Posts in Category: My Blog

SEC To The Rescue Of Cryptocurrency Demonetisation

While many legislatures around the globe are giving shock treatments to digital currency lovers by making all transactions with bitcoins as illegal, these troubled coin owners are looking up to one entity for relief. That is the supreme regulator of trade and stock market and the assets; the US Securities and Stock Exchange Commission.

The spreading demonetization move is preventing the miners and traders to carry out an exchange or transaction in the open market and has left millions of coin owners as guards of worthless currency. These coins may get trapped in the wallets as dead money with no way to enter the open market or another market and affect the cash flow in the economy.

Although there have been efforts to get some relief from the money transmission laws of each local or state governing bodies, it can lead to chaos and overlapping of rules, thereby confusing the traders. As a part of consumer right protection and financial policies, the holding and exchange of these currencies are to be carried out only by licensed money transmitters. In order to enter the open market, the traders have to surpass multiple governing bodies and the rules of each body may differ. This leads to time delay and extra expenditure along with the extra effort of meeting documental requirements and essentially discourage the cryptocurrency traders.

A single regulatory body is a solution

The officials of SEC have made remarks stating that for an investor or a trader to trade on digital currencies, he must register as an official trading entity or use any trading platforms registered with the SEC. He can play the roles of a security trader, broker, dealer or trade using the national securities exchange or other alternative trading systems. This will ease out the rules imposed on money transmitters, who in reality have a different method of activity when compared to digital currency transactions.

Many states exempt the aforementioned trading entities registered with the SEC from their local rules for money transmission license.

As a holder of digital assets and to continue as a trader in cryptocurrencies, you can get relaxation from SEC by utilizing the following tips. Continue with the activity using digital assets which are traded under the federal law and if you have other forms of cryptocurrencies, try to convert them with any loopholes.

If both the above options are ruled out, then you can put the effort to become a licensed money transmitter. Check for any categorical exemptions under the federal laws, as governed by SEC and constructively use them.

SEC can simplify the existing stringent rules and provide clarity regarding various regulatory overlaps, particularly of different states. By acting as a central regulatory authority rectifies all these problems automatically.

Managing Financial Capital

Financial capital is nothing but the economic resources with a company that is used by the company in meeting its demands as well as the demands of its customers in the form of the various products and services, the major aim of any business is to help the customers in fulfilling their needs thereby making a profit benefitting itself. Nothing happens without an initial investment and it is this financial capital that is invested in the company that speaks about how a company would be able to manage its funds for all its purposes. So when this initial requirement for the profit dreams is made and planned properly, it would definitely help the company in achieving profits to the levels expected by it.

Strategies that would help

Now below listed is a thread of situations where a business could get tested for such wise decisions regarding the financial capital. These are just simple strategies that would help a business in managing and appointing its financial capital in the right way.

  • Satisfy your customers – customers are the kings of the market and they are the revenue generators for a business. So try to give them the best instead of looking at what the business gets from the services provided. This is important because when customers are satisfied and happy with the products of a company it would automatically bounce back in the name and form of profits and hence a business should mainly concentrate in serving its customers in the best possible way. And in doing this, the business should also be ready in changing its plans according to what the customers expect from them, be it even a change in the numbers.
  • Do not wait for a failure but always have a back up for every possible thing that might affect your business, be it a business decision or a business equipment, in general, we wait for the worst to happen and then try to replace or repair them with another best one. This should be avoided which is the most common mistake committed by many of the business organizations these days.
  • When you have debts, it is a wise and smart option to clear them first instead of mounting upon them. You might have a need to increase your loan amount in the name of some new business venture but in such situations, it is always advisable that you use a part of this new loan to offset at least a part of the previous loan.

All About Financial Modelling!!

As a quote goes, “Money is an amazing teacher, what you choose to with it, tells whether you are powerful or a powerless person”!! money is obviously the biggest weapon that can make one or break!! So, how we utilize it and what we make out of it is important.

Any business needs a lot of money, or say the basic bare minimum to sustain through and to fill the commitments. We see just the outline of the business, as in investing money, business works and bring either profits or losses and then the story goes on. But, have you ever thought how a well-established corporation or even the new start-up that just launched a year ago is rocking well?

What’s behind all that success? How do they manage and what’s missing in others? that is Financial modeling in the background!!! So, what is this? Read on to know.

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Financial modeling:

In basic words, it’s a rough process that says about all the operations of the organization in pictorial representation or graphs. This idea forecasts the financial scenario of the organization, with various parameters in the background.

What exactly happens in the background?

A financial model is inclusive of mathematical calculations that are taken from the history of the organization, showing the current financial scenario, the future projected growth plan financially, and the inventories and the actual depreciation expected over time.

So, the model has various categories and types based on different components variation, but there are a few that many companies swear by. Few are here:

  • The Discounted Cash Flow model
  • Leveraged buyout model
  • Mergers and Acquisition
  • Option pricing
  • Sum of all the parts
  • Comparative Analysis

So, now let’s talk about the necessity to have the financial modeling done:

These models as we said are used by small and big companies at large. Any company who is aiming to grow steadily is sure to use such models, that helps them in adhering to the goals and objectives set at the beginning.

  • Keeping an idea and a plan for the company’s reaction to the economic growths, that might surge once or even hit low levels hardly.
  • Getting an idea about the sum needed to borrow from growing expansions and operations.
  • Getting into IPO, by analyzing the value of the firm.
  • Defining the levels of risk associated with the business and organization
  • Comparing the organization with its peers in the industry and having growth plans.

 

 

 

How to manage your money while trading using automated trading robots?

In order to be on the safe side with any investment plan, application of good money management techniques is essential, especially when you intend on trading on the Forex. Thus, a full-proof trading plan is very important. However, this is easier said than done because there will come a point in trading where you might have to go all-in to maximize your earnings.

Hence, along with a good trading methodology comes the ability to take timely actions and the capability to take and handle risks. Being a risk-taker will increase your confidence in the future trades and will multiply the profits within a short period, as long as the cards are played right.

Minimize risks and maximize profits

In order to minimize risks and maximize profits while trading, two important concepts of money management should be applied. These include:

  1. Investing only a maximum of 10% or less than 10% of your total investment capacity on a single asset

  2. Investing only a maximum of 50% or less than 50% of your total investment capacity at a time

In addition to setting limits on the total amount to be invested per asset per trade, other trading limits can also be predefined in order to control and manage your investments. Some of which are listed below:

  1. Buy Limit – This is the value of the order as mentioned in the trade and it indicates the value at which a particular trade is placed. Buy limit value gives a projection of the future value, that is whether or not the value will increase or decrease.

  2. Buy Stop – This is the value at which trade requests are made in order to buy a specific trade at the quoted price.

  3. Sell Limit – This is a request that is made to sell the trade and the price is usually more than that specified in the trade order.

  4. Sell Stop – Here trade request is placed to dispose the asset at a bid price that is equal to or greater than that mentioned in the trade order.

  5. Buy Stop Limits – This is the limit that is achieved when the future price reaches the values as stated in the trade order.

  6. Sell Stop Limits – This is the limit that used to stop an order placing and is achieved as soon as the bid value matches the order value.

Thus, efficient money management strategies will help you make you better investments and avert or at least minimize trade losses.

Bitcoin Mining

You must have heard about cryptocurrencies, especially Bitcoin. There could not be a single person out there who must not have heard about this cryptocurrency that rallied so fast in the last few years.

What is even more interesting to know is how the cryptocurrencies are produced or in other words mined. Cryptocurrencies are not produced like regular money. It is not governed by any central authority who can print it. Cryptocurrencies get produced by a method known as mining.

Mining of the new blocks

There is no central bank that regulates cryptocurrencies thus there is another way how every cryptocurrency transaction is gathered and recorded. This is done to form a new block. Those who carry out these tasks are known as dubbed miners. Every time some transactions are on the block when it gets appended a Blockchain. Those who append the block, in turn, get rewards with some amount of the cryptocurrency.

The task is hard to do and this is done so that the devaluation of the currency is prevented which could happen when lots of blocks are built. The miners would have to solve some complicated problems in order to mine cryptocurrencies.

Limitations of mining cryptocurrencies

The miners have to compete against each other when they are mining cryptocurrencies. The one who gets the right one forms a block and he gets a cryptocurrency payout.

The difficulty level gets higher and it gets harder as each new block needs to be mined. The rate at which the new blocks get created is steady. Also, there is a finite limit of the number of units that are generated.

Mining cryptocurrencies- Is it worth it?

Cryptocurrency mining can make some income for you and it can be done as a hobby. The digital currency is very assessable to the public now and a person can earn in hardware costs only. Cryptocurrency mining is definitely not a way to make enough income to be the primary source of income. You also need to invest a lot into hardware to start mining cryptocurrency in huge amounts.

It is late now and not as lucrative as it would have been had you can start mining Bitcoin in 2009.

The Bitcoin mining is not recommended for those who work on small scale. There is a lot of maintenance and investment costs and the process is also very difficult. This does not make it very profitable. It is profitable only when done on a large scale.