How Much Money Is Required to Start Day Trading?
Day trading today is so different then what it was back when I first started trading in 1989. In those days, most trading was done in what is called a Trading Pit, where securities and commodities were bought and sold via “open outcry”.Like in the movie “Trading Places” with Eddie Murphy and Dan Aykroyd, where you see all these people in different colored jackets shouting and waving their hands (called Floor Traders), surrounded by electronic price displays and news monitors.When you wanted to make a trade, whether it be for a day trade or longer, you would pick up your telephone and call your broker, who would take your order over the phone and then, after confirming the order back to you, would relay it to someone else and eventually end up in the hands of one of these Floor Traders. The Floor Trader would then attempt to fill your order in the Trading Pit, and if filled, relay that information back to your Broker who would then call you back with your fill.When it comes to Day Trading, where you need to get in and out of your trades quickly, the old way was not very efficient and at times frustrating and costly. A lot can happen in the time it takes for orders to arrive at the Pit and come back to you as a fill.With the improvement in communication technology as the 20th Century was coming to a close, Electronic Trading (aka eTrading) became more prevalent and accessible to the every day trader. With just a click of your computer mouse, buy and sell orders could be placed instantaneously. If your price is met, you could be filled before your hand even moved away from your mouse.Electronic Trading is arguably responsible for the major reduction in trading costs (commissions) seen over the years, as well as the increase in Day Trading activity. Not only can Day Traders make quick trades, but their cost per trade is also much lower than years before. Today, anyone with a small amount of disposable funds (never use money you need to live on) can get setup and start Day Trading.So how much money is required to get started in Day Trading?This is one of the most asked question by individuals looking to get into trading. It is also one of the most difficult questions to provide a black and white answer to.The amount of money needed to start Day Trading really depends on several variables. What are you interested in trading? The (discount) Broker you decide to open an account with. The style of trading you wish to do.Day Trading in the Stock Market is not really suited for beginners. Recent regulations require that you deposit at least $25,000 in cash or securities with your brokerage before you can day trade securities.The Futures and Commodity markets offer Day Traders better access to day trade for a much smaller deposit. Depending on the brokerage, you can open a futures account for as little as $2,500, although many require at least $5,000 to $10,000. This is not the same as “margin”, which is the minimum amount of capital you must have in your account in order to trade a particular a futures contract. The margin required depends on the market being traded and the current level of volatility. For example, to trade a single Live Cattle futures contract may require that you have an “Initial Margin” of $1,650 in order to initiate the trade, and it must not drop below $1,200 which would be your “Maintenance Margin”.In recent years, the FOREX (Foreign Exchange) currency trading has taken the trading world by storm. With access to free price data and trading platforms, lower minimum account balance requirements, no commissions (brokerages make their money via the ask/bid spread), and flexible trading unit sizes, it has proven to be one of the best options for anyone looking to get into Day Trading with less capital requirement.With futures trading, just a few ticks can mean several hundred dollars (profit or loss) for most contracts traded. If you are just starting out and your account balance is only $3,000 to $5,000 (or even $10,000, which is not that much in futures), you could be seeing moves of 10% of your account within minutes! It is great when your timing is right and the market is moving in your favor. It is not so great when your timing is off by just a little and it is moving against you. For a Day Trader just starting out, it can be very difficult to succeed with this kind of leverage in futures with a small account.In the FOREX markets, however, you only need to find a FOREX brokerage that gives you the flexibility of decreasing your unit size. While new regulations has tightened up the leverage available to traders (i.e. 250:1, 100:1), being able to adjust your unit size makes it possible for traders to trade pip sizes (think ‘ticks’) that are even less than $1 each. Some brokerages have “no minimum deposit” requirement to open an account. Your only restriction for trading a currency pair is the amount you have on deposit in relation to the unit size you have chosen to trade, due to margin requirements. So if you have a small amount in your account (say just $200), simply adjust your unit trading size down so that you meet the margin requirement. While a small pip size won’t make you large profits during a single trading day, it also means you can avoid large losses as well. And if your day trading experience grows to where you are making consistent profits, those small gains can add up to increase your account size. With your account size increased, you can adjust your unit size up accordingly.So if you are interested in getting started in day trading, if you choose to trade in the FOREX markets, you can do so for very little money.
Business Ethics – Why Are They Important in Small Business?
Rarely is there the individual who does not encounter an ethical or moral dilemma at some point in his or her business life. Whether that individual is the owner of a multinational corporation, a small business entrepreneur, or a new or established employee, everyone is likely to have to face such an instance eventually. Much like a personal ethical dilemma, an individual is faced with making a decision based on how it will affect not only himself, but on how it will effect the organization as a whole. One of the major problems when dealing with an ethical dilemma in business is that individuals are often swayed by business profits and the legality of a decision.The Institute of Business Ethics, whose slogan is “doing business ethically makes for better business”, describes the term business ethics as such.Business ethics is the application of ethical values to business behaviour. It applies to any and all aspects of business conduct, from boardroom strategies and how companies treat their suppliers to sales techniques and accounting practices. Ethics goes beyond the legal requirements for a company and is, therefore, discretionary. Business ethics applies to the conduct of individuals and to the conduct of the organisation as a whole. It is about how a company does its business, how it behaves intrinsically.As clear as this definition is, it is certainly open to interpretation. Therefore it must be understood that the application of business ethics to any situation is entirely subjective.One can also understand business ethics, and ethics of any kind, as applying a sense of fairness to a situation. Even with a sense of clarity applied to the use of business ethics, reaching a just and moral decision can be a complex process for most individuals. The subject of business ethics has been a source of great debate in recent years as the heads of major (and minor) corporations are revealed as less than ethical characters both in the way they do business and in their personal conduct. However, it may be said that any individual who does not practice business ethics cannot be personally ethical even though the reverse may not also be true. Ethics in generally has a long history of applications. Centuries ago a man’s ethical practices defined who he was as an individual. However, as populations grew, the necessity for incorporating the best business practices into a company became somehow less important because there was always another customer around the corner and the owner of a business was rarely the focus of attention in a community the way he or she may have been in the past. A company’s administration took a seat in the background and hired representatives to deal with any fallout. Ethics rely on several factors, one of the most important of which is culture. Again, like the business person of the past, a culture’s ethics practices will largely depend upon the value that is placed on them. Business ethics have the unappealing conflict of often being contrary to what is legal. Often what is “right” is not necessarily what is legal, and a business must consider this conflict when making ethical judgments. Although there are many in the business world who believe that a business has no room for ethics if it is to function competitively, the numbers of corporate whistleblowers indicate that there is still room for ethics in business.Western societies place a great deal of emphasis on success. However, in business, there are often conflicts between ethical behavior and business success. This disparity is often multiplied for the small business owner. To compete with larger businesses, it may be tempting to abandon ethics just to make an adequate profit. Additionally, the small business person is relatively autonomous in his or her decision making; he or she does not have to answer to a large employee base or a corporate governing board. It is also interesting to note that the small business leader often has his or her decisions impact a greater number of individuals than does the employee of the small business. For instance, a small business owner may have his or her decision affect his or her customer base as well as his or her employee base. The employee will likely find that his or her decision will only directly impact his or her immediate circle of coworkers. However, the pressure to succeed is both an internal and an external pressure and often leads individuals to make ethical decisions that are based more on those pressures than their own moral judgment. As consumers grow wary of those that they do business with, one must understand that there is just cause for such wariness. The cynical American consumer has learned, often the hard way, that there is little room in business for ethics. In a society where the customer used to be king, the consumer has more often than not experienced several distasteful experiences with business both large and small.Some experts argue that any focus on profitability is bound to test the limits of ethical practices. They assert that to assume that the primary function of a business is to serve its client base in an ethical manner is idealistic and that the nature of a free economy dictates that ethics must take a back seat to increasing profits. Although it is rarely the conscious intent of a business to harm the public interest, reality dictates that the businesses ability to increase profits will determine its success. Publicly owned companies experience extra pressure in this arena. It is difficult to draw investors to a company based on its ethics. Investors are looking for a return on their investment and ethical performance does not equal dollars. There are economists that assert that, in any competitive economy, ethics are impossible to uphold; that a company can legitimately bypass ethics with the excuse that unethical practices are the only way to make a profit.Unlike the larger corporations, the small business leader is in a unique position to shape the ethical practices of his or her business. Small businesses have a smaller employee base to police when applying ethical policies than do larger businesses. It is important to understand that, similar to the ethical dilemmas of the large corporations, although an individual surely knows the difference between the correct ethical decision and the wrong road, the choice to throw ethics to the wind is often made because the unethical choice is more profitable. This may, however, happen much less often in smaller organizations because the individual or individuals who are harmed by the unethical decision and someone is always harmed, is more visible to the small business. Major corporations and their decision making machines are often far removed from the individuals that their immoral and/or unethical decisions effect. This may make the wrong decision much easier to make.The unique position that the small business owner is in regarding the formation of an ethics policy yields a great responsibility. A proactive business leader formulates a statement of organizational values that employees of the company are expected to embrace – at least while performing duties in the service of the company. An organizational ethics policy is an announcement to the employees, the customer base and the community as a whole that the business is prepared to conduct itself and its practices on an ethical level. Such statements invite the respect of all parties involved in doing business with such an entity. However, it is imperative that the small business owner not make the same mistake that larger organizations often do; the ethical policies that a business develops must not be in conflict with the organizational goals. It is unethical in itself to develop an ethical policy that an employee cannot possibly follow and maintain his or her employment. When faced with the decision between an ethical decision and his or her job, an employee will almost always choose the job.Therefore the policy must be in reasonable alignment with the organizational goals of the business. It is equally important, and maybe more so, that the small business leader lead by example. Employees, especially in a smaller organization, are less likely to conduct themselves ethically if they receive implicit permission not to. The end result of such a practice is that the small business owner can be assured that he or she is conducting business in a manner that encourages the trust of his or her customers as well as his or her employees. And since consumers have become very wary of doing business with an entity they feel they cannot trust, the small business can enjoy the profits of a loyal customer base. The small business owner has an advantage over the larger corporations in that it can elicit the trust of the consumer by applying ethical business practices that give the customer the feel of an equal business relationship rather than one where the consumer buys based on need alone. There are many that believe that such practices are capable of drawing business away from the large corporate entities and back into a customer-focused business format.
Brand Conscious
The ultimate recognition when Bill Dedman said -Brand names are well known to business school professors, but only one professor is a brand name herself. Call her Professor Oprah. There can be no greater appreciation when one’s own name becomes a brand in itself and it is accepted globally. Even our fictitious “Gabbar Singh” is a brand representing a certain quality of person, albeit stereotypical.Some brands come out to be very powerful as Sara Blakely puts it, It’s the power of the brand. We’ve never formally advertised. I don’t know if you are familiar with this snippet, Half a circle, full a circle, half a circle A. Half a circle, full a circle, right angle A. We, as kids in the late 60s used this as a brainteaser to confuse our friends, the answer to which was. This is the power of the brand when it becomes a part of everyday life.Look at the truth behind the following:
*How many of us use the term “photocopy”? We mostly use “Xerox”.
*Do we say “search the Net”? No. we say “Google it”.
*Seldom do we say “petroleum jelly”. We always say “Vaseline” which is a trademark of Unilever.
*”Walkman” is a Sony brand. The generic name is “Personal stereo”.
*We say “Ziploc” and not “Zipper storage bag”.There are numerous such examples, many of which would surprise you such as, Aspirin (acetylsalicylic acid), Bikini (two-piece swimwear), Cellophane (transparent regenerated cellulose sheets), Dry ice (solid form of carbon dioxide), Escalator (moving staircase), Kerosene (combustible hydrocarbon liquid) and Thermos (vacuum flask).What is a brand? As defined in BusinessDictionary.com Unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors. Over time, this image becomes associated with a level of credibility, quality, and satisfaction in the consumer’s mind. Thus brands help harried consumers in crowded and complex marketplace, by standing for certain benefits and value. Legal name for a brand is trademark and, when it identifies or represents a firm, it is called a brand name.In other words, a brand goes beyond a mere name or a logo or icon. It is a promise to your customers of a certain kind of product or service. A brand combines several elements which include logo, words, type font, design, colors, personality, price, service, etc. You should also look at the attributes of your product/service and incorporate them into your brand. When you think of SONY you immediately get the picture of top quality consumer electronics and BENZ reminds you of best in class German engineering in automobiles.*Your brand is your public identity, what you’re trusted for. And for your brand to endure, it has to be tested, redefined, managed, and expanded as markets evolve. Brands either learn or disappear. Lisa GanskyWhy do you need a brand? Every company needs a brand including startups. With the short attention span of customers in today’s environment, standard advertisements do not register. When you watch TV how many commercials do you view or remember? Maybe, only the radically unconventional ones or those related to well known brands and there too you may not remember the actual advertisement.What goes into the making of a brand? The creation of a brand is a complex and time consuming but extremely crucial activity. Here, let me show you some of the elements and their impact:
*Name: This is not just a word or a set of words. “Apple” or “Idea” is not just a word; they provide a feeling, a promise. In the case of Apple the promise is of quality and exclusivity. In the case of Idea it is technology reaching out to the common masses.
*Logo: This is the visual representation that identifies the brand. The LIC logo of a pair of hands holding a lamp symbolizes to secure/protect the light of life.
*Signature phrase: A very important component for any brand. We all know “The Taste of India” is associated with AMUL (Gujarat Co-operative Milk Marketing Federation Ltd).
*Graphics: The graphical design (shape, color, font, etc.) of the entire brand including the logo. Air India has mascot in the “Maharaja” as well as a logo.The Centaur that has now been replaced by a red colored flying swan with the “Konark Chakra” in orange, placed inside it. The design and color combination on each aircraft also contribute to the brand.
*Shapes: The distinctive radiator grill of the Rolls Royce automobile is never changed across its numerous models.
*Sounds: Tunes and musical notes add to the experience. The chimes of Microsoft Windows, Mozart’s 25th Symphony used for Titan watches.There are other elements such as scent and taste that can also go into making of your brand. Companies have even used the services of linguists to help create their brands.”People need patience. It takes time to build a brand.” Carmen BusquetsAchieving a level where your brand becomes a part of daily jargon can take years and may or may not signify something good for you. For some of these brands the owner companies have completely dominated the market and they continue to reap the benefits. For most, however, the owner company has faded into oblivion while the brand lives on.