10 ways to use your credit card right!

Your credit card can be the single most important factor in improving and increasing your credit score. On the other hand it can also plummet your score to dark depths if you are not careful.

Think smart and use your credit cards to your advantage.

Here are some pointers on what to do and what not to do in order to achieve this reality.

1. No debts so far. Opting for a brand new credit card for the first time

This makes sense for your credit score. Making use of a credit card judiciously will help you improve your credit score. Just make sure you open your credit card with a respected and popular brand name.

2. Opening a new credit card account

When you already have a couple of credit cards, opening a brand new credit card account can cause a dip in scores. By all means obtain a new credit card if you are not planning to get into more debt, else think several times before opting for one.

3. Low credit limit

Keep a tab on the credit limit of your credit card. Open a credit card account with a company that will provide you with the highest credit limit possible. High credit limits, even if they are not used will add merit to your credit score and improve it.

4. Closing credit card accounts

Even if you do not use your credit cards, don't rush to close them. Keep them as long as you can. If you must close them, then do that over a period of time. Closing too many too quickly will harm your credit score significantly.

5. Choosing the ideal credit card to close.

The number of years you hold a credit card account has an impact on your credit scores. Hence, let your oldest credit card be, if you must close a card opt for the most recent cards and close them one at a time, maybe once a month over a period of time.

6. Rotate usage of multiple credit cards

It is a smart move if you utilise different credit cards for your various different expenses instead of constantly using only one credit card for most of your purchases.

Make it a point to use each credit card you have once in six months. Some credit card companies might even close your account if they feel you don't use the card at all. In such instances, it affects your credit score.

To be on the safer side, try and use every card from time to time.

7. Bargain for a lower interest rate

If you have never defaulted on a payment for a few years, make use of your good repayment track record and speak to the bank officials for a better bargain.

Request them to lower your interest rate citing the good track record you hold with them. Keep following up with your bank from time to time and you may just get your wish!

8. Request for an increase in credit limit

You may have purchased your most recent card because of the higher credit limit. If at a later date you wish to close some of your cards and you know it makes better sense to close the most recent card, you have a dilemma.

The most recent card has the highest credit limit. The oldest card has the lowest credit limit. What do you do? In such instances, if you have a good repayment track record, approach the bank and negotiate for a higher credit limit especially since you have been their customer for quite a few years.

Most banks will oblige and you can then proceed to close the most recent card if you absolutely must do so.

9. Keep a self-imposed credit limit, which is much lower than the actual credit limit

Never exceeding 40 per cent of your credit limit has a very beneficial effect on your credit score. This shows your credit limit is high but you have not burnt it up and have plenty in reserve.

This logic helps you attain a much higher credit score. This is the same logic that suggests you should not close any credit card accounts, as they collectively will provide you a high credit limit, which is good for the score.

10. Paying off credit card dues quickly will dramatically improve your credit score

Try not to encourage too much credit card debt. Be wise and pay the dues quickly and keep rotating your cards. Paying off dues will cause a spike in your credit score, which is highly favourable.

Abitha Deepak, http://www.BankBazaar.com

Originally at: http://business.rediff.com/report/2009/jun/19/perfin-10-ways-to-use-your-credit-card-right.htm

Understanding stock market jargon

Like everything else in life, stock prices are driven by supply and demand. Supply is synonymous with bears and selling. Demand is synonymous with bulls and buying.

As demand increases, prices advance and when supply increases, prices decline. When supply and demand are equal, bulls and bears slug it out for control.

Where is support established?

As the price declines, buyers become more inclined to buy and sellers less inclined to sell. A point where demand overcomes supply and prevents the price from falling becomes a support.

Human behaviour is responsible for the existence of supports and resistance.

Many investors who have zeroed in on a particular stock may not commit their resources as prices are falling. Once the price starts rising, they rue the fact that they did not buy it when it was low and vow to buy it if prices come back to those levels.

If buying demand overcomes supply at those levels, prices will rise from that level again, reinforcing the psychology. The significance of the support level increases the more times the price bounces back from that level.

Support does not always hold and a break below support signals that the supply from bears has won over the demand form bulls. A decline below support indicates a new willingness to sell and a lack of willingness to buy.

Once support is broken, another support level will have to be established at a lower level. Sometimes price movements can be volatile and an intra-day dip below support is not considered a breach of support, which we call a 'whipsaw.'

What is resistance?

As the price advances, sellers become more inclined to sell and buyers are wary of committing resources at high levels. At a point where supply exceeds demand and prices stop rising, further movement is resisted.

Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further.

As the price falls from such a resistance point, investors who were hoping for a further rise now realise they have missed on selling the stock. And when prices rise to this resistance level, they remember to sell this time, which creates pressure from all such investors who were left holding the baby earlier.

This makes the resistance point a tough nut to crack.

The significance of the resistance level increases with the number of times the price reverses from that level.

Just like support, resistance does not always hold and a break above resistance signals that the bulls have won out over the bears. A break above resistance shows a new willingness to buy and/or a lack of incentive to sell.

Support equals resistance

Once the price breaks the support and travels lower, it turns into resistance. Similarly, if the price pierces the resistance and goes further up, the resistance level then becomes the support.

A mere intraday violation of the support and resistance levels is not enough. It should close above the resistance or close below the support to qualify as a successful breach.

The previous day's, week's or month's low are common examples of support. Similarly, the previous day's, week's or month's high acts as a resistance.

Round figures like 40, 100, etc also act as general resistances. The issue price of a stock also acts as a support or resistance for IPO listings.

If a stock reaches a support level, it pays to give attention to a sign of increased demand and for a potential reversal, similarly look for signs of extra supply at resistance levels.

If a support or resistance level is broken, it signals the relationship between supply and demand has changed and one can initiate a trade in that direction with that level as a 'stop loss.'

The writer is director and head of research, Anagram Capital.

Vinod Sharma

Source: Business Standard

Originally publised at: http://www.rediff.com/business/report/2009/jun/22/perfin-understanding-stock-market-jargon.htm

9 great tips from stock market masters

Great traders are created, not born. Those who lack discipline, persistence and self-confidence lose the never-ending challenge of trading profits. But those who survive the battle by using the tools used by the masters enjoy the fruits of consistent success.

Different master traders use different methods and approaches. But what is that one aspect that the greats all agree on, masters ranging from George Angell, day-trader, technical analyst par excellence; Gerald Appel, father of MACD, one of the most widely followed timing tools; Bruce Babcock, developer of trading software; George Lane, father of stochastics and one of the most experienced technical analysts in the world; Robert Prechter, the pre-eminent Elliott Wave analyst whose forecasts are followed by traders throughout the world; Welles Wilder, the man behind Delta and RSI and developer of technical tools that have revolutionized the trading world; and Larry Williams, colourful, controversial - a legend in his own time.

No, it's not some glamorous or sexy new fail-safe technique. Rather the one aspect of universal agreement among master traders is the importance of discipline. Discipline is probably the most worn-out term in trading. But that doesn't alter its importance. Also, saying the word is one thing; truly understanding its dimensions on an operational or behavioral level is another. Here are the golden rules of disciplined trading.

Be persistent

This is perhaps the single most important quality a trader can possess. Trading requires the ability to continue trading even when results have not been good. Due to the nature of markets and trading systems, good times frequently follow bad times, and bad times frequently follow good times. Some of a trader's greatest successes occur following a string of losses. This is why traders must be persistent in applying their trading methods and continue using them for a reasonable period of time.

Accept losses

Another important quality that the market masters emphasise is the ability to accept losses and to take them promptly. Perhaps the single greatest downfall of all traders is the inability to take a loss when it should be taken. Losses have a nasty habit of becoming worse rather than better. Unless they are taken when they should be, the results will not be to your liking.

Avoid overtrading

Too many traders feel that they must trade every day. Such traders are addicted to trading. The fact is that some days offer few if any trading opportunities. The trader who wishes to preserve capital and avoid losses as well as unnecessary commission charges should understand that trading, other than mechanical day trading, is not an everyday event. There will be days when no trades are indicated. This is for the best.

Specialise

Successful trading is a time-consuming undertaking that requires close attention. Which is why many market masters specialize in certain markets. In most cases, successful trading requires diligence, follow-through and persistence. Because most trading techniques require close attention, traders should not be involved in too many markets at one time.

I suggest that five to seven markets are sufficient for most traders. In fact, for new traders, I recommend specialising in one or two markets and attending to them thoroughly to develop your skills and increase your overall profits.

Begin with sufficient capital

Perhaps one of the worst blunders that any trader could commit is to trade with insufficient capital. Virtually all the market masters agree on this point. The argument may be made that the futures trader does not need to have substantial capital in his or her account since trades are closed out at the end of the day and therefore the necessity for sufficient margin to maintain positions is eliminated.

While this may be true, those with limited funds cannot play the game as long as those with larger funds. In any venture it is important to start with sufficient capital so that the trader will not feel pressured to perform and can allow the particular trading system or methods sufficient opportunity to ride through periods of poor performance.

Use news to your advantage

Many a trader has learned the hard way that following the news frequently leads to losses. However, I have discovered ways in which the trader can use the fundamental news or developing international, domestic or political news to his or her advantage.

Do not be a follower of the news; rather 'fade' the news. Use the news to exit positions that you probably established before the news became public knowledge. I firmly believe in the old market dictum: Buy on rumor, sell on news.

On an intra-day basis, markets are very sensitive to news well before the news is known by most traders. Insiders buy and sell on expectation, sometimes based on rumor, frequently based on fact. They establish positions before the general public is aware of the news; once the news has become public knowledge, they take advantage of the surge or the drop in prices to exit positions.

Take advantage of brief price surges

At times, markets will drop or rally quickly, seemingly in response to no news. What may be happening is a rumor on the trading floor, a large buyer or buy order, or large seller or sell order of which you are unaware. Such brief price surges or drops are opportunities for you to exit positions at a profit or to establish a new position. It is important to develop this quality as a futures trader since it is entirely consistent with the futures trading objective.

Stick to your goals

Above all, remember that as a trader you have one major goal: to make money. To do so, you must be particularly aware of your net profits at all times. My advice, which is based on many years of trading, is to set yourself specific standards and conditions under which you will begin to liquidate positions. Do so while the trend is still in your favor. You may either begin to close out your positions at that time or you may use a follow-up stop loss procedure to 'lock in' existing profits.

Use market sentiment to find short-term and day-trading opportunities

I have already discussed the importance of going against the majority opinion to find profitable trading opportunities. I believe that this is one of the most important qualities a trader can possess. While there is certainly a great deal of money to be made in trading with the existing trend, it is also important to know when the existing trend has reached a possible turning point.

One of the best ways, if not the best way of doing this, is through the use of market sentiment. The trader must also be a contrarian. This does not mean that you must buck the trend, but it does mean that you must always be aware of whether sentiment is very high or very low.

This will give you important clues as to whether you should be quick to take profits, whether you can allow profits to run and whether you should look for trading opportunities on the opposite side of the existing trend.

I have learned, after many years of trading, that the major difference between those who are successful traders and those who are not is found in their discipline, their psychological makeup and in the skills they have acquired as traders rather than in the trading systems, they use.

(Excerpt from Market Masters by Jake Bernstein: http://www.visionbooksindia.com/details.asp?isbn=8170944112 )

(originally published at: http://business.rediff.com/report/2009/jun/17/perfin-9-great-tips-from-stock-market-masters.htm )

Buying a Singapore Property

The population of Singapore is ever increasing and it looks to be obvious that buying a property will always give you good returns. However, I need not tell you particularly that the price of homes is fluctuating and timing is becoming more and more crucial. So, if you are wondering: should I buy? or shud i not....read on.

The best option for a first time buyer is ofcourse to buy direct from HDB, either through the half yearly sale or the BTO etc...coz we can stay with our parents until the property is ready for occupation. And when u r buying from HDB, timing isint a big deal really. Just buy it and stay there for 5+ years. Even if you have money to buy a condo, i recommend buying a HDB (as long as you are eligible - under 8k salary) and keeping it. If ever you have more money, you can consider buying a condominium.

I am not recommending you to buy a condo by selling your HDB - that according to me wud be the most foolish thing to do ever. You may think you want to sell ur HDB coz u think the price has increased, but think again. Did you give advance payment for a condo abt a year ago when prices were low? or do you want to book a condo now? HDB prices increased means most likely condo prices also have increased. It wud be foolish to put ur HDB for sale and start looking for a bigger HDB or a condo coz you are are simply paying 1%+2% buying selling fee to the property agent. So, even before u started, you shoud account for a "roughly" 3% loss.

It is just like the stock market. You want to keep on buying/selling the stocks/property. The person who really gains is the share broker/property agent. A golden rule in property/stocks is this: You can buy/sell only when you have a primary property for staying. As for stocks, you should have 60-75% of you investment in good stable stocks and the remaing for trading (buying/selling).

Your friends may have done it, your colleagues may have done it. They have done it doesnt mean you must do it. I recommend changing the house/upgrading only for SERS. You can buy a second property if you have the money and want to make an investment.

A word of caution: flipping property is for high fliers, the very rich who dont care if there is a slump for a short while or for the property agent who has a little more money coz he neednt pay the agent fees.

A final word: If you are considering to buy a condo and thinking -- the stock market has increased and property market is also increasing by looking at the increased sales, then i wud like to suggest the following. If you are buying it as your primary property, do go ahead and buy it coz the prices may fall another 5% at the most and this loss wud only be a paper loss. So you need not really care - in the long term it wud be a good decision. If you are a property trader, you are better off waiting until nov/dec 2009 - buyjust b4 christmas.

Rickmers Maritime & FSL

Have been follwoing the shipping industry for a few years now. Read about shipping (both construction and orders) over capacity to the tune of 125% above that is required. However, I feel for the next 1-2 years, both Rickmers and FSL are good investments - FSL being slightly better than Rickmers.

I wont write here how I arrived at my target price, but will just mention the TP. Let us wait and see if what i say will be true or not.

Rickmers (Buy range): $0.51-0.54 until sept/oct 2009 (with CD for quarter) and $0.48-0.51 between oct2009 and april 2010 (XD for oct).

Rickmers (Sell range): $0.59 and above until september 2009 and $0.55 and above between Oct2009 and April2010.

FSL ( Buy range): 0.58-0.61 until December 2009. Too early to predict for 2010.

FSL ( Sell range): 0.68-0.70 until December 2009.

My first blog

Always thot "why shud i blog?", "No-one wud read my blogs" and never bothered to blog.

Now, I dont care whether if someone reads or not. I will just blog.