What is Doing Business As or DBA

Every company has a registered legal name, yet it may use another name for marketing purposes and this called Doing Business As(DBA). Many people have a name that is widely used, though it differs from the name used in the passport or birth certificate. This is no legal problems using different names. When businesses use multiple names they specifically mention DBA. More details on DBA are provided so that a business owner can decide whether it is right for him, the procedure for filing a DBA, and the associated responsibilities.

What is a DBA?

In the United States (U.S.), a DBA helps citizens identify the real business owner. The DBA is the assumed or fictitious name for the business, the operating name of a company. Consumer protection laws have made it mandatory for businesses to specify DBA so that business owners who are dishonest cannot avoid legal problems by using different names. When a business files a DBA, this information is usually published in the local newspaper, typically in the local classified, fictitious business name. It helps the community find out who is the real owner of the business.

Why a DBA is required?

Some of the reasons why a business in the U.S. would require a DBA are discussed below

Sole proprietors may be selling a product or providing a service, for which they may wish to use a relevant business name that differs from their own legal name. In this case, they will have to file a DBA. If the business owner is using his full name in the business name, the DBA may not be required, otherwise, it is required. Business owners can also check with the local county or town clerk’s office to find out whether it is necessary to file a DBA.

Limited liability companies(LLC) and corporations

When a business is incorporated, a legal entity is created which is different from the business owner. This implies that the business owner is absolved of the personal liability associated with the business

An LLC is a combination of a sole proprietorship and corporation. Though the LLC owners are not responsible personally for LLC liabilities, the LLC will stop existing if it declares bankruptcy or if an owner dies. A business owner who has already decided the business name for his LLC or corporation does not require a DBA. Yet if the business owner wishes to use a name that differs from the corporation/LLC documents, he will have to file a DBA. A DBA is required if the business owner is planning to use any variation of his original name for doing business.

Why DBA is a recommended business strategy?

Though business owners find that filing for a DBA is time consuming, tedious, there are many reasons why a DBA is recommended

– For sole proprietors, DBA filing is an inexpensive and simple way to use a specific business name. The DBA can be used to create a distinct business identity without forming a corporation or LLC

– Corporations or LLCs can run multiple businesses without forming a separate corporation or LLC for each. This will reduce the expenses and paperwork, though the business owner has multiple income streams

– DBAs help the business owners enjoy legal protections especially if they are corporations or LLC. The business owners may not get these protections if they do not file for a DBA or use another name.

– Business owners often do not want to run a business using their own names. The procedure for starting a business using a personal name is simple and is preferred by sole proprietors. Yet many business owners want some privacy, to separate the business from their personal life, Filing a DBA using another name, ensures that the personal name of the owner is not mentioned when the business is discussed publicly

– Many companies want to give their business a name matching the service or product they provide. Using a DBA allows them to have a distinctive, creative business name.

– Banks may make it mandatory for partnerships, sole proprietors to show proof of DBA registration/filing before they open a bank account for the business

– Many online businesses are selling different product categories, and they may want different websites using the same business name

– Filing a DBA can help in preventing others from misusing the business name, registering the same or similar name.

Filing a DBA

Business owners can also consult an attorney if they are not sure about the benefits. Every state and county has different rules, forms, fees, and other requirements for filing a DBA. State-wise DBA filing details are provided by the US SBA in a chart. In some states, the form, office for filing DBA may differ for sole proprietors, partnerships, LLC may differ. The processing time for a DBA also differs depending on the county. Some other information for filing a DBA are:

– A certificate of Good standing is required for an LLC or corporation. This certificate is provided by the secretary of state, and a form has to be submitted to get the certificate.

– Inc. Corp or LLC cannot be added at the end of the DBA name

– the county or state may ask the business owner to announce their DBA by advertising in the local newspaper so that people are aware of the DBA

– Payment and filing methods differ in various states. Some states accept online payment using debit or credit card and filing while in cases, cashier’s check, money order, notarized documents are required.

– To keep the business and personal matters separate it is advisable to apply for an employer identification number(EIN), so that the business is not linked with the social security number.

– DBA should be renewed, usually after every five years, ideally before the expiry date

– If there any changes in the DBA like address change, having a new partner, the DBA will have to be revised, with the procedure varying in each state.

– It is illegal to run a business using an assumed name that is not registered, and in some states, penalties are imposed for non-registration. Hence it is advisable to hire a specialized service that files legal documents and ensures compliance with relevant laws.

Conclusion

The DBA is an important part of the business, so it advisable to hire the services of a business, legal expert for DBA filing

Before you step into any kind of business, you must know its basic fundamentals. When the world that you are venturing into is related to finance and trading, the need to educate oneself becomes imperative. If you are engaged in or wish to trade in the forex market, you need to rely on the same two basics that are applicable in the stock market, that is, fundamental analysis and technical analysis.

In stocks, traders use a company or an organization’s balance sheet for technical analysis. The charts are used for the purpose. The price is assumed to reflect all new changes. The same concept is followed in the forex market as well.  However, it is the fundamental analysis that is different as countries don’t have balance sheets that can give a clear idea to the traders.

What are Forex Fundamentals?

Fundamental analysis in forex trading deals with looking at the intrinsic value of any investment made. The traders look at the economic conditions that can affect the valuation of a nation’s currency. These factors, also known as the fundamentals of forex trade, play have the authority of controlling the currencies movement. But, what are forex fundamentals? 

Like in the stock exchange, the technical analysis is the same in the forex trading market. The traders compare balance sheets of various institutions and organizations and take calculated risks. Things are different in forex exchange markets as it depends on the value of currencies of different countries and the government does not handout balance sheets!

What are forex fundamentals and what do you mean by their analysis? Fundamental analysis refers to the method of assessing the financial markets to understand the price forecasting. While in stocks, it is limited to the profits and losses of an institution, in forex, it focuses on a much broader perspective. It takes into consideration factors like interest rates, GDP, housing stats, employment ratio, productivity, and other things that directly or indirectly affect the status of a country’s economy.

The price and value are two different things and they may vary when you are looking at an asset. Fundamental analysis in Forex, and other financial markets, focus on this principle. This is why assets are sometimes overpriced or underpriced in various markets for a short period of time.

Fundamentalists state that even if an asset is mispriced in the short run, its value will not change. It will return to its correct price eventually. The goal of fundamental analysis is to use the tools to find out the true value of an asset, to compare it to the current price, and to locate a trading opportunity using their finding.

The process of identifying the value and price of an asset is the key difference between technical and fundamental analysis. In technical analysis, the center of attention is the current price which is the last thing a fundamentalist would focus on. Fundamental analysis is meant for long term trading. Its application will not get desired results in day trading, which focuses on short term price shifts.

The Methodology

Before we jump on how to read the fundamental analysis in Forex, it would be wise to learn its methodology. Fundamental analysis in forex does not compare the current data of a single economic indicator like CPI to its previous data. As mentioned earlier, it has a long term and a broader approach. There are many economic theories that attempt to utilize information sourced from various economic reports and make it comparable to calculate the risk involved in the Forex market.

Mong the numerous theories, the most popular one focuses on the notion of parity. This is a condition at which currencies should be exchanged and adjusted according to their local economic factors like GDP, Production Index, inflation, interest rates, and more.

Understanding Technical and Fundamental Analysis in Forex

In technical analysis, the traders try to find trading opportunities by studying the price movement. The traders compare the current and historical patterns to prepare conducive data that predicts the future price direction. This data often has line charts that allow the traders to see the price movement clearly. While the term used here is ‘technical’, this data is open for interpretation.

The fundamental analysis is less focused on the price movement and more concerned with the socio-political and socio-economic elements of an asset. These factors have been known to affect exchange rates. Fiscal policies, too, have a major impact on the value and exchange of currencies. Another factor that affects the exchange rate of currencies is the monetary policies of the central bank. Traders also look at the political stability of a country before making any investment. This is why the forex market often sees a change in the investment pattern in the months following any major election. Fundamentals of Forex are not just restricted to these factors. They also give due attention to the natural disasters that can affect the political and economic state of a country.

The Positives and the Negatives

The Forex traders are often hooked to the news in the anticipation of a new economic report, survey, indicator or even an independent study, released by the government sources of private institutions. There is a plethora of factors that can affect the value of a currency and its exchange rate. Thus, the traders closely study everything that can give them hints about the health of an economy.

Fundamental indicators are published regularly but at a certain interval of time. The fastest frequency could only be weekly publication but in currency trading fundamental analysis, new data, in the form of a price quote, is released every second. In some countries, capital accumulates slowly and therefore, flows gradually and vice versa. This flow of currency is tied to the strength of the economy. If the financial indicators show that a certain economy will hold strong, there will be more transactions made around that currency. As it will look more attractive to the traders, there will be more foreign investment made in that currency. This will further strengthen the economy, leading to an increased flow of currency, and the traders will have higher chances of making gains.

Taking the discussion further, the investors will be converting their capital into the currency of the country in question in order to invest. This will increase the demand for the currency, and following the basic rule of demand and supply, the value of the currency will get appreciated. However, the rules of microeconomics are not always linear when they are applied to Forex. We have seen depreciation of currency even when the economy is healthy. Currencies and company stocks behave differently. Currencies are not always directly proportional to the health of the economy.

Finding discrepancies and manipulations in company stocks are easy as you can acquire balance sheets and other financial documents of private companies. As currencies are tools in the hands of government officials, they can be easily manipulated by the policymakers.

Traders and investors look for signs of strength and weakness when economic reports and data are released. The market generally has some ideas or sentiments about the economy of a country. A majority of them lean in one direction. When price changes are made prior to the release of the indicators, it is known as ‘priced in market’. In such a case, there is little commotion after the release of the actual data. Diametrically, if the data varies drastically from what was anticipated or the market is unsure, the trade becomes volatile. Only experienced traders can trade around the time when an indicator is about to release. Rookies are bound to make mistakes during a commotion in the market when practicing fundamental analysis.

1. Economic Indicators and how to read fundamental analysis in forex

The value of a currency is based on various factors, the major one being its economic condition. Governments or private organizations release various reports, detailing the economic performance of their respective country. These economic reports contain important information that can be used to understand the country’s economic health. 

These scheduled reports provide the market with indicators of whether the country’s economy is improving or declining. Like earnings reports, SEC filings, and other releases, these reports have an effect on securities as well. Any deviation from the norm leads to large price and volume movements. Thus, traders keep a close eye on all the reports.

Unemployment numbers and infrastructural development are amongst the few things that are mentioned in these reports. Aspects like housing receive less coverage. Irrespective of with stat is explained in detail, every indicator is important.

2. Gross Domestic Product (GDP)

Gross Domestic Product or GDP is the value of all final goods and services produced in a country. It is an important indicator of the economic condition of a country. As it represents the total market value of a country’s production, it helps in identifying whether the country is making progress or not. Though, this does not show the wholesome picture of an economy, the two reports that are issued in the months before the final GDP figures are studied by the traders. If these reports are significantly revised, red flags are raised.

3. Retail Sales

The retail sales report broadly takes into account total receipts of all retail sales in a given country. This report is created from a broad sample of retail stores throughout a country. It allows the researchers to understand the purchasing pattern of consumers. It also takes into consideration variables like seasonal shift and adjusts them accordingly. This report is important for forex traders too as it enables them to predict the direction of the economy. If natives of a country are purchasing more than just commodities fo basic necessities, it’s a sign of economic growth that can add to the value of the currency.

4. Industrial Production

The rate of production of goods says a lot about the development of a country. The report on industrial production shows the increase and decrease in the production of industries, mines, factories and various utilities within the nation. It also tells about whether or not the factories are working at their full capacity. In short, it shows capacity utilization as well. If there is a steady rise in the production of a country and every sector is producing at its near capacity, it is safe to conclude that the country is growing.

Traders who are concerned with the volatile utility industry use this indicator to measure utility production. It is such because whether conditions affect industrial production. If there is a considerable fluctuation between two reports due to weather changes can affect a currency significantly.

5. Consumer Price Index (CPI)

The CPI or Consumer Price Index highlights the change in consumer goods prices across 200 different categories. The CPI report is studied alongside a nation’s exports. It gives you a clear idea of whether a country is losing money on its products and services. Traders have to be very vigilant when monitoring the exports of a country. The prices of exports are often unstable as they correspond to the strength and weakness of a country’s currency.

Purchasing Managers Index (PMI), Producer Price Index (PPI), Employment Cost Index (ECI), Durable Goods Report, Employment Cost Index (ECI), and housing stats are other major indicators that can be used by the traders. In addition to these government-issued reports, there are some reports and independent studies that are issued by private institutions like the Michigan Consumer Confidence Survey. These combined reports are very valuable to assess the risk.

How to Use Economic Indicators

The value of a country’s currency depends on its economic conditions. Any change in the economic indicators directly affects the price and the volume of a country’s currency. One must know that while all the economic indicators are part of the fundamental analysis of forex trading, they are not the only factors on which the value of a currency depends. Technical factors, third party reports and various other things can have a bearing on the currency value. 

• Keep the following things in mind while conducting the fundamental analysis in the forex market:
• Always have an economic calendar around you that lists the release date of the indicators. You should also keep an eye on the future as markets do move in the anticipation of a particular indicator or report that is expected to be released in the future.
• Analyze which economic indicator is getting the most attention in the market. These indicators often act as catalysts for the upcoming price rise and value movement.
• Understand what the market is expecting from a particular report or indicator and then cross-check if that expectation was met or not. This is more important than the actual data. There is seldom a huge difference between the expectation and the reality but if such is the case, you need to be careful.
• Be patient and never jump the gun if you hear something. Many times numbers are revised once they are released. Since forex trading is very sensitive to every pip, things can change rather quickly. Wait for the revisions, look at the trend and then proceed.

Conclusion

The forex trading market is no place for an impatient person. There are various government reports and independent studies that can be used to understand the fundamentals of forex trading. One needs to understand how these economic indicators affect the value of a currency. Take your time and don’t rush into anything.

Forex trading is one of the easiest trading markets, perfect for amateur or beginner traders. You trade in currency pairs like EUR/USD,  USD/JPY, EUR/INR, where the former is the base currency, and the later is the counter currency. Certain tradings require fixed marginal equity like you need a safety deposit of $2500 for day trading. But, you can start forex trading with a small investment if you plan properly.

When the forex trader has a small investment, the main focus and trading goal is not profit. Usually, the main goal is trading skill improvement, low drawdown, and a high-profit percentage portfolio gain. Small investment traders can build a reputation, improve skills, learn to trade, and then in the near or far future to raise funds.

Forex Trading With Small Investment example:
A trader can deposit $1000 in case A or $10 000 in case B and start trading. In case A at the end of the year trader will earn in the best scenario $200 and in case B around $2000 if the maximum drawdown is always less than 5% and maximum risk per trade less than 1%. The best traders (who properly do risk management) earn around 20% per year. Whole year traders in case A and case B will work and for 365 days or 52 weeks of trading and analysis, he/she will earn only $200 or $2000. Each online or offline job has better profitability because this amount of money freelancers can earn in several days or a couple of weeks.

Portfolio from $100K or more necessary if traders want to make a profit at the end of the year and have a decent monthly salary.

These statements are not understood by traders very often because a lot of beginner traders believe that they can deposit $500, earn each month 20%, and be very soon rich. This is a misconception of practical trading.

Know the Basics

One cannot take a leap of faith in trading. You need to educate yourself and know about the basics of forex trading before you make any kind of investment. Irrespective of your experience in trading markets, you must gather as much information as possible if you wish to make it worthwhile of your time and investment.

You don’t have to buy an encyclopedia on forex trading but you must understand all about risk management. If you are an existing trader who hasn’t been able to turn things for good, you should take some of your deposit money to spend it on learning resources. One good read would be ‘Chartered Market Technician’. It explains in depth what money management. It will also teach you some advanced analysis techniques. One of the USPs of this read is that it talks about trading jargon. It will train you in talking with professionals of this world like bankers and established brokers. If you are not interested in reading a book, you can talk to established traders and get the required exposure.

Risk management is very important.
If trader risk 1% per trade it is possible that in one-moment portfolio goes down more than 15%. A trader can very hard recover loss because this Table:

Start Small

Even if you are feeling flush, do not make the rash decision of putting a large sum towards forex when you are just starting. Make a really small investment first and then work towards building your empire. First, learn to trade with pennies and then with dollars. Find brokers with whom you can open an account with a few dollars.

Be Regular with Investments

Once you start getting a hold of it, start investing regularly. Your investment could be as low as $5. You might think that it is nothing but since you will be investing it regularly and getting compounded gains, you will end up with a sizable account at the end of a year. Investing a small amount will not put a constraint on your budget but doing it regularly will be significantly beneficial.

Learn to be Patient

Trading is not like gambling where you have to wait for the odds to be in your favor. Traders take well-calculated risks. This place is not a sprint but a marathon. You have to be patient with everything, whether it is learning the art of forex trading or hoping for returns.

When you are trying to make big with a small budget, things can get frustrating, but it will prepare you for the future. If by investing $10, you are gaining $1, it is still a profit of 10%. As your investment will increase, your gains will chase that as well. You cannot master forex trading with just one trade.

Conclusion

Patience is a virtue and this is especially in the case of forex trading. You can make big even with a small investment. All you need to do is to remain focused and disciplined.

In trading terms, points, pips, and ticks are used to highlight the changes in the financial market. Since even the slightest change can cause ripples of effect, points and ticks are assigned to denote them. A point stands for the smallest price change on the left side of the decimal point and a tick denotes the same but on the right side of the decimal point. Pips are used in the forex trading market to denote the change in a currency pair. In short, this is the traders’ lingo. But, there is more to these words. Let’s dig deeper.

Defining the Terms

Points: Points are typically used in the futures trading market. When the smallest rise in the price occurs on the left side of the decimal point, it is referred to as a point. For example, if S&P 500 E-Mini (ES) futures see a change in futures point value and jumps to 1314.00 to 1315.00, we will say that there has been a price change by one point. The movement of a point has a dollar value attached to it. However, the exact value of a point varies by exchange. For example, with each point movement in crude oil on the Chicago Mercantile Exchange, the market sees a fall or rise of $1000.

Ticks: Points are the smallest increment in price. These points are composed of ticks like minutes are made up of seconds. Traders talk about ticks when there is a movement in prices on the right side of the decimal in the futures contract. Tick is the smallest possible price variation that can be measured in the trade market. The value of ticks is not set in stone. Its size and value changes as per the futures contract. For example, the size of a tick in the S&P 500 E-Mini is 0.25, in crude oil, it is 0.01, and it is 0.10 in gold futures (GC).

The increment in a point is determined by the size of a tick. Take the case of S&P 500 E-Mini. As one tick is worth 0.25, it will take four ticks to increase a point. Similarly, crude oil will see a rise in one point with the movement of 100 ticks, and GC will see a change when atleast 10 ticks move.

As mentioned earlier, ticks are fractions of a point. For crude oil in CME, every tick value is $10 as each point is worth $1000, making the tick value exactly 1/100th of the point. You can visit the websites of various futures trade to know more about the values.

Pips: Pips are used in forex trading. They signify currency pair price movements. Pips move when the fourth decimal place of the price moves by one. For example, if your base currency EUR and the counter currency is USD, the currency pair will be EUR/USD. If this pair moves from 1.1506 to 1.1507, this is the movement of one pip.

A pip applies to all the currency pairs, except for those with Japanese yen (JPY) as the base or the counter currency. In currency pairs with JPY, one pip movement occurs at the second decimal place as opposed to four in regular currency pairs. For example, in the EUR/JPY currency pair, one pip movement will occur if the pair moves from 109.26 to 109.25.

These days, brokers offer fractional pip pricing as well, that is, they will quote a fifth decimal place as well. For example, if the currency pair EUR/USD moves from 1.08085 to 1.08095, it is one pip movement but if it moves from 1.08085 to 1.08095, it will be considered half a movement.

You can covert ticks to pips. One pip is equivalent to 10 ticks. Depending on the currency pair, the pip value varies significantly. If USD is fixed as the counter currency, the pip value is fixed at $10 per $100,000 traded. If USD is the base currency or if the trader is not using USD at all, the pip value or the forex point value will fluctuate.

Terms and their Markets

While points, ticks, and pips are all trading terms and have the same purpose, to describe price movements, they have different their particular markets. We use points and ticks in the futures market and pips in the forex market. The trading point meaning is very subjective. Stock traders liberally use them out of context as well. They usually use the term ‘points’ to describe the movement of dollars in stocks. The term ‘tick’ is used to define the movement in the tick charts. This is not even a monetary movement.

Thus, we can say that while these terms have set definitions, brokers and traders use them as they please which can easily confuse a new person!

A new bar that is drawn after a certain number of trades is known as a tick-chart and the chart that is used to mark the price movement during a particular trading session is known as a time-chart. Both charts are essential in the world of finance and trading. The trader will select one or use both as per his requirements. In a tick-chart, a new bar is created, either up or down, following every tick, according to the previous set number of trades. A time-chart differs from a tick-chart in various ways. Its principle is a specific timeframe. It can be configured for different time periods. Both serve different purposes and traders can select any.

Understanding the Basics

The two most popular charts used by the traders are candlestick and bar charts. Both charts provide the same information to the traders. The major difference between the two is that candlestick charts are color-coded, making them more user-friendly.

A trader can create price bars, based on time-charts or tick-charts, using these two types of charts. Both time and tick charts have their shortcomings. Experienced traders often use both the charts to analyze the risk and make a trade. It would be wise to understand all the types of charts in detail.

Tick chart vs Candlestick

One-minute or time-charts are set for numerous time frames. These time frames can be long or short. These can be one-minute, two-minute, or five-minute charts. Though, a trader would use a shorter timeframe for active trading. When the determined time period elapses, a new price bar is formed. 

When trading with one-minute charts, a new bar forms every minute. It shows the high, low, open, and closes for that particular period. This leads to the creation of a uniform x-axis on the price. All the price bars are evenly spaced. A trader will get sixty price bars over a period of an hour. As the market can turn completely within a minute, one-minute charts are suitable in highly sensitive trading markets.

512 tick chart

Tick charts are based on the number of transactions rather than the time period. For example, in a 512 tick-chart, a new bar gets created after every 512 transactions, making it more suitable for the traders who make a significant number of transactions in a day. You can keep the ticks as low as 5 and raise the bar as per your needs. 

The x-axis of a tick-chart is not uniform like that on a time-chart as there can be active and slower times throughout the day. The most active time is when the market opens. As more transactions are happening during that spell, the tick bars occur rather quickly. When the activities are not as volatile, for example, during the lunch break, it may take some time for even one bar tick to get created.

Tick-Charts vs Time-Charts

There is no right answer or tool in the world of trading. Both tick and time charts are important to study the market and have their set of pros and cons. Which is more suitable for you depends on the trading platform. 

A tick-chart would be more useful in a market where the flow of transactions is higher. Here the tick-chart will provide more information than the time-chart. From smaller-scale price movements to a significant price change, the tick-chart will keep the trader more informed. Similarly, when the number of transactions is smaller,  a time-chart will be more beneficial. The trader will not have to wait for a certain number of transactions to happen before he can get the required information. Irrespective of everything, a bar will get created every minute.

Situation 1: 

Consider the time when the time when the market opens. Several tick bars are created within the first minute itself. It tells the trader about the multiple price swings that he can use to his benefit. If he were using a one-minute chart, he would have to wait for an entire minute to receive the data. By that time, he would have lost his window of opportunity.

Situation 2:

Consider the lunch break where around ten transactions occur each minute. If you were using a 90-tick chart, you will have to wait for 90 transactions to happen. A trader wouldn’t have received any information the transactions were not enough to curate a new bar. However, he would get information about every minute by using a one-minute chart.

The tick-chart shows a trader the high and low activity timeframes by adapting to the market. Fewer bars means that there is a dip in the number of transactions and vice-versa. The one-minute chart, on the other hand, will keep producing a bar as long as at least one transaction is happening within that minute. They do their work even when the market is slow.

In conclusion, it could be asserted that whether you are considering tick-chart vs time-chart or tick-chart vs candlestick, you cannot hope for a perfect answer. Both charts are important for a trader. He may select the one that suits his needs. Most traders often use both, rather all the charts, within a given day. Every transaction, every minute, every price swing is crucial in trading markets and these charts enable the traders to take calculated risks. These are the tools on which their trading strategy depends. Thus, it can be asserted that neither of the charts is better than the other. Their applications are unique and important.