Amos Hostetter – World’s Best Traders Learned From Him

Amos Hostetter was the founder of Commodities Corporation. Located in Princeton, N.J., it became one of the most successful and influential trading entities ever. Ultimately, Goldman Sachs bought it out in 1997, so it is no more. This is where many of today’s best traders learned their craft. The list includes Ed Seykota, Michael Marcus, Bruce Kovner, Paul Tudor Jones, Louis Bacon, and others. These are some of the most successful and best traders the world has ever known.

Hostetter was a brilliant trader with rock solid trading principles. His success was astonishing up until his untimely death in 1977. I am going to share with you some of the reasons why he was so successful. What was his method? What were some of the main trading principles he implemented to get such superb trading results?

Trend following was the method that Hostetter implemented to achieve his amazing trading results. In my opinion, trend following is the most successful trading method. You can profit in up or down markets. There is no guesswork in your trading decisions. It does an excellent job of letting profits run, cutting losses short, and much more. I have been implementing the method of trend following for many years, and I will say its works exceptionally well.

To be successful trading the markets you need to follow principles that have been proven successful over a long time. Here are some of the principles Hostetter followed to amass a fortune trading the various markets.

Hostetter, a trend follower, said it is important to find a long term trend and ride it up. Stay with the trend until clear technical evidence tells you it is over. Patience is a key trait shared by most of the world’s best traders.

Money management is crucial. Hostetter believed in using stop loss orders to keep a loss small, if the market moved against him. He would also implement trailing stop losses to protect his profit as the market advanced in his favor. Stop loss orders are an excellent tool which I use on virtually every trade I make.

Hostetter believed that observation of the market gives the best tips of all. He said to follow your experience to exploit them, while only sticking to facts. It is important to do your own analysis and research. Become proficient at technical analysis. Learn the proven chart patterns, and analyze their price and volume action.

The keys to successful trading are to find a successful method that fits your personality. Trend following was perfect for Hostetter. Couple that with sound money management. Hostetter said to take care of your losses and the profits will take care of themselves. No truer words have ever been spoken in the world of trading. The world’s best traders know this well.

Global Accounting Information Systems – Some Assembly Required

Financial accounting and reporting can be challenging for many organizations, but for the world’s largest home furnishings company this proved to be especially difficult at the end of the 20th century. IKEA, the Swedish-founded global furniture giant based in the Netherlands operates 280 retail stores in 26 countries, 29 trading offices in 25 countries, and 11 distribution centers in 16 countries. IKEA also owns and operates its own industrial supplier called Swedwood, which has 5 production units in 5 countries. Add to the mix over 1000 other suppliers across 55 countries and the framework is set for a truly global organization where the potential for growth is seemingly limitless, however at the same time it creates a complex global network where accounting information can be hard to manage.

IKEA has experienced solid sales growth every year since its first store opened in Almhult, Sweden in 1958, yet the company has just recently started to grow at a rapid pace. Since 2000, annual sales have more than doubled from 9.6 million euros to 23.1 million euros in 2010. IKEA is able to achieve these results for a number of reasons, such as its strong focus on supply chain management, raw material sourcing, cost management, manufacturing efficiency and economies of scale, and company-wide culture of frugality and doing things within small means. However, despite all of these strong attributes the success of any company is highly dependent on its ability to manage cash flow and financial information so that it can make strategic business decisions and drive future growth.

One often-overlooked aspect of a company’s financial success is the quality of its accounting information systems. Because of its global nature, IKEA was forced to examine its financial system in the late 1990’s due to euro compliance regulation and the Y2K threat. Roger Neckelius, IKEA’s Chief Information Officer and other IKEA executives quickly realized that the company’s myriad of antiquated accounting systems was inadequate for their short term goals of regulatory compliance and their long-term goals of a common, streamlined system that could be used across the IKEA world.

Ulrika Martensson, the Project Manager responsible for implementation of the replacement system began her search with certain criteria that had to be met, such as having one system for all of IKEA that was flexible enough to handle the different needs of the various business units and its users. The system would have to be capable of a quick implementation, and possess the ability to grow along with the company.

Martensson got everything she wished for when IKEA decided on Coda Financials from the United Kingdom, but wasn’t quite prepared for the amount of work that was required to tailor their product to IKEA. The Coda system required that every type of financial transaction was “defined” such as payables and receivables. However, in a way this was a blessing in disguise because of IKEA’s enigmatic and complex organizational structure. As mentioned earlier, IKEA has a vertically-integrated supply chain with numerous components all over the world. But it is also a privately-held company with a unique “ownership” structure. The IKEA Group is the group of companies within IKEA that handles the core elements of the business such as product research and development, production and distribution, and retail sales. The IKEA Group has a parent company called INGKA Holding B.V., which in turn is owned by the Stichting INGKA Foundation, established by the IKEA’s founder Ingvar Kamprad. Furthermore, the Stichting INGKA Foundation funds the Stichting IKEA Foundation, a Dutch charitable organization which supports humanitarian initiatives throughout the world. Because the Coda system was customizable, it allowed for a much easier conversion process for the variety of business units within IKEA.

Martensson also took advantage of the system’s flexibility to solicit input from end users across IKEA and tailor the system to their needs. This is an ingrained part of the IKEA company culture – to work together and come to an agreement before making a decision. However, when it comes to financial information system standardization and compliance this democratic approach isn’t always ideal. Martensson admitted that she gave the users too much leeway and instead should have taken a firm stance that the users were required to adapt to.

Nonetheless, Martensson and her team made quick progress rolling out Coda to 12 countries over a 4 month period. They overcame differences in foreign banks automated payment systems, Europe’s complicated VAT system, and the complexity of IKEA’s organization itself to achieve their goal of a September 1st, 1999 go live date.

IKEA’s journey in the late 1990’s to switch over to a common financial system shows the effect of globalization and the need for companies to adapt in an ever-changing business environment. Not only did the successful implementation of CODA ensure regulatory compliance by IKEA, but it also enabled the company to be more transparent in terms of financial reporting throughout the organization. Executive management no longer had to extract information from the myriad of financial reports that existed prior to the CODA implementation; it had common information in a common format at its fingertips to help make sound decisions to secure the long term financial success of IKEA.

Increase Your Wealth With Stock Market Investment

Investing in the stock market is one of the fastest ways to maximize your returns. However, this form of investment also comes with a high level of risk. While it is common for investors to grow rich overnight with stock market investments, it is equally common to lose a lot of money in the stock market.

So then how can one leverage this investment choice without taking on too many risks? Here are a few guidelines that can help you to make the right stock market investments at the right time.

Background Research

For investors, doing background research on which companies to invest in is the key to building profits. It has been observed that first-time investors usually invest in big companies as it is considered a safer option. You can also look deeper and focus on the companies of tomorrow but you should know how to identify them. This is where background research comes in handy. You need to understand industry trends to make the most of your stock investments.

Company Health

To enjoy best returns it is advisable to invest in good companies. You can determine a company’s quality by its financial health and track record with customers and investors alike. For you to keep earning returns the company should continue to perform well in the future too.

It’s All About Timing

For success in the stock market, it is very important to invest at the right time. Making timely decisions to buy and sell stocks is the key to earning big returns.

Let Your Portfolio Evolve

Over a period of time, as companies change their strategies, you should also allow your portfolio to evolve. It is better to spread investments over a diversified portfolio to reduce risks. This is a common strategy investors use for long-term success. Never put all your eggs in one basket is indeed the golden rule for stock market investment.

Reinvest To Multiply Your Profits

One good strategy is to re-invest the profits earned from previous investments. This concept is called ‘Compounding’. As you re-invest the base of your investment grows and thus returns are higher. If you are a proactive investor and you are reinvesting profits earned then there are good chances your returns will be very good in the long-term.

Avail The Services Of An Investment Manager

If you don’t have enough know-how on stocks and trends then you can choose to hire the services of a good investment manager. If you have a good risk appetite, then you can give your investment manager some flexibility. Remember while losses are part of the investing process, a good investment advisor should be able to come up with a strategy to keep this at a minimum while maximizing your gains.

Today there is so much information available online and you can also use an online trading platform to buy and sell stocks thus making stock investments easier than ever before. Sign up with a reliable online provider and give it a shot!

Leverage Your Returns With CFD Brokers

A contract for difference popularly known as CFD is an arrangement made in futures contract through which the client and the broker make payment in cash rather than in the form of goods or securities. This type of arrangements is generally popular in forwards or futures contracts. Amount payable under a CFD agreement is nothing but the difference in the amounts while entering and exiting a contract. The agreement under a CFD contract is executed between a buyer and a seller in which the seller will pay the difference between the current price and the price at the time of making the contract. There are numerous online and offline brokers who facilitate this kind of contracts in these days.

As CFD trading happens mostly in capital markets and almost all the transactions of capital markets are digitized the brokers for CFD transactions can also be met online. There are many online CFD brokers who offer various services to both seller and buyer segment people. The services by CFD brokers can be availed by any person who is investing in shares of any kind. If you trade on equity through a CFD agreement then the contract will become an equity derivative. Likewise you can trade in any of the other major financial instruments as well as in commodity market instruments.

The CFD brokers facilitate a transaction between the buyer and seller of any derivative instrument by speculating the price movements of that particular instrument. This is not as simple as we discussed as it involves careful and clear understanding and analysis of many aspects that effects directly or indirectly the price movements of a particular share or security. Hence, a professional assistance is must for both individual and corporate entities that are planning or already involved in CFD trading.

And in the era of digitization as everything is happening online you can find a CFD broker online who can assist you in your CFD trading. There are entities that hire these professionals and offer their services both in online and offline modes and there are also people who work as individual CFD consultants. Meeting either such consultants and trading in CFD has proven to be a successful strategy for many CFD traders. Trading in CFD and taking assistance from a CFD broker is a common phenomenon in western part of the world where as in eastern world it is still in progress.

There are as many as CFD brokers available in the eastern part too but people are less aware of CFD transactions.

Begin Your Trading Career With Trading Stocks Online

Trading stocks online or online trading of stocks and shares is a common phenomenon in today’s stock trading segment. Although it is a common phenomenon around the world for few it is still a mystery. Creating an online trading account, buying and selling stocks, constantly tracking your investment is still being perceived as a herculean task by many. To get over with such perceptions the first and foremost thing you must know is to read a lot about markets and their movements. Besides reading, getting in touch with online stock brokers who have ample knowledge in the area of trading and managing stocks would be very much helpful for beginners.

After acquiring knowledge on stocks and getting in touch with online brokers it is always necessary to have ample information on stocks that you are investing. For getting enough information about various companies, their stocks and their prospectus you got to know few tips on trading stocks online. Let us look forward for few such tricks or steps which you have to follow if you are a beginner. You must start your online trading with research and analysis. Research and analyze the companies that are flourishing and the companies that are moving downwards. By this research you will be equipped with enough knowledge on stocks fluctuations and can easily identify the future prospectus of shares of respective companies. This step should be a rule of thumb for both beginners as well as for experienced online traders as this would lead them to choose the right stock.

Once you are done with research and analysis of stocks next step must be quite tedious for the beginners but cannot go further without this. You must get an idea on fundamental and technical analyses of stocks as these analyses are the sole runners of any stock market. Once you get knowledge on fundamental and technical analyses of stocks the next step is to understand the choices of an online stock broker and an investor like you. The traders choose a stock which is profitable for both the company and the client. But this should not be the case with the investors. Investor must choose a stock which is profitable and which can maximize his wealth. Knowing these differences and choosing stocks is key to your success in online stock trading. Once you are clear on the basics and concepts of stock trading creating an online trading account either with the help of an online broker or individually must be your next step.

Economic Turmoil and the Future of Brazil

For many years, Brazil has been an emerging economic hub, attracting investors from all over the world. The Brazilian economy saw an 368% increase in Gross Domestic Product growth from 2003 to 2011. In addition, Brazil took in almost half of Foreign Direct Investment flowing into South America during 2015. This doesn’t come as a surprise since it reigns as one of the major emerging national economies. However, Brazil has seen a recent economic downturn with increasing unemployment and a contracting GDP. In fact, the Brazilian government cut 2017 GDP expectations from 1.6% to 1% growth. Having been one the most lucrative foreign investments for governments to individual investors, what happened to the so-called “Country of the Future” and can Brazil regain its momentum?

Back in 2015, recession hit Brazil hard and the country is still struggling to get back on track. According to the CIA World Factbook, the economy contracted 32% from its peak in 2011 and unemployment reached a new high at 12.6% in 2016. Being based mostly on services, agriculture and oil, Brazil’s economy has a direct correlation with global demand. With global recession looming, Brazil is feeling the effects of a slow world economy.

Brazil is a top tourist destination offering beautiful beaches, a diverse culture and exciting festivals. However, with the world economy slowing down, people are less likely to travel abroad. Since the majority of the country’s GDP derives from the service industry, Brazil will not be able to rebound any time soon unless there is a major boost in consumer confidence.

The demand for Brazilian exports was slashed when its largest trading partner, China, entered into an economic slowdown of their own. The decrease in exports caused massive layoffs throughout the nation. The notorious economic downward spiral began by wary consumer spending as unemployment rose. Companies that tried to gain capital by borrowing in U.S. dollars found it difficult to pay back those loans as the Brazilian Real crashed 25% in the span of a year in 2015.

One of the major hits came from low oil prices and the corruption of Petrobras, a large oil company and Brazil’s largest source of investment. Brazil is major producer of oil, exporting $11.8 billion worth in 2015, according to the Observatory for Economic Complexity. OPEC delivered a major blow when the cartel decided not to cut oil production, causing oil futures prices to plunge. In order to cope with heavy losses, Petrobras was forced to sell off assets and halt future research and expansion plans.

As if things weren’t going poorly, Petrobras was also caught in a scandal with former Brazilian president Dilma Rousseff and other high office executives. From 2004 to 2012, the company had spent over $2 billion on bribes to politicians whom would allow the company to charge inflated prices for construction contracts. Now that the scandal has unfolded, Petrobras executives face jail time and the company as a whole is forced to pay billions in fines.

So what does the future hold for Brazil?

Although at the moment the future looks dim, there are still signs of hope Brazil can turn itself around. The Real has seemed to stabilize in 2016 and heads into 2017 with an upward trend. Moreover, experts’ GDP projections for 2018 through 2020 show promising figures that Brazil can restore pre-recession level growth.

Even more promising, U.S. companies are still showing faith in Brazil’s future. American Airlines plans to invest $100 million in an aircraft maintenance center in Sao Paulo. Brazilian Investment Partnership Minister Wellington Moreira Franco and many countries like the United States, United Kingdom, France and Japan agree there are still reasons to invest in Brazil. This should be seen as a sign of confidence that the Brazilian market will grow soundly with the support of both national and international investment.

“The World Factbook: BRAZIL.” Central Intelligence Agency. Central Intelligence Agency, 12 Jan. 2017. Web. 23 Mar. 2017.

“Brazil.” OEC – Brazil (BRA) Exports, Imports, and Trade Partners. N.p., n.d. Web. 23 Mar. 2017.

Learning From W. D. Gann – Trend Line Indicator

Many novice traders really like to complicate their trading.

In the beginning, they usually trade on tips from friends or workmates, or something they heard or read in the news.

If they survive the hit they will likely receive to their capital, they may soon come to discover technical analysis as a better way to get a read on price action.

However, often their beginning foray into technical analysis is to lock onto some common charting indicator such as the Stochastic and think they have found the Holy Grail to wealth. Unfortunately that bubble will soon burst when they realize that this and any other indicator only works during certain times and with some adjustment to the parameters.

If this happens to sound like you, and you are still in the game (I know, this is not a game. It’s a figure of speech), then there is hope for you yet. Let me introduce you to W. D. Gann’s “Trend Line Indicator”, which today might be referred to as the Swing Chart.

No matter what market you wish to trade, there are going to be a series of swing bottoms and swing tops that form trends of various degrees. These swing patterns occur on any time-frame, and they are the basic components in determining whether a market is in a bull or bear trend.

The Trend Line Indicator, or Swing Chart comes in several varieties. You can construct a 1-bar, 2-bar or 3-bar swing (I would not bother going beyond this).

The 1-bar swing chart is extremely short-term and is good for fine-tuning an entry. However, for the purpose of determining the trend of any consequence, the 2-bar swing would be my recommendation. In addition, it would not hurt to get the bigger trend picture by constructing a 3-bar swing chart as well.

To construct the 2-bar swing chart is quite simple. Starting from a clearly defined bottom or top, you would draw your swing line (Trend Line Indicator) either up for each new high (starting with the second consecutive higher-high) or down for each new low (starting with the second consecutive lower-low). To demonstrate, let’s start from a clearly defined bottom to draw our 2-bar swing chart line.

With a 2-bar swing chart, we need at least two higher-highs in order to advance our line up to that new high on the chart. So let’s say our starting bar (with the bottom low) is bar #1. The next bar (#2) makes a higher-high but not a lower-low. Our higher-high count is just one, so we do not yet move up our swing (trend) line. Now bar #3 also makes a higher-high and our #1 bar low is still holding. Therefore, we can move our line up to the new high of bar #3.

As each new bar makes a higher-high, we can continue to move our line up to that new high. If a following bar then makes a lower-high and lower-low, our line does not move up and our down count is one. If price resumes the upside move and makes another higher-high than our current highest high (that would be bar #3 in this example), our line would continue up to that new high, and every higher-high until we actually get two lower-lows to change the line direction.

So let’s say that after we’ve been moving our swing line up to each new high that we get a lower-low bar instead. Let’s call this bar #5. If we have been moving the line up to each new high prior to this new lower-low, our lower-low count starts at one. If we get a bar (#6) that makes an even lower-low than the low of bar #5 before another bar makes and even higher-high than bar #4 (which was the last higher-high bar where the line moved up to), our lower-low count becomes two and we would move the line down from the last higher-high (bar #4) down to the low of bar #6. Now for each bar that makes a lower-low than the low where our line is currently sitting (currently bar #6), we would move the line down to that new lower-low.

The bottom-line here (no pun intended) is that we need a count of two higher-highs to start a move up or a count of two lower-lows to start a move down. Once the count has been met, we then could continue in that direction for each bar that exceeds the price where the line is currently sitting.

There are times when a bar makes neither a higher-high or lower-low (called an Inside Bar, or a “within bar” by W. D. Gann). Since they make neither a higher-high or lower-low, do nothing. The line stays put.

There are also times when a bar makes both a higher-high and lower-low (remember that we are comparing each price bar against the previous bar to determine if it is a higher-high or lower-low). This bar is called an Outside Bar. To deal with these bars depends on the currently direction the line has been moving. If the line has been moving to each new higher-high, then you would again advance the line to the new high of this outside bar. On the other hand if the line has been moving down for each new lower-low, you would move the line down to the low of the new lower-low of this outside bar.

The thing to note about Outside bars is that, although you will be advancing your line up or down (depending on the current direction of your line drawing), you must count the opposite side of the Outside bar as a count of one in the opposite direction. Thus, if price then goes the opposite way and exceeds the opposite side of the outside bar, the count becomes two in the opposing direction and the line should then move from the outside (where it is currently sitting) to the bar that made the count of two.

For example, let’s say that we have been moving the line down to each new lower-low (thus the direction is currently down). Then an outside bar forms making both a lower-low (lower than where our line is currently sitting) and a higher-high (higher than previous bar). Since our direction leading up to this outside bar was down, we move our line down to the low of the outside bar (since it is in fact a lower-low). We also want to assign the higher-high of this outside bar with the count of one. Now if the next bar makes a higher-high than our outside bar, the count goes to two and the line moves from the low of the outside bar up to the new higher-high.

After you have done this with your price chart, you will see the peaks that represent the swing tops and bottoms. You will use these peaks to determine the current trend of the market.

For example, a bull trend is a pattern of higher swing bottoms. As long as the market forms each swing bottom peak higher than the last, the bull trend is in effect. On the other hand, the bear trend pattern is made up of lower swing tops and lower swing bottoms. So by nothing where these swing bottoms or tops are forming in relation to the previous one, you immediately can determine the current trend.

W. D. Gann has stated that when the high of a 2-bar swing top has been exceeded, it is an indication of higher prices. He also stated that when the low of a 2-bar swing bottom is taken out, it is an indication of lower prices.

Not only should the trader focus on trading in the direction of the trend, but those swings can also help in determining where to adjust stop-loss orders. For example, if you are long due to the trend being bullish, moving your stop-loss below each higher swing bottom would protect your position in the event a swing bottom low is taken out (as this is an indication of lower prices to come).

Of course these days it can be leaving a lot on the table to use these 2-bar swings for stop-loss orders. Consider this a beginning guideline. One option I may employ is to draw a trend-line under two or more swing bottoms (when long) or across two or more swing tops (when short) and use the slope of that trend-line as a guide for adjusting my stop-loss.

Learning how to identify swing tops and bottoms is a valuable tool for any trader that wants to get a good read on the market. It is mentioned in several lessons by W. D. Gann because it is really that important. In my work, everything revolves around the swings.

Are Renko Charts a Better Way to Trade Forex?

Renko charts hold their own forte when it comes to traders using these custom chart types. Although the more popular candlestick or bar charts are still widely preferred, traders who trade the markets with Renko bricks tend to be more comfortable trading this chart type than switching to other forms. A quick look at some of the popular trading forums and one can see the increasing number of traders coming up with new Renko trading strategies.

What exactly is a Renko chart you might be wondering?

Well, for starters it is not a holy grail chart that will show you things that others don’t see. Renko charts are merely a graphical way of displaying price on the charts, in the form of bricks.

If you haven’t come across a Renko chart before, the first time you look at these charts can be visually captivating. If you have been around in the markets for a while, you might actually find some similarity between Renko and Heikin Ashi charts, at least as far as trends are concerned. But that’s where the difference ends. Renko bricks are unique because the charts are built using price, unlike other charts including Heikin Ashi where time is a factor. This unique feature makes the Renko bricks purely showing price and thus in a way trends as well. What captivates most traders about Renko charts is the fact that due to the lack of noise in the price bricks, it is a lot easier to trade. We all know the popular usage of the trend being your friend.

Renko boxes are widely used, not just in the Forex markets but also in stocks and futures as well. For a technical analyst who prefers to trade with price action, there is nothing better than this. From chart patterns to support and resistance levels, you can quite see everything that price is doing.

It is perhaps due to this feature that Renko charts are often used by traders, who rather unfortunately expect to see their trading turn around. But that is not always the case. If you are trading without understanding the concepts of the market dynamics, then no chart, existing or future inventions will be able to help you make profits with trading.

But why use a Renko chart type where there are tons of other regular conventional and un-conventional charts to use from?

As mentioned, it is purely a question of preference. For the astute technical analysis, Renko charts can offer a lot more information compared to a Heikin Ashi or a candlestick chart. This chart type can also be beneficial if you are not worried about time but focused on what price is doing. And yes, due to the nature of these charts, there is some key market information that can be easily seen, but could be missed when using one of the many conventional chart types.

Reasons why you could use Renko charts

Here are some of the main benefits of using Renko charts.

Price indecision: In traditional chart types, price indecision usually refers to prices ranging back and forth. While this is also evident on Renko charts where you can see these ranging price patterns with consecutive bricks being plotted up and down and prices heading nowhere, there is an edge however.

The advantage is that these consolidation or indecision zones are easier to spot. And if you are good at your technical analysis, you can look at past price action and figure out why the market is behaving the way it is.

Pull backs in a trend: There are tons of articles that talk about how to trade pull backs but the truth is that in real-time it can be hard to trade unless you know and are confident in your trading approach. With Renko, the pull backs in the trend are a lot easier to spot and don’t require much of subjectivity.

More trading opportunities: Whether you want to scalp the markets or whether you are in for the longer term, Renko charts can show you different ways to trade. From taking profits for every 10 ticks to riding the trends, or even counter trend trading, the charts make it all the more easier. It all depends on how big your Renko brick size is.

In conclusion, if you are looking for an alternative way to trade the markets, not just in hopes of finding the next holy grail, then renko charts might be worth your time, as long as you have an open-mind and willing to explore the possibilities.

Advantage and Disadvantages of Discount Stock Brokers

The primary requirement for trading stocks, bonds, and other commodities is to have an account with a stock brokerage firm. You may save a little bit of money on fees and maintenance charges associated with your stock-brokerage account with one of the many discount stock-brokers available online. Discount stock-broker are an excellent option especially if you are an experienced investor who may not need to take advantage of all of the additional research tools options offered by full-service stock-brokers. Discount stock-brokers can be used to conduct your basic trades on a daily basis while saving you a lot of money.

It should be noted however that not every trader will be best served by the services of discount stock brokers. For the most part discount stock-brokers are the best choice for experienced traders who know how to conduct their own research and market analysis. If you are new to stock trading and are not familiar with all of the intricacies and complex strategies of stock market investing in you should probably stay with using full-service stockbrokers. For those of the trading for few years however, discount stock-brokers may be an excellent choice.

One of the major disadvantages to discount stock-brokers effective for the most part you have no help when you need it. Discount stockbrokers do not offer any type of live person-to-person advice, research, and more comprehensive analysis; in fact most of them offer flat-rate monthly packages and little or no maintenance costs associated with your brokerage account.

This is something that you will need to keep in mind when you are looking into discount stock-brokers. The advantages as well as disadvantages will need to be weighed. Discount stock-brokers have a different amount of experience than other certified financial experts. This lack of training and expertise can at times lead a person to get a stock broker at a discount rate. Several of the trading companies employee these discount-stock brokers in order to act as a middle man for the person wanting to commit the trade. The broker is acting simply on instructions that they are given as to what they are to do with a particular trade.

This is both a curse and a blessing in the fact that you save money while not getting any of the tools that a regular stock broker will give you. Discount-stock brokers are not always a bad thing, many people find that they serve a useful purpose in the fact that they can do the things that need to be done involving a trade without any of the other hassles. If you are new to the markets however, then the use of discount-stock brokers might not be good for you. The use of discount-stock brokers can be a very risky choice unless you are fully prepared to do all the extra work associated with the trade that is normally done by the brokers at a full-service stock brokerage firm.

eBay – Pierre Omidyar’s Success Story – Famous Entrepreneurs

“I never had it in mind that I would start a company one day and it would really be successful. I have just been motivated by working on interesting technology.”

Growing Up

Omidyar was born in Paris in 1967. He moved to Baltimore when his father began his term of residence at Johns Hopkins. Omidyar became captivated by computers while at high school and skipped his gym classes in order to use it. Noticing the boy’s keen interest, the principle gave him the job of creating a program that would produce catalog cards for the library. He was paid $6 an hour.

At Tufts University, Omidyar worked on a program to assist Macintosh programmers with computer memory problems. His request that users of this shareware file pay on the honour system did not bring many replies; the cheques that should have been going to fund his years as a computer science undergraduate went solely to paying for the post office box.

In 1991, Omidyar went to work with three friends to create pen-computing programs. Though Pen computing was a dismal failure, the e-commerce site (eShop) on the Web site that Omidyar introduced and operated enticed Microsoft to buy the company.

Starting The Business

Omidyar went to work with General Magic, a software company, in 1994 and made extra money designing Web pages on the side. The girl he was dating at the time, Pamela Wesley, who would later become his wife, collected Pez dispensers and often complained how difficult it was to meet others passionate about her hobby on the internet. Thoughtfully, Omidyar appended a small online auction to his personal website so Pamela would make contacts with other collectors as well as buy and sell.

eBay (electronic Bay, as in the San Francisco Bay area), as it was when it first appeared in 1995, operated merely as a forum for people to sell and bid on various items. Omidyar did not back goods, mediate conflicts, or get involved if there were accusations of dishonesty or abuse of the system. Almost immediately, collectors of Barbie dolls, Beanie babies and the like flocked to eBay.

Three months after its launch, Omidyar had to ask his friend Jeff Skoll, also a programmer, for help. In order to cover the new costs involved with the growth of the business, Omidyar began charging small change to list an item on the site and took a small commission if the item was bought.

Building An Empire

Omidyar was surpised by his continued success and had to hire someone to open the large number of cheques that were being sent in. He was also surprised that people were not simply using the site to buy and sell, but also as a meeting place where relationships were made over common interests.

After qutting his day job, Omidyar worked along with Skoll to improve eBay. They felt that if a sturdy framework was in place, business would generate by itself. After just under two years of operation, eBay was one of the most popular internet sites, 150 users bidding on 794,000 items daily. And the company was now doubling every three months.

At such a rate of growth, Omidyar and Skoll sought venture capital assistance and a management team that would further move the company forward. Benchmark Capital gave the partners a $4.5 million cheque for 22% of the company. Benchmark also found a CEO for eBay, Margaret Whitham, an executive from Hasbro, and with her leadership, the business became a slick corporate entity. With a new look, better publicity, and greater organization, eBay went public on September 24, 1998. Within four months of trading, the stock, which started at $18 per share, was worth $300. Omidyar became a billionaire.

Now selling far more than just Pez dispensers, eBay has completely changed e-commerce. Despite increasing competition, eBay continues to grow. Omidyar recognized and seized the opportunity that essentially fell into his lap and revolutionized internet use.