What are Good Resources to Learn Trading in Foreign Currencies?

Margin trader shocked by speculation loss 

Actual Question

What are some of the good resources to study about Forex markets and Forex trading?

Answer

Dear Friend!

Sorry, I do not trade stocks, commodities and forex.

I also request you to kindly desist from doing so.

Actually it is not trading but speculating which is very dangerous.

The trading lots are very big and the margin is low, which magnifies the gains/ losses many folds. Mostly people incur losses only.

Very long time back I used to trade in stocks and incurred huge loss and since then stopped trading and became a value investor.

You want become really rich and accumulate a huge wealth you can surely and safely achieve these objectives through value investing.

I have suggested a few articles for you to read. They talk about stocks but not about forex and commodities but in reality when we talk about trading all are the same and all the risks are same.

Thank you,

With Best Regards

Anand

Suggested Reading:

• Day Trading
• Margin Trading Definition
• Can One Get Rich From The Stock Market?
• Is the Stock Market a Place to Make a Fast Buck?
• Is There A Mathematical Formula for Option Trading?
• How Can I Become a Millionaire Quickly?

How Can I Analyse the Financials of a Company?

Picture depicts the concept of financial analysis

Dear Friend!

Thank you very much for the thought-provoking question. But the answer is very difficult as financial analysis is a vast subject.

Still I will try my best to answer your question.

The financial statements form the basis of financial analysis of a company and there are three key financial statements as follows:

1.     Balance Sheet

2.     Profit and Loss Account

3.     Cash Flow Statement

The balance sheet or the statement of affairs lists the assets and liabilities. From the balance sheet we can derive the strength of the company to meet its liabilities and obligations through three short-term liquidity and long-term solvency ratios as follows:

1.     Current Ratio

2.     Debt-Equity Ratio

3.     Total Outside Liabilities/ Tangible Net Worth (TOL/ TNW) Ratio

The profit and loss account explains how the changes in the balance sheet between two dates have taken place. It throws light on the profitability of the operations of the company. Following are the key profitability ratios that can be derived from the study of the profit and loss account:

1.     EBDITA

2.     EBT

3.     PAT

The cash flow statement is a very important but often neglected financial statement. Cash generated from the operations after meeting the increase in inventory, receivable and other current assets, called free cash flows is especially important. Many companies show consistent profits but those profits are not sufficient to meet the working capital requirements and are forced to borrow which in turn erodes future profitability and the company is trapped in a vicious cycle negative operating cash flows and borrowing to bridge the gap.

Suggested Further Reading:

On this blog a number of articles and financial analysis reports of Indian companies listed on the stock exchanges are available:

• What Is Financial Statement Analysis?
• What are Good Books for Analysis of Financial Statements?
• For reading: Research Reports and
• For download in pdf format: Free Downloads

I suggest you study a few and you will get practical experience.

Thank you,

With Warm Regards

Anand