Cash flow numbers are not credible. They never reflect business reality. Using them in a business plan tells a potential investor that you are either stupid or dishonest. This isn't message that you want to convey to a potential investor in your company.

Credible numbers are reports that your accounting software can produce for you. The two reports that should be in your business plan are your current Balance Sheet and your Profit and Loss Statement (P&L). Many investors may request these reports for past years, as well.

A Balance Sheet lists your company's assets, liabilities and owner's equity in company. It's measure of your company's financial health. It tells an investor what you are doing. It tells investor net worth of your company. It allows investor to determine your company's ability to pay your debts. It will identify potential liquidity problems. An investor can also spot degree to which a company is leveraged, or indebted.

Only family, friends and fools invest in a company to pay off its debts. Your balance sheet will give a potential investor Liquidity Ratios needed to determine if debt service is actual goal of equity investment. The usual tests run on your balance sheet will be Current Ratio, Quick Ratio, Working Capital and Leverage. You should run these tests to know their outcome, before you submit your business plan to a potential investor.

The Profit & Loss Statement is a snap shot of your balance of money as it flows through your business over a specific period of time, such as a month or a year. The P & L break out revenues or income, expenses and profit or what is left over. A Profit and Loss statement is easiest way to tell if a business has made a profit or taken a loss over a given period of time. The most important figure referred to in it is net profit (also called Retained Earnings) or what is left over after revenues are used to pay expenses and taxes.

If you don't understand financial reports read a book on topic, before you submit a business plan to any investor. Here are three popular titles:

1. How to Use Financial Statements: A Guide to Understanding Numbers -- by James Bandler. 2. The Interpretation of Financial Statements -- by Benjamin O. Graham, Spencer B. Meredith. 3. The Guide to Understanding Financial Statements -- by S. B. Costales.

There are two business groups who usually object to using credible numbers in business plans. Swindlers, who argue that you should sell sizzle and not steak. After all, they never have any steak to sell. And, entrepreneurs of startup companies who argue that credible numbers are negative numbers and thus using their P&L and Balance Sheet reports will turn away potential investors.

RULE #1) ~ Cut your losers; let your winners ride.

YOU WILL HAVE LOSING TRADES.

We do. Every FOREX trader does. The key to being a consistent, predictable, reliable trader is to, at end of day, add up more wins than losses. And, when you KNOW (based off your trading rules), without a doubt, that YES, indeed you are, in a losing trade, don't keep losing money (lowering your stop loss) just to *prove you are right* or your rules are wrong (however you want to look at it).

Let's face it - you can't turn a sow's ear into a silk purse. You can't change spots of a leopard and you can't turn chicken poop into chicken salad. The best trades are usually "right" immediately (the techniques, rules, methods and strategies we teach at RapidForex.com will be your best indicator for just what a "right" trade really is).

Remember, people have been trading markets for a hundred and sixty years. The smart traders know there's going to be another trade. Cut your loses short and compound those winning positions.

RULE #2) ~ Thou Shall Not Trade FOREX Without Placing of a Stop Loss Order.

When you place a STOP order, right along with your ENTRY order, via your online trade station, you've just automatically prevented a potential loss from "running" too far.

Before initiating any trade, if you haven't already figured out at what point you would be wrong and would want to cut your loses or, at very least, reevaluate your position from sidelines, then you shouldn't be putting on trade in first place.

Show us a FOREX trader who doesn't use stop loss orders and we'll show you someone who loses a lot of money.

To make a profit, in FOREX, a trader (possibly YOU soon?) can enter market as a *buy position* (known as going "long") or a *sell position* (known as going "short").

For discussion, let's assume you've been studying EURO.

Your trading methods, rules, strategies, etc., tell you that prices will rise during a particular timeframe. So you buy EUR/USD pair (or, technically, you will simultaneously buy euros, base currency, and sell dollars).

You open up your handy trading station software (provided to you for free by online broker), which resides on your desktop, and you see that EUR/USD pair is trading at:

<< EUR/USD: 1.3242/45 >>