade options on these interest rate futures contracts. Some people trade the volatility. So, you have to know what you want before you trade these instruments! Many investors and traders trade interest rates by investing in Eurodollars. Eurodollars are short term futures contracts that have a low margin requirement meaning retail traders and investors can also trade Eurodollars.

Trading interest rate futures is no different than trading anyother futures contract. If you haven’t traded futures before, a good idea would be to first paper trade these contracts for at least two months so that you get a feel of how these futures contracts gets traded and how the market behaves! Now, when you trade these interest rate futures contracts, you need to keep an eye on the market constantly. Futures trading can be risky and in a matter of few minutes you might get wiped out in the market and get a margin call from your broker.

Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures secret that can make you rich. Read the story of Richard Samuels, a post office mailman with a head injury and how he made a fortune with these Neutrino Forex Signals

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Financial guru and ubiquitous TV personality Suze Orman delivers cogent advice about managing money in her distinctively ebullient style in this PBS program. Addressing an audience and fielding questions, Orman tackles topics such as managing debt, building a stock portfolio, planning for retirement, and obtaining the right kind of insurance. Dispensing such aphorisms as, “It’s not about making more money, it’s about knowing more about the money that you already make,” Orman uses humor and gentle confrontation while bantering with the crowd. A benefit to this program is that it was recorded “post-bubble,” in late 2001, and Orman uses real examples of audience members whose portfolios were devastated to illustra… More >>

Suze Orman – The Road to Wealth

Would you like to be able to take a lump sum of money, and then turn it into a larger sum of money so you could pass it on to the next generation? If you have spoken to a financial advisor or insurance agent, they may have mentioned SPLI (Single Premium Life). This product can work well for some people.

The most obvious difference is that you make one large cash payment when your coverage begins. You are probably used to having a monthly bill! That one lump sum funds your coverage, and so you do not have any more payments to make.

So you see that you have given the insurer a certain amount of money. In return, they issue you a policy for a sum that is probably a few multiples of the original amount. Many people are using this product to fund their estate.

Look at the example of a healthy 70 year old who retired from the public school system. Her savings and teachers pension enable her to live well. But she also has another $50,000 she inherited from her own parents. She could take this cash and fund an SPLI for, let us say, $200,000. This way she sets up a nice estate to pass on to her kids and grand kids.

The paragraph above is only meant to illustrate how this works. The amount of cash you would have, and the death benefit you could buy, depend upon different things. As with any other life insurance, your premium and coverage amount will depend upon age, health, etc.

Would SPLI be something for you to think abuot? If you have some money, and would like to be sure you can leave more money to survivors, it may be something to think about. It works best if you are sure that you do not need that money to live on, especially in the next few years.

If you do have to cash out your policy early, you could lose some of the value to surrender charges and fees. There is usually some sort of term for these, and policies are different.

Another advantage to the owner is a SPL policy’s ability to grow a cash value quickly. If you can leave the money alone for the few years you will need to get past surrender charges, you can have a nice place to borrow money from. You can also cash the policy in. The cash value should grow quickly since the insurance is already funded by the initial payment!

Another feature is the fact that many policies allow you to accelerate the death benefit in case of a terminal illness. This way, a person could use the money if they need it. Some also have provisions for withdrawing part of the cash value in case of nursing home confinement.

There could be some disadvantages to single premium life insurance. Remember that early cash outs can incur surrender fees. You lose some of the tax advantages of regular life policies too. And of course, you do need to have a lump sum of cash to fund it.

We can help you figure out if Single Premium Whole Life will work for your family!

Developing a trading system is not easy. It requires first of all good trading experience. Than you need to test your trading system under live trading conditions. It might take time as well as involve the risk of losing money. To overcome this difficulty in testing a trading system or a trading strategy, backtesting has been developed. Backtesting is possible with the use of software. A trading system might comprise of a set of two or more indicators with a set of rules that tell when to enter or exit the trade.

How to do backtesting? Using a backtesting software makes it very simple and easy. Backtesting uses historical data to test the performance of the trading system under the past market conditions.

Backtesting results are no guarantee that the trading system will perform well under live market conditions. Things that worked in the past might not work now. Similarly something that didn’t work in the past, may work now! You never know!There are many problems with historical data. There is no slippage in backtesting. Slippage is one of the most important problem that a trader faces while trading live. The other problem that the backtest ignores is the widening of spreads under volatile market conditions.

In other words, no two trades work out in exact the same way twice. SO you have to be careful when looking at the back testing results and take it with a pinch of salt. However, there are still some advantages of back testing a trading system.

Back testing can give you a feel how a particular market behaves under certain conditions. Back testing can also spot you certain general characteristics of the market like the seasonal trends and market tendencies.

For example, some markets especially the commodities market is highly seasonal and cyclical in nature. We can take the example of agricultural commodities like wheat, grains,corn, cotton, coffee and stuff like that. In case of the stock market, there is much talk of the January Effect. Well, it is there no doubt about it. Some years, it is highly pronounced and others it is not that pronounced. Similarly stock prices tend to rise at the end of each month and the first few days of the new months. The reason for this is that many institutional investors tend to put the new funds to work at the end of the month and the beginning of the new month! Now in other markets, you might not find any seasonal trends. For example, there is very little seasonality in curreny market or the bond market.

US Dollar Index trendlines might last for months to years. In other markets too backtesting can help you figure out important trends that lasts for last times. Backtesting can help you figure out how long a trend might last in a particular market.

But to tell you the truth, backtesting can only give you a rough guess about the performance of the trading system under live trading conditions. There is no substitute for live trading results!

Mr. Ahmad Hassam has done Masters from Harvard University. Download these Forex Scalping Cheatsheets FREE! Read this shocking FREE 40 page PDF FRWC Brutal Truth Report that exposes everything about trading robots!

Product Description
Studio: Paramount Home Video Release Date: 09/30/2005Amazon.com
Financial guru and ubiquitous TV personality Suze Orman delivers cogent advice about managing money in her distinctively ebullient style in this PBS program. Addressing an audience and fielding questions, Orman tackles topics such as managing debt, building a stock portfolio, planning for retirement, and obtaining the right kind of insurance. Dispensing such aphorisms as, “It’s not about making more money, it’s about knowing more about the money that you already make,” Orman uses humor and gentle confrontation while bantering with the crowd. A benefit to this program is that it was recorded “post-bubble,” in late 2001, and Orman … More >>

Suze Orman: The Road to Wealth