Archive for March 2012

How to Become a Supplier Or a Distributor!

A lot of people make a good earning by buying the product directly from the manufacturer and selling it to the retailer or direct market. Especially, in the internet, a lot of people run the same business without even setting up a warehouse to store the products from the manufacturer. They almost work like a broker.

This method is commonly called drop shipping. In this situation, the seller attracts prospective customers via different 'community online stores' or via their website and once the deal is closed, they ask the distributor to ship the product directly to the consumer. Thus you save a lot of money as you do not need to spend on storage, carrying or transportation, showroom and storefront employees. All you need is to promote the product online via advertisement or your website and channel the sale via you.

Cycle Trader

If you want to start an online business, this business model is fine as long as the target market is accustomed to buying these products online (all products do not have a good market online that you can rely on).

How to Become a Supplier Or a Distributor!

But what if you want to start the business in real world? A lot of manufacturers have the option so that you can contact prospective retailers and sell the product directly to them without having your warehouse in between. However, the profit margin is often less than what you could have earned by selling the product directly to the target market. However, the business volume always works for you.

Do you want to start a real business as a supplier or distributor with your own warehouse? Here is a step by step guide to start the business.

Ok, there are some legal issues that you must consider before you really invest into the business. You mainly need two documents - Tax ID and Vendor's License if you want to sell the products directly to the target market like a fair.

You can apply for the Tax ID at IRS (US Department of Treasury). This is important as most of the manufacturers also require Tax ID. Apart from that if you have a tax ID it would also help you in banking and you can keep your business income and personal income separate while filing for tax return. You can get the vendor's license from your state's official website.

Now, when you have got both the papers, you are ready to dive into the market. You can now directly contact the manufacturers to sell their product. A lot of manufacturers will be happy to offer you distributorship but some of them would definitely look for your previous experience. As you do not have any prior experience, you should start developing a network or retailers who would be interested in selling your product. Do not forget that your success depends on the network.

There are other places apart from the direct market where you can look for retailers. For example, there are different distributor's forums or directory of wholesale distributors and wholesale suppliers. You should participate there to get more buyers interested in your product. A lot of people also use telephone directories to find related distributors. You can enlist your business information there to get prospective clients.

How to Become a Supplier Or a Distributor!

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Motorcycle Troubleshooting

When troubleshooting a motorcycle, first start with the basics. These simple tests can work for any small engine. All engines need three basic things to run fuel, spark and air. These simple things can cause your motorbike to not start up or run poorly. First start off with the fuel remove the hose off the tank and make sure the fuel is flowing properly. Some bikes will have to turn the fuel selector to prime, not on, or fuel will not flow. Take a flashlight and look down into the tank, is the fuel varnished or is there dirt in the tank? Older motorbikes had a problem with tanks rusting inside and would plug the screen up inside the tank. Fuel delivery may still be a problem but we will come back to that later.

Next remove the spark plugs, you may need to remove the tank to reach them. Inspect every spark plug as you take them out. All the spark plugs should look the same. If a plug looks white colored, that cylinder may be (lean) and not getting enough fuel. If you have a plug that looks wet and black, that cylinder may getting too much fuel (rich) or not sparking good. Remove all the spark plugs and snap the plugs back into their wires. Set the spark plugs on the engine so that they can ground themselves. Crank the bike over and watch the plugs for sparks, preferably somewhere dark. Make sure you look at all the plugs to make sure they are all sparking. If one spark looks weak check the wire and plug, if old or worn replace them. If their is no spark the coil may be bad.

Motorcycle

If you have any test equipment such as an ohm meter, you can find out what the resistance reading should be for your bikes coils. This way you will know for sure if the coils are o.k. If the ignition system looks fine move on to the carburetors. First, if the bike has not been maintained recently (a problem in itself) make sure the carbs are synchronized. To do this you need a vacuum gauge made for this. Remove the small rubber plug located between the carbs and the cylinder. Attach the gauge and take the readings from each cylinder. Replace the caps when not measuring or it won't run right. Adjust the throttle screw or linkage for that carb until they all read close to one another.

Motorcycle Troubleshooting

Refer back to inspecting the spark plugs. If one cylinder looked lean or rich check all hoses for cracks and air leaks. If the motorcycle has not been run in awhile the carbs may be (gummed up). Remove the float bowl off the bottom of the carb. Look in the bowl for dark varnish looking gas. If the fuel looks dark you will probably have to remove the pilot and main jets and carefully run a wire through the center hole to clean them out. Be careful to not bend the float as the height needs to be correct to run well also. Check that the small needle attached to the float between the pivot point, is moving up and down. If it doesn't move smoothly the carb will not fill up with gas or will run low as your driving down the road.

Make sure you check the battery also, if they become weak the ignition system won't have enough power to keep the bike running smoothly. If you still haven't found anything make sure you valve lash has been checked at the correct mileage intervals. If not this can cause many problems with the way it runs. Also you can screw a compression gauge into the spark plug holes and check that they are within 5-10% of each other. If one is way down you have a serious problem either with the pistons, bore or valves. This should be a good start to finding a general problem with your motorbike.

Motorcycle Troubleshooting

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Role of Banks in International Trade

It is impossible to be in international trade without involving your bank for all the services they provide such as advice on financial issues and the potential risks involved. It is true that one critical hurdle for SMEs is the lack of information on international trade processes, documentation and banking procedures necessary to carry on with business abroad. For result oriented and cost effective international trade, you will very definitely need access to accurate and timely information and a sound knowledge of banking.

Payment Options in International Trade

Cycle Trader

Quite obviously all payments in an international trade are made through bank either by way of wire transfer or check with the latter not being preferred for not being the quickest. The following are some of the common ways of payment modes in international trade.

Role of Banks in International Trade

1. Banker's Draft is a cheaper option and easier to obtain but there is a risk of loss in transit. The only advantage it has against check is quicker credit that the exporter gets.

2. Letter of Credit. This international trade instrument is mutually convenient for both the parties. The exporter gets paid once he produces the copy of BoL (bill of lading) which he receives from the shipping company and the LoC, to the bank, regardless of whether the consignment as arrived at destination or not.

3. Wire transfer is by far the fastest and the cheapest option in which the importer will instruct his bank to transfer the amount to the exporter's bank account. The first time, the transfer happens in about 10-15 days depending on the destination country and the routing bank. International wire transfers are made through intermediary banks/correspondent banks.

4. Although not in a big way, some China manufacturers accept Paypal for smaller amounts such as US,000 but require 3% extra to compensate for the charges. Paypal is the quickest and easiest mode of payment in international trade.

Banks that are serving international trade, understand the crucial role they are required to play. Many large banks maintain worldwide correspondents to provide quick delivery of actual currency, wired money or drafts. You may choose your bank for international trade account on the basis of whether the bank can extend advances against the account receivables. Bank may, however, require your account secured through export credit insurance provided by Export Import Bank of United States. Banks also let you enter into forward exchange contract with your bank and fix the amount of the foreign exchange you receive when you are dealing in convertible currencies. You need your bank to be with you as long as you are in international trade.

Tootoo.com

Role of Banks in International Trade

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Incomplete Accounting Records

The accounting records of many smaller non-profit organisations such as clubs, cultural societies and small undertakings are often kept by means of a single entry accounting system. Nevertheless, details of the financial activities of such organisations and undertakings are available in different documents such as bank statements, invoices, accounts, wage sheets and minute books.

There are two major disadvantages to such incomplete (non-double entry basis) accounting records: (1) a great deal of useful information may be lost. It is possible to prepare financial accounting statements from the available information, but this may be more difficult than when complete records are available. Certain transactions may not be accounted for and there is also no continuity in the recording of financial and other useful information. (2) The advantages of the controls inherent in a double entry accounting system are lost.

Cycle Trader

A discussion of the treatment of incomplete records is useful for various reasons. First, it emphasises the advantage of a comprehensive double accounting system. Further, it is practical because accountants often have to prepare financial statements from such incomplete records, chiefly for income tax purposes. In practice, therefore, the conversion of single entry accounting information to a double entry basis is an analytical exercise. It may also happen that the double entry accounting records of an enterprise are lost (e.g. as a result of damage by fire) and the accountant must reconstruct them from incomplete records. Consequently, attention is given to certain aspects and practical procedures that arise as a result of keeping incomplete accounting records.

Incomplete Accounting Records

Assume that a trader has been in business for some time and that he wants to determine his interest in the undertaking at a specific date. In order to do this he must determine the total interest in the business and against this, bring into account any external interest. This can be done by, constructing an equity statement. (Basically, this contains the same information as the balance sheet, but is not prepared from balances of accounts in a double entry accounting system.)

The equity statement must be prepared by referring to any applicable information available. Keeping in mind that, undertakings that do not have formal accounting systems will find it necessary to keep records of certain basic information in order to conduct their business. For example, records of cash received and paid and amounts owing, both to and by the undertaking, are essential. Cash on hand can be determined by a cash count, cash in bank from the bank statement and amounts owing to and by the undertaking from invoices. Stock can be counted physically and the valued. The cost of fixed assets purchased can be determined from the supporting documentation. Owner's equity will be the difference between the values allocated to assets and liabilities.

The most practical method of determining net income or loss from incomplete accounting records is to analyse the change in owner's equity during any specific period. Obviously, owner's equity increases if a profit is made and when the owner makes additional investments in the undertaking. Conversely, owner's equity decreases as a result of losses and drawings by the owner.

Incomplete Accounting Records

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Motorcycle Racing

Motorcycle racing is one of the most popular racing games in the world. Motorcycle racing are divided into two categories. One is off road disciplines and another one is tarmac based road disciplines. In this discipline, there are many sub groups. In the hill climbing, a rider can go very fast to reach the line in given time. The hill climbs are much closer to the public and private roads. Super cross is located in stadiums in the variety of close and open areas, these are not used for the numerous jump. Flack Track is one of the American oldest motorcycle riding. Every year, the race computation is arranged in the United States.

Grand Prix motorcycle racing is also called as MotoGP. 125cc, 250cc, and the 500cc. All these are the three types of Grand Prix motorcycles as of the year 2002. The 125cc machine is a one cylinder and minimum weight of this machine is 80 kg. The 250cc machine has a double cylinder and minimum weight of the machine is 100 kg. Endurance racing is one of the main categories of motorcycle racing. In this teams, many riders attempt to the single event to cover the long distance. Endurance races can run the laps as quickly as possible in a cover of the set distance, or preset amount of time it cover the much of the distance as possible. The MotoGP premier class of motorcycle racing has been changed in the recent year. The year of 1970s to until 2002, the top class of GP race allowed 500cc with max 4 cylinders. Regarding the engine, it was a four stroke or a two stroke.

Motorcycle

The result of the year 2008-09 markets down, MotGP cut the costs by changing the effect. Practice session and testing session was reduced. The Rider travels to the FIM championship series. The championship held in Italy and Spain. More number of riders participates in this championship. The most number of riders are participating in the US. When rider crashes the marshal, they give a yellow card, the yellow flag passing the area of the track. Even if rider falls in the tracker, he cannot be evacuated safely from the track. Motorcycles have two types of crashes; the most dangerous is the high side and low side. A flag-to-flag rule for MotoGP was introduced in the year of 2005. If a race started and it rains, then the riders can take the red flag to stop the game.

Motorcycle Racing

The super bike world championship is also known as a premier worldwide championship. In the championship, there are two rounds of races. The results of each race are combined to determine two annual world championships, one for manufactures and another one is riders. Europe is a one of the Super bike world championship market center.

As always, never attempt to race without wearing a motorcycle helmets. This is your protection.

Motorcycle Racing

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How to Build Your First Custom Motorcycle

You have decided that you want to own a custom motorcycle, but you're not quite sure how or where to begin. There are a few things to think about before you start on your journey for that original, unique, or unusual motorcycle.

First, do you want to fully build a custom motorcycle from the frame up, do you want to modify an existing bike, or order one already built to your specifications? What size bike are you thinking about? Large, small or in the middle? Do you want agility & speed, or do you just want to look good while you cruise the highway?  You will need to decide how much money you can afford to spend in the long run & whether your ownership plan will most likely take you weeks, months or even years to complete.

Motorcycle

Second, can you spare the time to do the customization/modification on your bike yourself, or do you have the resources to have the work done for you. If you are going to do your own work, (as do most of us) you'll need to consider what tools you will need, where your work space will be located, how much help from like-minded friends you're likely to get, and your level and variety of skills.  Last but not least, do you have the motivation and dedication to continue once you have started creating your own custom bike?

How to Build Your First Custom Motorcycle

Third, how much work needs to be done on a bike to make it a custom motorcycle anyway?  This is a controversial argument.  Some say it is not a custom motorcycle, unless you change out basically everything on the bike and others say changing just a couple of things makes it custom. This is the logical answer; make it uniquely yours in any way you choose!  Build it, modify it, lighten it, strengthen it, downsize it, expand it, make it more agile, paint it, build it up, or strip it down, just make it yours!  If you have had it modified and it is no longer "stock", or you've modified it yourself, congratulations! You now own a custom motorcycle!

Fourth, get out there and ride!!

How to Build Your First Custom Motorcycle

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Police Motorcycle Auctions

Buying anything second hand can sometimes be a bit of a risk. For vehicles and autos this is even more so.
Let's face it. No matter how well you know the previous owner, there really is no way of telling how he/she handled their car or motorcycle before it was sold to you. There are really only two things you can do to minimise the risk:

1. Do a through inspection of the vehicle in question
2. Always buy from a reliable source

Motorcycle

Sticking to your guns on these principles will pretty much ensure that you don't buy any junk. If you're shopping around for your first (or next) motorcycle, a good place to be looking is at police motorcycle auctions.

Police Motorcycle Auctions

People that buy from these auctions can generally expect two types of motorcycles. They are bikes that have been confiscated or seized by the police as part of their crackdown on criminal activity, or motorcycles previously owned the police department.

Police motorcycles auctions are renowned for its quality stock for sale. Usually when a motorcycle is being taken out of service by the police force, it undergoes some work to take of the badges, stickers and sirens. When completed you have almost a brand new motorcycle, ready to take on the road. These motorcycles have also had a significant maintenance schedule whilst in service, so they're generally in a really good condition. Always a good buy!

On the other hand you venture into buying confiscated goods at police motorcycle auctions. It goes without saying that many of these may not have the service track record of police owned bikes, but there are usually some really good gems to be found.

Between all of these you are bound to find what you are looking for. Of course, remember to do a good inspection before you start bidding. The standard things to look for are the state of the seat, handlebars, tyres, lights, gauges and switches. Also check if the forks are not twisted in any way. As with any engine driven vehicle, you should generally 'steer well clear' if you find any suspicious leaks as this could potentially spell trouble.

Get these boxes ticked and attend as many police motorcycle auctions as you can and you will get that perfect new machine you've been hoping for.

Police Motorcycle Auctions

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Motorcycle Pinstriping - Make Your Motorcycle Stand Out

Motorcycle pinstriping is a great way to add a creative touch to your motorcycle. These pinstripe designs can be created to follow any theme and to make you bike look amazing. Pinstriping is a series of painted designs added to you motorcycle to make it unique. Pinstriping can be applied at a body shop or may be done at your own home.

Motorcycle pinstriping has been around for many years and has continued to gain popularity among motorcycle owners. Beginning in the 1950s, the popularity of vehicle pinstriping began to grow. Later individuals began to add these creative designs to their motorcycles as well. For those who enjoy showcasing, pinstriping your motorcycle is an important part of the appearance of the motorcycle which can help the bike stand out from the crowd.

Motorcycle

When choosing a pinstripe design for your motorcycle, it is important to think of what interests you. You may either purchase a template or stencil that has the design pre-made, or you may choose to design the pinstripe freehand. Each motorcycle pinstripe is distinct and unique designs can be seen on motorcycles around the world.

Motorcycle Pinstriping - Make Your Motorcycle Stand Out

The application process of the paint may be done by using a kit or at an auto body shop. Kits are available containing stencils that give you a consistent outline for the pinstripe design. These stencils are applied onto your motorcycle by using a pinstriping brush and paint. Motorcycle pinstriping is most commonly done at an auto shop where pinstripers apply the design using freehand to give a more professional look.

Another helpful method of pinstriping is the use of a pinstriping tool. By using this tool, motorcycle pinstriping can be applied more thoroughly as this tool is sure to paint the edges of the motorcycle. Also, you can easily paint a single straight line or a set of parallel lines. Whichever method is used, pinstriping should be carefully applied to add a custom touch to your cycle.

Motorcycle pinstriping comes with many great benefits. You, as the designer, are able to decide what type of pinstripe you would like and also get to choose the colors that will appear. Pinstriping your motorcycle is a great way to customize your bike and show your style through the intricate artwork. Although pinstriping can result in amazing results, you must be sure that the application of the design is carefully applied to ensure that the artwork is neat and organized. By taking an interest in motorcycle pinstriping you will soon begin to gain an appreciation for each individual design.

Motorcycle Pinstriping - Make Your Motorcycle Stand Out

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Motorcycle Kits - Build the Motorcycle of Your Dreams!

When considering building your dream bike from a motorcycle kit then it's important that your dream becomes a reality and soon, I mean how long are you really prepared to wait to take that road trip!  There are many questions that anyone seriously considering building their own motorcycle from a motorcycle kit always seem to ask and I wanted to share some of those with you.  That way it should make the decision much quicker and take that long list of excuses (sorry, I mean reasons!) why you haven't built your dream motorcycle yet.

What types of Motorcycle Kits are there?

Motorcycle

The sky really is the limit when it comes to the choices available in terms of Motorcycle Kits - you name it and you can probably find it.  You would be well placed to think about the overall look you want at the end of the build.  It's a good thing to focus on the shape and design of the chassis as that will drive the end result in terms of style, so find one that fits your style and personality.  Just like buying a house, do not let colors sway your decision, all that is part of your customization process so consider your chassis as the foundation, get that right and everything else will follow.

Motorcycle Kits - Build the Motorcycle of Your Dreams!

How easy is it to start building the Motorcycle from your Dreams?

If you come to this with little mechanical experience then it is best to consider this job one piece at a time or you could easily get overwhelmed by the size of the task ahead.  Open the box and take action, the biggest mistake people make is not getting started.  Once you open the box, read the instructions once, twice and maybe even a third time.  Once you have done that then start ... if you don't start how can you possibly expect to build the motorcycle you have been dreaming about all this time.   It might be worth asking a friend or family member to help you out with some aspects of the build process.  To be honest though, what you need is the motivation, the space, the time and a vision - after that everything else will work itself out.  Oh and lot's of patience, common sense and old fashioned elbow grease.

How long will it take me to build a Motorcycle using a Motorcycle Kit?

This depends very much on your level of experience and the time you have available.  With the right skills and experience you could build a motorcycle in a couple of weeks.  However, if you are holding down a full time job and this is a part time project for you then you can expect it to take much longer.  This could occupy your "so called" spare time for around 8-10 weeks under those circumstance.  Remember all good things come to those who wait. 

What tools will I need to "get the job done"?

Most of the instruction manuals suggest a basic tool kit is all that is needed.  It's probably best to discuss exactly what you may need with your supplier though.  There is one basic tool you will need and that is the space to carry out the build.  It sounds obvious I know, but if your garage is full to the brim with "stuff" that had no place in your house or you have a car in your garage, then you will not have the room needed.  You have to be able to access the bike from all sides during the build process, so do yourself a favor and clear out the garage (like you've been meaning to for 6 months now) or borrow space from someone.  Don't make the job more difficult than you need to.  Regarding specific equipment that you may not have then the only suggestion here would be to consider a special lift.  In terms of the cost of a special lift versus the investment in the motorcycle of your dreams then it is arguably a small price to pay.

What about repairs & maintenance?

Given that you will have built this bike from scratch then any repairs and maintenance should be easy, remember you have the experience now, you know what it took to build your bike so repairs, replacement of parts and routine maintenance should be a piece of cake!  How cool will it be knowing that you will not have to take your motorcycle to an expensive repair shop.

Do I have what it takes to create my dream from a Motorcycle Kit?

Only you will truly know the answer to this question and you will need to look deep inside yourself and ask whether you have the dedication, time and skills to deliver your dream.  The time will be whatever you have available to you, what is less easy is whether you have the dedication.  Some would say that it takes more dedication to take on a project like this part time as the overall duration is much longer.  However, to build a bike in a very short period of time takes a different sort of dedication - the no excuses, no limit approach - just do whatever it takes to build the motorcycle in the shortest period of time available.  In terms of skills then do you have the personality to deal with frustrations, problems and delays along the build process.  Even the most experienced motorcycle kit builders find themselves in difficult situations.  If you expect your first build to go smoothly with no hitches along the way then perhaps this isn't the project for you.  If you are up for a challenge and believe you will complete the project, come what may, then this is probably the right time for you.

Wouldn't  it be easier to go buy an "off the shelf" Motorcycle?

In many minds  "off the shelf" motorcycles just don't cut it, who wants to be seen driving the same motorcycle as someone else, after all?  With a motorcycle kit you can create something truly unique, a motorcycle that matches your personality and means you will always stand out from the crowd.

Enjoy riding that Dream Machine of yours!

Motorcycle Kits - Build the Motorcycle of Your Dreams!

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Motorcycle Online

Online distance learning schools have become the fastest growing means of gaining an education for adults today. Online programs in Motorcycle maintenance and repair offer the convenience of home study as a quick and easy way to learn more about Motorcycle technology and repair.

Online distance learning courses can provide a better understanding of how Motorcycles work with self-paced home study. Online distance learning is a way that you can further your interest in Motorcycle repair and maintenance without setting foot outside the comfort of your own home.

Motorcycle

Online distance learning allows you to get Motorcycle training on your own time, in your own home, and at your own pace. You will find Online Motorcycle training an easy approach to all phases of getting insight, education, and possibly certification in Motorcycle technology. You can enroll, keep records, get study guides, lessons, support from your instructors, and even take examinations Online. Some Online Schools will provide venues for Online discussion with other students that enhance your Motorcylce learning experience.

Motorcycle Online

Courses may be completed in as little as six months, and school starts when you are ready. Find your Online Motorcycle training options at http://www.schoolsgalore.com.

Copyright 2006 - All Rights Reserved
Michael Bustamante, in association with Media Positive Communications, Inc. for SchoolsGalore.com

Motorcycle Online

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Motorcycle History - Fun Facts For Kids

Kids, the first motorcycle sold was a Hildebrand and Wolfmuller. This was in 1894 when many kids rode bicycles...

Engines and Frames

Motorcycle

Bicycle companies put a new invention, the internal combustion engine, onto their bicycles.

Motorcycle History - Fun Facts For Kids

When new engines became more powerful the standard bicycle frames, wheels and chains could not handle them.

Bicycle builders decided to make frames made of steel. The steel frames did the job much as they do today.

Most Popular Motobikes

Before First World War, the largest motorcycle company in the world was Indian Motors. They produced 20,000 motorbikes a year.

By 1920, Harley-Davidson sold more street bikes in more than 67 countries.

Today, Honda, Kawasaki, Suzuki, and Yamaha are the most popular with enthusiasts. Harley-Davidson is still a driving force in the United States.

BMW, KTM, Triumph, Aprilia, Moto Guzzi and Ducati are also popular new street rides to buy...

Parts

Coloring pages kids, a steel or aluminum frame holds modern motorcycle parts and accessories.

Telescopic forks hold the front wheel, and disc brakes. Expect a one-cylinder to six-cylinder gasoline powered engine.

The engine is coupled to a manual, five- or six-speed sequential transmission with a swing arm-mounted rear wheel by a chain, drive shaft or belt.

A wind tunnel helps the engineers mimic real-life riding conditions. Different racing speeds test seating and body positions.

Experts can judge the best riding positions for racing bikes, off-road motorbikes and street cycles...

Accessories and Gear

Designed for comfort are various modern motorcycle attachments:

A "Fairing" is a plastic or fiberglass shell. It fits over the front frame of the bike. A fairing helps move the cycle smoothly and protects the engine in an accident. Fairings on touring rides improve your comfort and alertness on long rides. They reduce the harsh wind, cold and rain on your body...

"Windshields or windscreens" are built into a fairing or be attached to an unfaired motorbike. They are of transparent high-impact plastic. They direct airflow over or around your head. If you would like to raise and lower the windscreen with the push of a button, get an electric windscreen.

"Saddlebags or Panniers" rest on either side of the rear wheel to carry parts, tools, and, or travel gear.

"Heated Hand grips and Heated Seats" keep you warm in the cold and during night rides.

"Luggage Racks" remove the need for backpacks. They are a more secure and safe way to add carrying capacity to your rocket cycle...

A "Sidecar" is a one-wheeled partially covered seat. The sidecar attaches to the side of your motorcycle. Your big sister can sit in it and ride with you. Just remember to bring her back.

A "Trunk" is a storage box. Above and behind the seat the trunk is mounted...

Motorcycle Clubs

Clubs and organizations are popular. You can meet new rider kids, their buddies and their families.

The clubs are organized according countries, states, cities and neighborhoods. Individual motor bike makes or motorbike models have fan clubs.

You can join, if you qualify, groups like the American Motorcyclist Association, Harley Owners Group, Moto Guzzi National Owners Club, and Gold Wing Road Riders...

We will wrap it up...

Motorcycle kids - boys, you did a good job. You learned about Motorcycle: Inventions Clubs Accessories and Gear Parts Popular Motorcycles Engines and Frames

You can now give good answers to questions about the history of motorcycles. The End.

____________________________

Permission is granted to reprint this article "Motorcycle History - Fun Facts For Kids".

Get more free articles for kids, free motorcycle coloring pages. Use the articles for your website, class, home school, club, church or library.

Keep the ColoringKidsBoys.com links and credits intact. No permission is granted to edit, alter or sell the articles.

Motorcycle History - Fun Facts For Kids

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Difference between a Sole Trader and a Limited Company

"Business opportunities are like buses, there's always another one coming."
- Richard Branson, founder of Virgin Enterprises

If business opportunities are like bus, then be sure that there will be many who will want to board the buses. They will also face the eternal question 'What next'? The next step is to choose the type of business. The choices are many and the decision, well, as usual, always difficult to make.
Before opting for any type of business, it will augur well, if you understand the difference between each of the options.

Cycle Trader

Sole trader:

Difference between a Sole Trader and a Limited Company

Sole trader is a person who carries out the trade/ business single handedly. He is the whole and soul of the business. Usually, there is no one to assist him; though in some cases he might keep an assistant or a helper.

The following are the distinguishing features of a sole trader:

1) He is responsible for the entire business. He is responsible for all the affairs pertaining to the business.

2) The law does not make any distinction between the owner and his business. In the eyes of the law, both the owner and his business are the same.

3) Since the law does not distinguish between the owner and his business, his liability is unlimited. For e.g. if the business goes bankrupt, the owner will have to cough money from his own assets and financial reserves to pay to the creditors and lenders.

4) The sole trader is also liable to pay for any legal compensation that might arise in the course of running the business. He cannot shrug his responsibilities. He will not be able to defend himself by saying that the act was committed by his business and not by him.

5) The sole trader has the final say as far as decision-making is concerned. He is not legally bound to listen to anyone. He may do whatever he deems to be fit.

6) Since he has the freedom to take all the decisions, he is also responsible for them. For e.g., There is a bread manufacturer, [who is also a sole trader], who introduces a new variety of bread, thinking that there is demand for this particular variety. If the product succeeds, he can take the credit. If the product fails and as a consequence he suffers losses, then he will be held for the losses. The buck starts as well as stops with him.

7) He keeps the entire profit earned by him. Similarly he also has to shoulder the entire burden of loss.

8) A sole trader has to maintain financial records that distinguish between money used for personal and business purpose. For e.g. if he sends a letter to his wife, the postal expenditure will be treated as personal. But if a letter is sent to a prospective customer, it will be treated as expenditure incurred for business purpose.

9) A sole entity might come to an end if the owner becomes bankrupt or has an untimely demise, with no one to look after the business.

Limited company:

A limited company is a separate entity and is also either registered or incorporated under the laws of the country in which it is situated. It is a separate person in the eyes of the law.

The following are the distinguishing features of a limited company:

1) Since a limited company is a separate person, it can hire 'employees'. These employees are responsible for running of the company. These employees can be the directors of the company, the secretary as well as the staff including the receptionist!

2) For setting up a limited company, most of the countries require registration. Some countries also specify the minimum number of people that are required to start a limited company.

3) The laws of almost all the countries specify the use of the word 'limited ' or 'ltd' after the name of the company.

4) The finance for starting a limited company is raised by issuing shares. The people to whom the shares are issued are termed as shareholders. The shares cannot be issued to the general public unless it is a public limited company.

5) The liability of the shareholders is limited to the amount paid by them during the purchase of the shares. For e.g. if the company goes into debts, they are not liable to pay to the lenders and creditors from their own personal finance.

6) Similarly even the directors and other staffs are not responsible to pay. This is because the company is a separate entity.

7) The directors are responsible for the health of the company as well as its day-to-day affairs.

8) But if the company is held for any wrongdoing, the case will be filed against the company and not the directors. However, the directors are responsible for the way the company is run. If evidence of wrong- doings is found against the directors, cases can be field against them in the court of law.

9) The directors, in consultation with the shareholders, take the decisions pertaining to the company. Meetings such as AGMs [Annual General Meeting] are held to discuss about future strategies and growth plans.

10) The profits earned by the company can be distributed among shareholders as dividend. Alternatively, it can be also used for the expansion plans of the company.

11) No single person owns the company. It has a perpetual existence, which is not affected by the death of any shareholder or director.

Though there are many distinguishing factors the main difference between a sole trader and a limited company is that the law makes no distinction between a sole trader and his business, whereas a limited company is a separate entity in itself which can function very much like humans i.e. it can hire people, sue and get sued etc.

Difference between a Sole Trader and a Limited Company

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How To Build A Motorcycle Trailer

If you have the need for a motorcycle trailer, but don't want to spend a fortune on one, then you should consider building one yourself. It might seem a little daunting at first, but making your own motorcycle trailer really is easy and it's very rewarding as well. It can be done quite affordably and, depending on the method you choose, it can be done in just a few weeks. Read on to learn how to build a motorcycle trailer.

Your first option in how to build a motorcycle trailer is to buy a freight trailer and add on the other parts yourself. This option is the easiest and you can purchase these types of trailers for a lot less than full motorcycle trailers. They are available in a wide range of sizes as well. Often these trailers are just a couple of hundred dollars for a small or medium-sized one. You'll have to spend a little more if you want a larger trailer, of course. These trailers will have to be assembled upon arrival, but by following the instructions you should be able to have it done in less than one week.

Motorcycle

The second step in how to build a motorcycle trailer is to add the enclosed part. Once you have purchased your freight trailer, you have a few options for adding on the rest. One option is to buy a car top carrier. These are affordable and add about a car trunk-sized amount of space. If you choose to buy a smaller trailer, you can simply add a cooler and a few other things tied down, such as a tent or bicycle. You should use sturdy chains to attach these items and test out the stability at slower speeds before trying to go long distances.

How To Build A Motorcycle Trailer

Another option in how to build a motorcycle trailer is to build a trailer completely from scratch. If you are mechanically inclined and have a wide variety of tools, you should be able to pull it off and you'll save quite a bit of money. The first step is to build the frame and wheels. Many of the parts needed for this can be purchased used or cheaply online or from mechanic shops. Then you will need to build the carrier. This can be done in a variety of ways. You might choose to build it out of wood or use a carrier that is already built, such as the car top carrier recommended in the previous paragraphs. Other pre-made boxes are available at home improvement stores.

How To Build A Motorcycle Trailer

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Motorcycle Dangers

Motorcycles are becoming increasingly popular in the United States. Over 1 million motorcycles are purchased each year. As enjoyable as they are, they can also be incredibly dangerous. The nature of the motorcycle, with its relative lack of protection for the rider, makes riding one a dangerous proposition. Because of the high speeds and lack of protection involved, many of the accidents involving motorcycles often result in rather serious injuries. Motorcycle riders are 34 times more likely to die in an accident than a person in a passenger vehicle.

Motorcycles are harder to see than passenger vehicles. This is true for a variety of reasons, such as the fact that motorcycles only have one headlight, are significantly smaller than a car or truck, and there are fewer lights on a motorcycle to warn other vehicles of their presence. A motorcycle can more easily fit into the blind spots of another car or truck. Because they only have two wheels, they also have less traction on wet or slippery roads. Unfortunately, some riders do not follow regulations and recommendations at all times. There are many motorcyclists who do not always wear a helmet, which greatly increases their risk of serious injury.

Motorcycle

Even though motorcycles are more difficult to see than passenger vehicles, it is not the motorcycle riders' responsibility to make the vehicle more visible. After following the necessary regulations about functioning headlights and tail lights, etc. the rider is not responsible for augmenting his or her visibility. It is the duty of the drivers of other vehicles to be aware of motorcycles. Because motorcycles are smaller and have fewer lights, other drivers need to be more cautious and thorough than usual when looking for other vehicles to ensure being aware of a motorcycle.

Motorcycle Dangers

Just like any other motor vehicle, if a motorcyclist is injured because of the failure of a part on the bike, they may be entitled to a claim against the manufacturer. If the brakes fail, just like on a car or truck, the rider may have a case against the motorcycle maker.

It is the responsibility of other drivers to make themselves aware of all vehicles on the road. This includes motorcycles, even though they are sometimes harder to see than larger cars and trucks.

For more information on motorcycle accidents, visit Habush, Habush, & Rottier at www.habush.com.  

Motorcycle Dangers

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Motorcycle Intercoms - How to Choose the Best Motorcycle Intercom For You

Without a motorcycle intercom, motorcycle riding is a solitary experience. When you're riding alone it's a good way to clear your head or get your thoughts together. But if you've got a passenger, or you're riding with another biker, inevitably you'll want to talk to them. Motorcycle intercom systems that mount in your helmet let you do that.

The problem is that there are so many to choose from in such a wide price range. It's hard to decide which one to choose. And given that motorcycle intercoms have to work in an extremely difficult environment, choosing the right one can make the difference between enjoying your new purchase or hating it. This motorcycle intercom review will hopefully make your decision easier.

Motorcycle

Let's start with a broad overview of the types of motorcycle intercoms available.

Motorcycle Intercoms - How to Choose the Best Motorcycle Intercom For You

Acoustic Motorcycle Intercom

The most basic form of motorcycle intercom is the acoustic intercom. By acoustic I mean that it doesn't use electronics at all. It just uses hollow tubes that your voice travels through. They're like the old ships where the captain yells down a tube to the engine room to tell them to "give it more steam."

These systems have rubber-tipped tubes that insert in your ear the same way an earplug would. There is also a mouthpiece tube for you to talk into and all the tubes connect into a junction box.

One of the positives is that there are no batteries or electronics to mess with. That makes them very dependable. However, there is no amplification which means there is no way to adjust the volume or filter out wind noise. So at higher speeds, it will be more difficult to hear. Another problem is that some people find the "earplugs" uncomfortable in their ears for long periods.

Obviously these acoustic intercoms only work for rider-to-passenger and not bike-to-bike.

Wired Motorcycle Intercom

The next step up is wired intercoms. These systems have wires that run from the rider and passenger into a central control box that houses the electronics and battery.

Just like the acoustic intercom, with a wired system you don't have to worry about any external interference like you do with wireless technologies, unless you add a radio handheld communicator for bike-to-bike talking to your system. Some wired units let you plug in an FRS/GMRS radio, which is described in the wireless technology section below. The radio requires voice activation for it to work.

One of the issues some people have is that the wiring can be a little bit of a pain. Every time you and a passenger get on and off the bike you have to remember to unplug the units. Depending on how you have it set up, this could be two or three plugs.

Wireless Intercom Technology

There are four types of radio technologies used in the U.S. for motorcycle intercoms. They are GMRS, FRS, FM, and Bluetooth. There are also wired intercoms that enable you to plug into a handheld Citizens Band (CB) radio that has voice activation.

Frequency Modulation (FM) radio is similar to the FM radio you listen to, but for motorcycle intercoms a narrower frequency is used. Like FM radio, these systems can produce clear sound, as long as the distance between them isn't too great. FM radio works best when there are no obstructions such as hills between the transmitter and receiver. If long range is the most important feature, then GMRS intercoms will provide better performance.

The Family Radio Service (FRS) and the General Mobile Radio Service (GMRS) are the modern equivalents to the old walkie talkies you may have had when you were a kid. FRS radios typically have a maximum range of two miles with few obstructions in between, while GRMS radios communicate up to several miles. Like FM, these are public frequencies so other people can hear your conversations and vice versa. In some heavily populated areas these FRS/GRMS radios are heavily used, while out on the open road you should have fairly private conversations.

One nice thing with the FRS and GMRS radios is that you can go to your local discount store and purchase a cheap handheld radio that will communicate with these units. If someone were following you in a car, or they had a wired motorcycle intercom system that lets them plug in an FRS/GMRS handheld radio, they can communicate with you. The downside of this was just mentioned in that there are millions of these radios out there so in heavily populated areas you'll pick up lots of other transmissions. Also GMRS radios require an FCC license for legal use.

Bluetooth is the latest technology to hit motorcycle intercoms. Not only can these systems communicate totally wirelessly from rider to passenger, they can be used to communicate from bike to bike. Although with these systems the range is not in miles, it is in hundreds of feet. Since you are likely riding close to your buddies, this is not usually a problem. Although, range can be as much as 800 to 1600 feet.

The Bluetooth range limitation actually works as an advantage since it limits the amount of outside interference you'll get. Also, since you must program two units to work together, you won't pick up conversations from other people with Bluetooth devices...and they won't be able to hear you. You won't have to worry about your conversations listened to by anyone else.

If you want Bluetooth wireless communication there is one thing to watch for. Some units that say they are Bluetooth use FRS or GMRS to communicate bike-to-bike and the Bluetooth is just used to communicate with a Bluetooth enabled cell phone or other device.

Bluetooth intercoms also usually have some other features you won't find on other types of intercoms such as:
Integrate with Bluetooth enabled cell phones and automatically answer calls totally hands free. Enjoy your favorite stereo music from your A2DP enabled cell phone or MP3 player Listen to the audio navigation message from your Bluetooth enabled GPS.

Some Bluetooth intercoms only have one ear speaker while others have two.

Motorcycle Helmet Intercom Features

Here are features to look for as you are shopping for an intercom to use with your motorcycle helmet:
If you may be riding in the rain, get a system that says it's waterproof and not just water resistant. Some riders will put a water resistant system in a plastic baggie and that works for them. You can get systems that have a headset speaker for one ear or both ears. Installation and moving the intercom to another helmet is easier for systems with only one ear, but some people want to hear sound in both ears. Most systems have voice activation of some kind to keep the headset quiet when no talking is occurring. This voice activation often has the ability to be disabled and a push-to-talk switch used instead. Many intercoms have noise reduction capabilities with digital signal processing to help reduce the noise they pick up from the microphone. The faster you drive, or the windier it is, the more important this feature is. If you want music, look for a system that has a built-in FM stereo radio tuner or an auxiliary stereo input for a Walkman, MP3, iPod, or satellite radio unit. You can also use this input to receive driving directions from a voice prompted GPS unit. Some systems mount on your helmet, while others have capability to mount on your belt clip or bike. If the system is big and bulky, you may want the ability to mount it on your bike. You can integrate some intercoms with cell phones so you can talk while you ride. They require special cables or you can get motorcycle intercoms that have Bluetooth capability so they connect to your Bluetooth-enabled phone wirelessly.

Once you find the right motorcycle intercom for you, it will really make your ride with other people much more enjoyable. You'll wonder how you got along without it. You typically get what you pay for when you buy motorcycle intercoms, but even a bad motorcycle intercom is better than none at all.

Motorcycle Intercoms - How to Choose the Best Motorcycle Intercom For You

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Motorcycle Auction-Looking For Sweet Deals On Repossessed Motorcycles

Repossessed motorcycle auction have a couple of benefits for both the consumer and the seller. First, through the auction you will be certain that the price at that given time is the highest for that particular motorcycle. So as a seller you're guaranteed, in a way, of the best profit for your sale.

Meanwhile, for the consumers the auction is a great place to acquire cheap motorcycles that are in great shape and if you're really lucky, you will even get a repossessed motorcycle that's close to being brand new. A brand new motorcycle will cost you quite a fortune. That's why the best option for you is get a used bike in a repossessed motorcycle auction.

Motorcycle

There are a lot of public auctions out there where you could get your bike at dirt cheap prices. But the best deals are actually found in government seized auctions. A repossessed motorcycle auction features motorcycles, dirt bikes and atv's that were seized by the government from owners involved in unlawful activities. You can find these kinds of auctions happening in all parts of the country.

Motorcycle Auction-Looking For Sweet Deals On Repossessed Motorcycles

It is held yearly, monthly or even weekly depending on the place. So you need to keep an eye out for these kinds of auctions if you really want to have a bike that is cheap. Now, the main reason why repossessed motorcycle auction offers cheap motorcycles is that the government agency got the bikes for free and they will really want to get rid of them for whatever price possible since it is quite expensive to store the vehicles and their departments would appreciate the additional cash for their budget.

There are some things that you need to remember when buying from a repossessed motorcycle auction. Just like when buying cars from auction events, you need to inspect carefully the motorcycles that are up for bid.

Come early on the auction date so you have enough time to inspect the items thoroughly. Plus, by going early you avoid the rush of people and will not be pressured or bothered when you conduct your own inspections.

Also, before you go to a repossessed motorcycle auction you need to have at least an idea of the price range of the items that are up for bid. This means you need to be familiar with the kinds of motorcycles and their current market value. Market value includes if the motorcycle is brand new and the retail value if it has been used or reconditioned.

Remember too that you need to set for yourself the highest price you will bid for the bike and once you've decided you better stick with it regardless of how much you liked the motorcycle. If you don't, you will be engaged in a bidding war that will end up with you paying more than what the bike was worth in the first place. Don't get caught with the pace. Go there with your own style and your own pace.

Don't settle for a single repossessed motorcycle auction, there are a lot of auctions out there especially online. So before you go on a scheduled auction, visit a couple of online auctions first to get an idea on how the prices of the motorcycles fare.

You never now, you might find a product that is cheaper especially in an unpopular auction due to the less number of bidders. Preparation is always the key when you opt to buy your motorcycle in a repossessed motorcycle auction event.

Motorcycle Auction-Looking For Sweet Deals On Repossessed Motorcycles

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Characteristics of Depreciation, Basic Factors of Determination of Depreciation

Characteristics of Depreciation

Depreciation has the following characteristics:

Cycle Trader

(1) Depreciation is charged in case of fixed assets only, e.g., Building, Plant and Machinery, Furniture 'etc. There is no question of depreciation in case of current assets-such as Stock, Debtors, Bills Receivable etc.

Characteristics of Depreciation, Basic Factors of Determination of Depreciation

(2) Depreciation causes perpetual, gradual and continuous fall in the value of asset

(3) Depreciation occurs till the last day of the estimated working life of asset

(4) Depreciation occurs on account of use of asset In certain cases, however, depreciation may occur even if the assets are not used, e.g., Leasehold Property, Patent right, Copyright etc.

(5) Depreciation is a charge against revenue of an accounting period.

(6) Depreciation does not depend on fluctuations in market value of asset

(7) The amount of depreciation of an accounting year cannot be determined precisely-it has to be estimated. In certain cases, however, it may be ascertained exactly, e.g., Leasehold Property, Patent Right, Copyright etc.

(8) Total depreciation of an asset cannot exceed its depreciable value (cost less scrap value).

Basic factors of determination of depreciation

(1) original cost of fixed asset i.e., purchase price plus freight and installation expenses;

(2) estimated amount of expenditure on repairs during the useful life;

(3) estimated useful life of asset after which it will be discarded;

(4) estimated residual or scrap value;

(5) interest on investment-the amount invested on purchase of asset, if it had been invested in some other investment what interest would have been earned;

(6) possibility of obsolescence.

Fixed Installment or Original Cost or Straight Line Method, reducing/Diminishing Balance method

Under this method depreciation is not calculated on cost of asset. It is computed on the book value. of asset. The book value of the asset is obtained by deducting depreciation from its cost. The book value of asset gradually reduces on account of depreciation charge. Since the depreciation percent rate is applied on reducing balance of asset. this method is called reducing balance or diminishing installment method or written down value method.

Merits and demerits.

Declining balance method not only equitably matches depreciation expenses against the related revenue but also fairly spreads. the incidence of depreciation and repairs (viz higher depreciation but heavier repairs in later years.) on profit and loss account over the assets life span. Elimination of major portion of cost in early years also minimizes the impact of obsolescence. It is equally useful to management as accelerated depreciation means smaller taxable profits and taxes hence lesser outflow of cash.

Accelerated Depreciation Methods

Sum-of-the year's digits (SYD). This method of depreciation accelerates depreciation expenses so that the amount recognized in the earlier periods of an asset's useful life are greater than those recognized in the latter periods. The SYD is found by estimating an asset's useful life in years, then assigning consecutive numbers to each year, and totaling these numbers. For n years,
SYD = 1 + 2 + 3 + 4 + ... +n

Annuity Method

The method recognizes the time value (Interest) of money and hence regards the real cost of using a long-lived asset equivalent to the actual amount invested thereon plus the interest lost on the acquisition of asset. Under this method, so much depreciation is written off each year as after debiting the asset account with interest upon the diminishing value, will reduce the asset to nil at the end of its life. Thus, the amount written off as depreciation is the same every year, but the interest will diminish each year.

The amount of annual depreciation to be written off by Annuity method will be ascertained from Annuity Tables

Depreciation Fund method or Sinking Fund method

Under this method, a fixed amount is charged as depreciation every year. It endeavors to provide the required lump sum cash at the retirement of a long, lived asset by annually setting aside and investing a fixed sum in readily realizable securities. These securities earn interest at fixed rate and the same being reinvested along with successive fixed installments of depreciation, allowed to accumulate at compound interest. The sinking fund method thus takes into account of this probable income from interest while fixing the annual depreciation and investing the same which together with compound interest accumulated to the asset's depreciable cost by the end of its useful life. Obviously, the fixed installment of annual depreciation is here smaller as compared to straight line method. Its magnitude, however, rests on the asset's life span and interest rate. Longer the span and higher the rate, smaller is the annual depreciation per rupee of depreciable cost.

Shortcomings of Depreciation Fund Method

Depreciation fund method assumes constant rate of return on every periodic investment in identical securities. This is hardly true in this dynamic world where rates do vary now and then. Any variation in the rate of return upsets the earlier periodic allocation for depreciation and entails refection thereof. Further the amount realized on the sale of security rarely agrees with its acquisition cost owing to made fluctuations which may be both erratic and considerable. Those may cause a wide gap between the required and supplied cash.

Insurance Policy Method

This method endeavors the supply of required cash at the retirement of a specified asset in return of periodic contribution (premium). Under this a trader takes a 'Capital Redemption Insurance Policy' from an insurance company which undertakes to pay at a given date a certain sum if the trader, paying a fixed number of premiums after regular intervals. The trader treats the periodic payment as depreciation and charges it to profit and loss account. In this case, depreciation is charged at the end of the year, whereas, the premium is paid at the beginning of the year. At maturity, the insurance company pays the policy money which is normally sufficient to replace the retired set. Normally, amount received is more than total premium paid as the policy yields interest.

Revaluation Method

Under the system, each year the asset is valued and the value is compared with that in the beginning of the year. The fall is treated as depreciation. Suppose if the value of the tools at the beginning of the year was Rs. 8,000, during the year tools worth Rs. 6,000 were purchased and at the end of the year, on valuation these amounted to Rs. 11,000. The amount of depreciation for the year will be : 8,000 + 6,000-11,000 = Rs. 3,000 . This method is useful for charging depreciation on livestock and loose tools.

Depletion Method

Natural resources include physical assets like mineral deposits, oil and gas resources and timber stands. These natural resources get exhausted by exploitation. In some cases, the reduction in physical deposits is offset by growth or development of additional deposits.

The cost of natural resources is the price paid for its acquisition plus price paid for development of such asset in order to bring it to a state suitable for production.

The periodic depletion is better not calculated in terms of year. Rather it is better to calculate the cost per unit and then multiply the cost of unit to units produced in that particular year.

Machine Hour Rate

Under this method, the total number of working hours of a machine during the whole of its effective life is estimated, and then the cost of machine is divided by the expected number of hours of useful life, this gives the rate per hour. The annual depreciation is calculatedly multiplying this rate by the number of hours, the machine actually runs in a year.

Mileage Method

This method is used only for those assets whose useful life depends upon the fact that how many kilometers they have been driven e.g. buses, cars, trucks and rolling stock etc.

Global Method

Under this method, the value of the assets, irrespective of their nature is added together and depreciation is charged at an average rate on aggregated value.

Choice of a Method

Aforesaid methods of depreciation reveal that none is absolutely best or worst as each method has its own merits and demerits. Suitability of every method is relative and depends upon various factors. Most important of these are the type of the asset and purpose of depreciation.
Straight line method suits to buildings and lease etc.. reducing installment method fits to machinery equipment etc. and depletion method for wasting assets like mines. quarries etc. However, the underlying purpose is the basic determinants of the propriety of a depreciation method. Important purpose comprise of true reporting of accounts, tax benefits, comparative product cost, financial flexibility, replacement and expansion etc. For example. depreciation fund method envisages that the amount set aside for depreciation is to be invested outside the business in specific securities. Similarly under insurance policy method, the amount so set aside is handed over to insurance company. If a business is having working capital problems the advisability of these methods is questionable.

Of the above-mentioned methods (1) Fixed Installment and (2) Reducing Installment methods are most widely used.

Distinction between Fixed Installment Method and Reducing Installment Method

Fixed Installment Method

1. The rate and amount of depreciation remain the same each year.

2. Depreciation rate per cent is calculated on cost of asset each year.

3. At the end of its life the value of asset is reduced to zero or scrap value.

4. The older the asset, the larger the cost of its repairs. But the amount of depreciation remains the same each year. Hence, the total of depreciation and repairs increases every year. This reduces annual profit gradually.

5. Computation of depreciation comparatively easy and simple.

Reducing Installment Method

1. The rate remains the same, but the amount of depreciation diminishes gradually.

2. Depreciation rate percent is calculated on book value of asset.

3. The value of asset is never reduced to zero at the end of its life.

4. The amount of depreciation decreases gradually, while the cost of repairs increases.
So the total of depreciation and repairs remains more or less the same each "year. Hence, it causes little or no change in annual profit/loss.

5. Depreciation can be computed without any difficulty, but it is not so easy and simple.

Characteristics of Depreciation, Basic Factors of Determination of Depreciation

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Adjustments of Final Accounts

To ensure that the final accounts disclose the true trading results, it is necessary to lake into account the whole of the expenses incurred, whether paid or not, and whole of the losses sustained. Likewise the incomes and gains earned, whether actually received or not, during the period covered by the trading and profit and loss account under consideration must also be recorded.

In mercantile system of accounting, it is essential to adjust different accounts before the preparation of final accounts. It is quite common to adjust expenses paid in advance, incomes received in advance, income accrued but not received, bad debts, provision for bad debts depreciation on assets and soon. Journal entries are passed to effect the required adjustments, these entries are known as adjusting entries.

Cycle Trader

Usual Adjustments

Adjustments of Final Accounts

Outstanding Expenses

Certain expenses relating to a particular period may not have been paid in that accounting period. All such expenses which are due for payment in one accounting year but actually paid in future accounting years or payment of which is postponed are all outstanding or unpaid expenses. All such expenses must be accounted for in that accounting year in which they are incurred, irrespective of the fact whether they are paid or not. In other words, all paid and also unpaid expenses must be recorded in an accounting year if they relate to that accounting year only with a view to ascertain true trading results e.g. if salaries for the last month are not paid, no entry will appear in books of accounts unless these are paid. So profit and loss account in respect of salaries will thus be under charged than the actual expenditure, therefore the profit will be more.

Prepaid Expenses

The, benefit of some of the expenses already spent will be available in the next accounting year also, Such a portion of the expense is called pre-paid expense; since such expenses are already paid, they are also recorded in the books of accounts of that period to which they do not relate. The result shown by the final accounts of a particular period will not be correct because such expenses relate to future periods. Therefore, such prepaid expenses must be adjusted in the books of accounts to arrive at true profit. Generally insurance, taxes, telephone subscriptions, rent etc. are paid in advance, thus requiring adjustment e.g. Rent paid by x for one year on 1.7.79 when his accounting year is calendar year; thus rent for 6 months will remain unexhausted and will be c/f to the next year.

Accrued Income

There may be certain incomes which have been earned during the year but not yet received till the end of the year. Income like interest on investments, rent and commission etc. are normally earned by merchant during a particular accounting period but actually not received during that period. Such income items need adjustments before the preparation of final accounts. Such incomes should be credited to that particular income account. At the same time the income so -earned but not received is an asset because the amount is still to be received.

Income Received in Advance

Sometimes, traders receive certain amounts during a particular trading period which are to be earned by them in future periods. Such incomes though actually received and therefore, recorded i.e. not yet earned. Such incomes should be credited to the profit and loss account of the year in which these are earned. Therefore, such income though received is not the income but a liability of that period

Closing Stock

It represents the unsold stock at the end of the year. Closing stock is valued and following entry is passed at the end of the year: Closing Stock account To Trading Account Closing stock at the end appears in the balance sheet and is carried forward to the next year. At the end of the next year it appears in the trial balance as opening stock and from there it is taken to debit side of trading account and thus closed.

Depreciation

The value of fixed assets diminishes gradually with their use for business purposes. Although this decrease in the value happens every day but its accounting is done only at the end of accounting period with the help of following entry :Depreciation account To Particulars asset

Interest on Capital

The proprietor may wish to ascertain his profit after considering the interest which he losses by investing his money in the firm. Interest to be charged is an expense for the business on one hand and income to the proprietor on the other hand. Following adjusting entry is recorded at the end of accounting period: Interest on capital a/e To Capital a/c Interest on capital being an expense is debited to profit and loss account and same amount of interest on capital is added to capital.

Interest on Drawings

As business allows interest on capital it also charges interest on drawings made by the proprietor. Interest so charged is an income for the business on one hand and expense for the proprietor on the other hand. Following adjusting entry is passed at the end. of accounting period: Capital ale Dr. To Interest on drawings a/e The interest on drawings being an income is credited to profit and loss account is shown as a deduction from the capital.

Bad Debt to be written off

Bad debts are irrecoverable debts from customers, during the course of the financial year. These are recorded as follows: Bad debts a/c To Sundry Debtors a/c It results in the reduction of customers debit balance and addition to the loss i.e. Bad Debts. At the end of the year when the trial balance is drawn, these two accounts show debit balances. The balance on sundry debtors account, thus arrived, is the net balance, after deduction of any bad debts recorded during the year. But after the trial balance is prepared and before the final accounts are drawn trader may find that there are additional bad debts. Such bad debts must be recorded with the same adjusting entry and giving it following effect in ledger and final accounts.

Provision for Bad Debts

At the end of the year, after writing off the bad debts about whom we were sure of becoming irrecoverable, there may still be some customer balances from whom it is doubtful to collect the entire amount. However, it cant be written off as bad because non-recovery of such amount is not certain. But at the same time the balance in sundry debtors account should be brought down to its net realizable figure so that balance sheet may not exhibit the debtors at more than their actual realizable value. Therefore, to show the approximately correct value of the sundry debtors in the balance sheet a provision or reserve is created for possible bad debts. Such an adjustment entry is recorded at the end of accounting year.

Provision for bad debts is an attempt to anticipate possible losses due to bad debts and to keep aside an amount out of profit to meet the loss estimated in the following years. When the provision for bad debts is created, following entry is recorded:

Profit and Loss A/c Dr. To Provision for bad debts A/c

Some important considerations while creating provision for bad debts

(i) Sundry debtors account should not be credited with the amount of provision for doubtful debts because the loss has not actually been incurred.

(ii) Treatment of bad debts or provision for bad debts appearing inside the trial balance. If some balance (credit) is already appearing in provision for doubtful debts account inside the trial balance, it is the previous years unutilized balance of this account. If some bad debts are also appearing on the debit side of the trial balance, these should be transferred to provision for bad debts account, with the help of following entry: Provision for bad debts a/e To Bad debts a/e. It is important to note that, as these items appear inside the trial balance, so these are to appear only in profit and loss account as debtors have already been reduced during the year.

(iii) When bad debts and provision for bad debts appear in trial balance, new provision is to be created and further bad debts are to be written off. If already bad debts and provision for bad debts are appearing in trial balance, these should be adjusted and only difference should be taken to profit and loss account.

If bad debts written off plus bad debts to be written off plus new provision for bad debts is more than the credit balance of old provision appearing in the trial balance, the difference should be debited to profit and loss account.

Provision for discount on Debtors

It is normal practice in trade to allow discount to customers for prompt payment and it constitutes a substantial sum. Sometimes the goods are sold on credit to customers in one accounting period where as the payment of the same is made by them in the next accounting period and so discount is to be allowed. It is a prudent policy to charge this expenditure to the period in which sales have been made, so a provision is created in the same manner, as in case of provision for doubtful debts

An important point to note is that no discount win be allowed on debts that become bad. Therefore, the provision required for discount will be in respect of the other debts only. So the amount of provision for discount be calculated after deducting the provision for bad debts from sundry debtors.

Provision for discount on creditors

Prompt payment, if made, enables a businessman to receive discount. The question arises whether this discount should be treated as income of the period in which purchases were made or of the period when the payment is made, if both events are in different accounting years, it has been well decided by accountants that it should be treated as income of the period in which purchases are made. So on last date of accounting period if some amount is still payable to creditors, a provision should be created for such probable income and amount should be credited to the profit and loss account of that year in which purchases are made. Following adjusting entry is passed for it :Provision for discount on creditors a/c Dr. To Profit and loss account

Losses by Accidents

Sometimes a business suffers certain losses not because of trading but because of certain accidents. These may destroy some fixed assets of the merchant. In such a case the asset account is credited and the profit and loss account is debited.

If goods (stock-in-trade) are lost by accident the value of closing stock win be lower than otherwise. This will reduce the amount of gross profit. So the cost of goods lost by accident is credited to the trading account and debited to the profit and loss account. The increase -in gross profit will be neutralized by the debit to the profit and loss account and thus the net profit will not be effected. The entries to the passed are as follows: Loss by accident a/c To Goods lost by accident a/c

Commission to manager payable on profits

Sometimes the manager is entitled to a commission on profits.. Such commission may be :

(a) Fixed percentage on net profits before charging such commission.

(b) Fixed percentage on net profits- after charging such commission.

Such commission being an expense is debited to commission account. However, as it has not yet been paid, so commission payable account is given the credit and finally it is shown in the balance sheet as a liability. Calculation of Commission First of all trading account should be prepared in usual manner and after transferring the gross profit or loss all expenses and incomes should be debited or credited except the commission which is still to be calculated.

Goods used in business

Sometimes goods purchased for the purpose of resale are used in business as giving them away for charitable purpose or distributing them as free samples. In these conditions purchases account should be credited with an amount equal to the cost of goods used in business and same amount is debited to charity or advertisement expenses account, as the case may be.

Adjustments of Final Accounts

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How Many Kinds Of Main Strategies Are There In Forex Trading?

There may be dozens of strategies in Forex trading. Let's just talk about the roots.

Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.

Cycle Trader

Once we find this kind of "Nature of Market", we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.

How Many Kinds Of Main Strategies Are There In Forex Trading?

In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called "Fundamental Analysis". Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.

If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA's GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America's economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.

In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.

In FOREX, there are two kinds of similar "hedging" strategies:

1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.

For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let's wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don't forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let's say down to 2.0027, we can take 50-30=20 pips, etc.

Some people would doubt it... doesn't this "strategy" sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.

This kind of "Yo-Yo Hedge" can work at any currencies pair.

2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a "Semi-Hedge" trading strategy. It is created based on "Correlation" between some particular currencies pairs. So it is not suitable for every currencies pair.

Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.

There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.

Let's take the EUR/USD and the CHF/USD pairs.

These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let's say you have ,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.

And, this return does not include the buy low/sell high profits.

But, if the base of this kind of hedge collapses, it means the "Correlation" does not exist any more, for example the "Correlation" drops under 50% or lower, there will be a disaster.

Some people call "Arbitrage" as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:

1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.

In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.

More pairs:

AUD/CAD CAD/JPY AUD/JPY

AUD/CAD GBP/CAD GBP/AUD

AUD/CAD USD/CAD AUD/USD

AUD/CHF CHF/JPY AUD/JPY

AUD/CHF GBP/CHF GBP/AUD

AUD/CHF USD/CHF AUD/USD

AUD/JPY EUR/JPY EUR/AUD

AUD/JPY GBP/JPY GBP/AUD

AUD/JPY USD/JPY AUD/USD

AUD/USD GBP/USD GBP/AUD

AUD/USD USD/CAD AUD/CAD

AUD/USD USD/CHF AUD/CHF

AUD/USD USD/JPY AUD/JPY

CAD/JPY EUR/JPY EUR/CAD

CAD/JPY GBP/JPY GBP/CAD

CAD/JPY USD/JPY USD/CAD

CHF/JPY EUR/JPY EUR/CHF

CHF/JPY GBP/JPY GBP/CHF

EUR/AUD AUD/CHF EUR/CHF

EUR/AUD AUD/JPY EUR/JPY

EUR/AUD AUD/USD EUR/USD

EUR/AUD GBP/AUD EUR/GBP

EUR/CAD AUD/CAD EUR/AUD

EUR/CAD GBP/CAD EUR/CAD

EUR/CAD USD/CAD EUR/USD

EUR/CHF AUD/CHF EUR/AUD

EUR/CHF GBP/CHF EUR/GBP

EUR/CHF USD/CHF EUR/USD

EUR/GBP GBP/AUD EUR/AUD

EUR/GBP GBP/CAD EUR/CAD

EUR/GBP GBP/CHF EUR/CHF

EUR/GBP GBP/JPY EUR/JPY

EUR/GBP GBP/USD EUR/USD

EUR/JPY GBP/JPY EUR/GBP

EUR/JPY USD/JPY EUR/USD

EUR/USD GBP/USD EUR/GBP

EUR/USD USD/JPY EUR/JPY

GBP/JPY USD/JPY GBP/USD

2, Hedging Arbitrage:

This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.

One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.

3, Netting Arbitrage:

The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.

For example, suppose you had opened the following positions:

buy 1 lot EUR/USD at 1.4867;

sell 1 lot EUR/GBP at 0.7600;

and sell 0.76 lot GBP/USD at 1.9586.

The netting/clearing gives the following results:

Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.

Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.

Short position from the first pair (8,670.00) in USD and long position from the third pair (5,860.00*0.76) in USD gives you 3.60 profit without open positions and exposures.
Simple? Not really for small traders, may be for those "big brothers" only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.

Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.

JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.

When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF;

Or sell: EUR/AUD, EUR/GBP, AUD/NZD;

Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.

The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.

Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, "double down", buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.

EUR/USD Lots Average or Breakeven Price

1.4650 1 1.4650

1.4630 2 1.4640

1.4610 4 1.4625

1.4590 8 1.4605

1.4570 16 1.4588

1.4550 32 1.4569

The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.

The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.

Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, ...) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of "grid". It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till "Margin Call?"

This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least ,000 in their accounts and can only trade in margin accounts.

But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do "scalping".

Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.

Scalping has some features:

1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.

2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.

3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.

But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let's say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!

Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a "band", or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.

Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.

Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs' price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.

Classical Pivot Point, Support and Resistance Formulas are as follows:

Look at any one chart, the pivot is an average of the previous bar's high, low, and closing prices. In the following formula, "H" represents the previous bar's high, "L" represents the previous bar's low, and "C" represents the previous bar's closing price.

Current Bar's Pivot Point (P)=Previous Bar's (H+L+C)/3

First level of support and resistance can be calculated as follows:

First Resistance Level (R1)=(2*P)-L

First Support Level (S1)=(2*P)-H

Likewise, the second level of support and resistance:

Second Resistance Level (R2)=P+(R1-S1)

Second Support Level (S2)=P-(R1-S1)

Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.

The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner's gain minus the loser's loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report - The NFP is the most influential news release of every month. It's announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don't forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?

It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.

The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or "waves," that recur in market price data.

Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the "market time factor", which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with 0 and one with 0. It turned out to be wildly successful: Gann was able to make ,000 profit with his 0 account in only three months; meanwhile, he made ,000 profit with his 0 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.

Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?

How Many Kinds Of Main Strategies Are There In Forex Trading?

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