Your Questions About Profitable Trading Plan

Maria asks…

Is forex trading profitable?

Do you think forex trading is profitable…I am planning on start with a small investment. Which website would be the best?

John answers:

Forex trading can be profitable if you have realistic expectations…

…and if you do not succumb to all the hype, especially the notion that it’s a great way to “get-rich-quick”. It’s not.

As with any endeavor, take the time to *learn, learn, learn*. And gain experience as a trader. There are no shortcuts to success.

Here are some guidelines to help you along the way:

* Never ever risk money to forex trading that you cannot afford to lose (i.e., your rent money, food money, etc.).

* Even when you’re trading with money that you *can* afford to lose, treat it as money you cannot afford to lose. Otherwise, you won’t give it the necessary respect to protect it and you’ll end up gambling instead of trading.

* This leads to the first rule of trading…”Protect thy capital”. Most beginner traders believe the first question to ask in any trade is “How much money can I make?”. Wrong! The first question to ask in any trade is “What’s the risk of losing my capital?”.

* For those scam forex systems and Expert Advisors you’ll likely run into: If it sounds too good to be true (i.e, 1000% returns in only a few months), it probably is.

Good luck!

Carol asks…

Why do the rich behind carbon trading pay no tax on the vast profits made from it?

Private Eye, an investigative magazine based in London, reports:

“CARBON emissions trading might be useless at tackling climate change but it is proving to be highly profitable for the financial engineers behind it – men like the godfather of pollution trading, an American called Richard Sandor, who was one of the founders of financial derivatives in the 1980s at junk bond trader Drexel Burnham Lambert.

It was at Drexel Burnham Lambert that Sandor pioneered the “collateral mortgage obligations” that eventually brought the financial markets to their knees. He was also architect of the first pollution permit trading scheme (in sulphur emissions) in the US in the 1990s [. . .] Sandor meanwhile has been a big mover behind plans for a mandatory trading system in the US that would see his company’s income multiply.”

The Eye notes that the Exchange set up by Sandor and others made over £11 million ($17 million) and yet the company pays no tax on any of this profit as [quote] “Climate Exchange plc is registered in the tax haven of the Isle of Man, where, according to its accounts, “it is subject to tax at zero percent”

As the article concludes: [QUOTE]

“This kind of tax planning requires plenty of carbon-intensive jetting off to board meetings in whichever countries the directors want their companies to be tax resident. As a Climate Exchange plc spokesman told the Eye: “They’re always travelling.” This might not do much for the planet but it’ll be good for business when airlines are forced into the trading scheme from 2012.”

So why have governments around the world let people like Sandor – largely responsible for the derivatives that bought the world’s financial system to the brink of collapse – get away with paying no tax on the vat profits made from the trade in hot air?

Read the whole article at

John answers:

Graft is a major purpose behind carbon trading. Governments never tax that.

Sharon asks…

Is this a good plan for my future success?

Well I’m an immigrant from Russia. I moved here as a kid with my mom. Growing up ive been pretty alone. Im very independant for better or worse.. I dropped out of high school when i GPA went down from 3.4 to 2.7 even though i went to this placement and got straight A’s my GPA went down i said screw it. SO im starting community college and then transferring to a university. University of Illinois, Depaul, Miami University, and Syracuse happen to be my top choices. I have a mind for business/math. I’m not in anyway academically challenged. I can get straight A’s no problem if i just set my mind on it. The stock market is my passion. I think of myself as a George Soros type. I will transfer with a high GPA and phi tetta kappa honors society membership. When i transfer i will join business/trading clubs. I will network and land a trading position at some firm in NYC or Chicago. Then i will return and get my MFE at an ivy league school. Then I want to go on to hedge funds and eventually start my own and manage billions of dollarrs. This would be success for me. Its my dream that ive had for 5 years now. I want to be able to live and travel work for myself no answer to anyone. Financial freedom through something i love and do well …. now does that plan sound good? The ivy league part for my masters is so i can network and raise billions thats the key.. if i cant go to an ivy league ill be stuck in the millions, still that would be plenty.
I’d hate to be in investment banking or something similar. I’m more into risk/reward business. Venture capital an interest. Poker my hobby. Forex,Stocks,Futures, options trading is my main focus though.

btw im working at mcdonalds saving up money. I just turned 20 and dont even drive a car as i see it a financial blackhole with not profitable outcome. And ofcourse live with parents who are helping pay for community college but when i transfer i will be on my own…

deep inside all day everyday i feel that i will succeed… despite recent loses in poker and forex im still opptimistic. No matter what happens i will still believe. Im a very hard worker and ofcourse passionite about finance. I have a good chance right?

John answers:

The key to success is passion and it sound like you have plenty.

James asks…

What will Bush’s response be to Blair and Schwarzenegger’s plan to fight global warming?

“Britain and California are preparing to sidestep the Bush administration and fight global warming together by creating a joint market for greenhouse gases.

The aim is to fix a price on carbon pollution, an unwanted byproduct of burning fossil fuels like coal, oil and gasoline. The idea is to set overall caps for carbon and reward businesses that find a profitable way to minimize their carbon emissions, thereby encouraging new, greener technologies.

The world’s only mandatory carbon trading program is in Europe. Created in conjunction with the Kyoto Protocol, a 1997 international treaty that took effect last year, it caps the amount of carbon dioxide that can be emitted from power plants and factories in more than two dozen countries.

Companies can trade rights to pollute directly with each other or through exchanges located around Europe as long as the cap is met. Canada, one of more than 160 nations that signed Kyoto, plans a similar program.

Although the United States is one of the few industrialised nations that hasn’t signed the treaty, some eastern U.S. states are developing a regional cap-and-trade program. And some U.S. companies have voluntarily agreed to cap their carbon pollution as part of a new Chicago-based market.

Bush has resisted Blair’s efforts to make carbon reduction a top international priority. After taking office, Bush reversed a 2000 campaign pledge to regulate carbon dioxide emissions, then withdrew U.S. support from the Kyoto treaty requiring industrialized nations to cut their greenhouse gases to below 1990 levels.

The United States is responsible for a quarter of the world’s global warming pollution. Bush administration officials argue that requiring cuts in greenhouse gases would cost the U.S. economy 5 million jobs. Instead, the administration has poured billions of dollars into research aimed at slowing the growth of most greenhouse gases while advocating a global cut on one of them, methane.”

John answers:

Yup. Arnold is what a Republican should be.

What’ll Bush do? Not a damn thing. He’s a lame duck at this point and his credibility is in the toilet. Only the religious right and neocon extremists support him any more. The rest of the country has (hopefully) realized the mistake they made back in ’04.

Charles asks…

Is this compensation package considered insider trading?

Say I work for a PUBLICALLY traded company, such as the MacDonald’s Corporation. I am a regional manager, who is in charge of managing 10 MacDonald’s restaurants, which bring in 10 million dollars in profits to the company annually, and the ten MacDonald’s are worth about 200 million to the corporation (it’s stock). One day, I decide that I want to be compensated more than I currently am being, so I come up with a compensation package idea for myself. Here’s how it goes- I give MacDonald’s corporation 5 million dollars of my own money, then, I state that I will improve the net profit of my sector by innovating to improve efficiency, cut costs, and improve revenue, and that after do so, (adding lasting value to my sector), when the financial reports/ business valuations for my sector show that I have added value to the restaurants under my management (say I increase the profitability by 50 percent, 5 million dollars annually, 100 million dollars increase in worth), that I would get 25 percent of the increase(50 million dollars), by means of a note payable by the MacDonald’s corporation to myself. However, after I sign the contract, if the net worth of my sector is to go below what it currently is at during the time when the contract’s stipulation are carried out, then I would lose a significant portion of the 5 million dollars I had put into buying the contract (which is very similar to call-options, but is only a negotiation between myself and the corporation).

I’M thinking that this WOULD be considered insider trading because of the fact that, before signing the contract and handing over the 5 million dollars, I may have insider knowledge of how I think my region is going to do next quarter. Lets say before I sign the contract, I think that my region will be making more money next quarter, because of factors unrelated to my plans to make my sector more profitable ( say I have “insider knowledge” that several of my units [restaurants] will be acquired by some sort of conglomerate firm, thus causing me to believe the worth of my sector will skyrocket ). By entering into this contract, then, which would ultimately end up in ME getting capital (in the form of the note payable) from MacDonald’s corporation, the shareholders would lose a slight bit of value because the shareholders would lose a tiiiiiiny sliver of their stocks gain( due to the acquisition by the conglomerate), which they wouldn’t have lost had I not entered into the contract, and not been awarded 25 million? Basically, I could be charged with knowing that the stocks price was going to go up, thus gaining capital from the corporation via insider information, even if I was entering the contract only because I though I would make the sectors worth go up through adding value (again, via entrepreneurial innovation) to my sector?

If this is considered insider trading, would it be illegal if I were to have this type of compensation while employed at a company which is privately owned, such as Kaiser?


John answers:

McDonalds is spelled MCdonalds not MACdonalds. Since you don’t know how to spell McDonalds how are you going to come up with $5M.

No this is not considered insider trading. Insider trading is ONLY when you make stock transactions based on insider information (buy, sell, or some other stock transaction). Many employees know “secrets” about how the business is run.

If you are a Regional Manager at McDonalds, how can you also work at Kaiser?

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