Trading

Forex: How to Refine Your Trading Strategy

For the inexperienced trader, forex is a good way to lose money. To be successful on the foreign markets takes a great deal of skill, many hours spent researching and learning about the field, and a well-honed and cleverly executed trading strategy. It is, ultimately, a tactical game, and if you want to come out on top, you need a plan that will maximise your chances of success. Here are just a few tips to help you formulate one…

Make Plans and Stick to Them

When you begin trading, it’s important to take the time to sit down and think about what you’re hoping to achieve. Although forex is a risky game and things might not always go as planned, it’s important to be specific, so write down exactly what you want to accomplish, and a timeframe to go with it. Make sure that you define what constitutes success and failure for you, in terms of achieving your end goal. When you’re planning your timeframe, don’t forget to add in a period for finding your feet in the markets, as well as factoring in how many hours a day you’ll actually be able to devote to trading. Once you have a clear vision of exactly what you want, you can start taking steps to achieve it.

Choose an Appropriate Trading Package

The broker you choose is likely to have a number of different account packages available to you. These various options will offer a variety of tools and leverage ratios, and it’s important that you spend some time working out which one will best complement your style of trading. These accounts are likely to cater to different levels of experience, so consider how much handholding you’re really going to need before committing to a broker and package. Many, like Oanda, will offer demo accounts for you to test their facilities, so take advantage of these wherever they’re available.

you2Stick with What You Understand

One of the most common reasons for investors to lose money is their overestimation of their own abilities. If you don’t understand what you’re doing, then don’t throw money at it. Every time you consider a trade, ask yourself these simple questions: is there a solid reason for effecting it; would you be able to defend your decision if asked against critics? If the answer to either of these questions is no, then don’t do it. Be sure, too, that you never commit to a trade without fully understanding both the potential positives and the losses that may result, weighing these up, and even after doing so, feeling confident that you ought to go ahead.

Study Both Your Successes and Your Failures

No matter how experienced a trader you become, remember that there will always be room for improvement. Being analytical will be vital to making successful trading decisions, and this doesn’t just apply to your analysis of charts and price trends, but also to the strategy underlying them. When things go wrong, don’t despair, but instead work out why your methods failed. When they go right, do the same. This self-evaluation is the best way to teach yourself what does and does not work, and should be instrumental in refining your trading tactics.

Image Credit: http://www.dailyfx.com/forex_forum/active-trader-strategy-lab/65728-short-term-trading-strategies-using-market-depth.html


Alibaba.com goes public: Debuts on New York Stock Exchange

The “world’s biggest stock offering” occurred in September of 2014, when Alibaba.com went public – an event that revealed a great deal about the state of the global economy. Why should you pay close attention to this as you work toward your MBA degree online? As a future business leader, you may confront the challenges and rewards associated with the changing global landscape:


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Three Top Tips for Forex Traders

For all of the risk and uncertainty attached to trading forex, it is a science. There are formulas and rules and methodologies that can help you to understand it and, perhaps more importantly, increase your chances of getting the desired result.

Here are three of the most important to get you started…

1: Choose a Trading Style that Suits Your Goals

forex-analystThere is no use beginning a journey without a destination in mind – not in the world of forex, at least. One of the most important things to remember is that you need a goal in order to have any hope of achieving it. It is only once you have this that you can find the trading style most likely to complement it.

Start by thinking about your risk profile – how much are you prepared to lose in order to profit? Consider, too, your strengths and weaknesses, the tools you favour, the factors you’re comfortable analysing, and so on. Write these points down, if it helps, and then compare them to the different trading approaches open to you.

Does the one that you wish to choose complement your goals? If the answer is no, then either find one that does, or consider whether they’re really the right goals for you. Once you find a combination that suits your strengths, you’re already well on your way to success.

2: Choose a Broker That Suits Your Trading Style

One of the most important considerations when choosing a broker should be whether their trading platform allows you to perform the analysis you require. Your broker must meet a number of criteria, of course, such as reputability, experience and affordability, but there are many who will, so finding the one who’s the right fit for you is the most important of them all. Take the time to really research your choices before committing to anything, ensuring that you know their policies inside out and are happy with them before your final decision is made. If you have the opportunity, be sure to take advantage of demo accounts to make sure that you’re satisfied with how the platform works and how easy it is to use. If you have any doubts at all when you’re assessing them, then they’re not the broker for you.

3: Choose a Methodology and Stick With It

Before you invest any money in the world of forex, you should already have selected an appropriate methodology. You need to know prior to entering any trades how you will make the decisions needed to execute them, the information you’ll require, and how you’ll decide when it’s time to enter into and exit from them. There is no right or wrong answer when it comes to deciding; you simply need to find the method that works best for you. However, there is still one golden rule that you must not flout; always be consistent in your application.

 

Follow these rules, and you may very well find yourself on the path to forex success.


Understanding Algorithmic Trading Strategies

Algorithmic trading, like that offered by FxPro, is where specially programmed computers are used to place trades. These take place at a speed and frequency that would be impossible for a human trader to replicate. The method has many benefits for serious traders:

  • It ensures that trades are executed at the best possible price
  • Executes instant and accurate trades
  • Times trades accurately to avoid unfavourable fluctuations in price
  • Reduces transaction costs
  • Eliminates the risk of manual error
  • Removes negative emotional and psychological factors that can affect human traders.

Most commonly, this method is used in high frequency trading, which seeks to capitalise on placing a significant number of orders at an incredibly high speed across multiple markets in order to maximise profit margins.

scasdcAlgorithmic Trading Strategies

There are many different algorithmic trading strategies in existence. Some of the most common are…

Trend Following Strategies

Trend following strategies are what they say on the tin: they follow trends, whether these are in moving averages, channel breakouts, price level movements or related technical indicators. This is perhaps the simplest strategy, as the algorithm is not required to make predictions or forecasts. Rather, trades are made on the basis of desirable trends that are identified by the trading platform.

Arbitrage Opportunities

Arbitrage strategies work by simultaneously buying and selling stock from one market into a second, where it is priced more highly. This dramatically reduces the buyer’s risk, as the programme identifies an instant profit making opportunity and executes the trade immediately.

Index Fund Rebalancing

Index fund rebalancing is a little harder to understand. Basically, index funds go through periods of rebalancing, where holdings are brought in line with benchmark indices. This can offer algorithmic traders the opportunity for profit, as expected trades can offer 20-80 basis points profits according to the number of stock in the index fund prior to the rebalancing. Algorithmic systems ensure that the best prices are secured.

Mathematical Model Based Strategies

Mathematical models are complex and often require quite a lot of technical knowledge. They allow trades to be executed on a combination of options. The delta-neutral strategy is one of the most popular, and works by placing trades that offset positive and negative deltas to maintain a portfolio delta of zero.

Trading Range (Mean Reversion)

Mean reversion strategy is a little simpler to understand than the aforementioned concepts. Basically, it works on the idea that assets always have a mean value, and that they regularly revert to this. A price range is identified, and the computer places trades when the price of the asset exceeds or falls below the defined range.


Five Crucial Elements You Must Assess In A Trading Software

Investing in stocks and other financial instruments is becoming much easier by the day thanks to the rapid growth in popularity of online trading.

The shift to mobility and the growing number of trading platforms means that new traders can easily join the market within a few clicks of a button and begin trading quickly.

However, as traders rush to open online trading accounts, a few factors need to be assessed carefully when selecting a trading platform.

Ease of navigation, tools and resources

A trading platform must be easy to use and navigate across the various tools and resources without complications. This is crucial because when it comes to trading online every second counts. A slight delay in placing a trade due to complications in the trading system could be a huge hindrance to traders making maximum profits.

As an online trader, you want everything to move swiftly in order to capitalize on opportunities as they come.

Additionally, the system must have the right combination of tools and resources according to the trader’s liking, including such features as charts, news alerts and a full range of execution types.

business

Automation capabilities

With online trading, traders have the ability to trade on the go. However, some are not interested in the daily trading activity. They would rather come up with a winning investment strategy, which they can apply on automated trading.

Rule-based trading is one of the most interesting ways for traders to implement a disciplined trading philosophy. Therefore, depending on the trader’s strategy, it is crucial to evaluate the automation capabilities of the trading software before selecting their preferred choice.

Compatibility with various devices and assets available to trade

With so many smart devices now available trading software developers are making sure their platforms are compatible with as many gadgets as possible. Specifically, a trader needs to assess whether the software they are about to purchase has an app for the particular mobile gadget and application software they use.

Google’s Android and Apple’s iOS, along with Microsoft Windows Phone, are among the leading platforms that traders use in their mobile gadgets, and hence, many traders would prefer using a trading software that is available for as many gadgets and platforms as possible.

Additionally, others prefer those that have options for both web-based trading, as well as downloadable applications that they can open direct from their desktops.

Furthermore, it is vital to assess the types of assets available to trade on the trading system to see whether all the instruments you wish to trade are available. Such instruments would include currencies, commodities, stocks, and indices among others.

Commissions and spreads

Whenever it comes to investing it is always good to try to get the best deal possible. Trading commissions or spreads may appear almost insignificant to the overall portfolio. However, when these costs add up with trading activity and volume they can be painful at times.

Some brokers have leaner commissions attached on trades, while others provide discounts for frequent traders. Therefore, depending on how often you plan to trade assessing the trading software’s commission and spread policy is essential.

Stability, security and support

Finally, a good trading system has to show a great degree of stability. It can be challenging for traders if the system crashed in the middle of a trade. Furthermore, it is also good to assess the security measures taken by the developers of the trading software in the event something untoward happens.

Determine how secure your money is in case of a system crash, as well as the security of open trades among others.

In addition, it is also good to assess the trading software developer’s support services; the various communication channels available to traders, including telephone, 24/7 support, live chat, email and forums, among others.

Conclusion

The bottom line is that trading systems are crucial to speeding up trading activity. They are responsible for a significant chunk of the $5.4 trillion daily global transaction in the forex market. Currently, most brokers are introducing their own types of trading systems for traders to choose alongside the more popular ones like MT4.

Nonetheless, traders must assess the systems available on broker websites with an open mind if they are to get a true picture of each of them before choosing their preferred software.


Taking on the world with help from the US Commercial Service

If profits are dwindling month-on-month because you’re struggling to increase customer share then maybe it’s time to look to untapped overseas markets for salvation. For according to the US government, less than one percent of America’s 30 million companies export – a percentage that is significantly lower than all other developed countries. So there’s plenty of room for your company!

A favoured market for US exporters is the Middle East, and in particular the oil-rich countries which make up the GCC, the Gulf Cooperation Council. The GCC – comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – is an area well known for stable government, stellar GDP growth rates, innovative banking and millions of high-spending expats and nationals eager to snap up American goods.

Why export?

There are a string of solid reasons why any business, struggling or otherwise, should seriously consider exporting. According to the US government, they are:

Access. Today, improvements in trade finance, the Internet, and trade agreements have dramatically increased access to markets worldwide.

Demand. More than 70 percent of the world’s purchasing power is located outside of the United States. Your competitors are increasing their global market share, and you can too.

Profitability. Exporting can be profitable for businesses of all sizes. On average, sales grow faster, more jobs are created, and employees earn more than in non-exporting firms.

Competitive Advantage. The United States is known throughout the world for high quality, innovative goods and services, customer service, and sound business practices.

Risk Mitigation. Most companies that export have an easier time riding out fluctuations in the US economy and are more likely to stay in business.

One-stop shop

The US Commercial Service is literally a one-stop shop when it comes to help with exporting. It’s just waiting for you to get in touch. Many smaller businesses are so busy running their day-to-day operations that they don’t consider their export potential. And often companies think exporting is too burdensome, or are not aware of the export and financing services offered by the US government.

When companies first begin looking overseas, the challenges posed by operating within international markets often appear daunting, if not impossible. But that’s when the US Commercial Service comes into its own.

Global network

The US Commercial Service says, “Every year, the US Commercial Service helps thousands of US companies navigate those challenges to export goods and services worth billions of dollars. Located in 108 cities across the United States and US Embassies and Consulates in more than 70 countries, its global network of trade professionals opens doors that no one else can.

There you have it, all the help you could ever possibly need to succeed overseas. As a final thought, small and medium-sized companies account for some 98 percent of US exporters. So why don’t you join them? Check out the US Commercial Service here.


How to Invest With Less Stress

When it comes to managing investments, retail investors have more options at their fingertips than ever witnessed in human history. The internet has increased accessibility while decreasing the barriers to participation that once existed. For instance, trading in foreign exchange used to be exclusively the tools of multi-national corporations, banks, and financial firms. With the introduction of online brokerage and leverage, these instruments became readily available to the retail investing public for trading. This wave of opportunity has also created a more competitive environment amongst financial services providers which has driven down the costs for investors, namely for spreads and commissions. However, with the spread of technology and financial market accessibility, came certain risks for investors that did not conduct proper due diligence. These pitfalls include unregulated brokers, promises of profits, and advice from non-advisory entities.

An Industry Built on Evolution

Despite all the problems assoForex Trading Systemciated with the industry, there have been a multitude of positive developments. One suchevolution to come from these vast changes in the financial market structure is the proliferation of money management solutions that were once only available to sophisticated investors with millions of dollars in capital. Successful money managers have recognized the potential for unlocking vast sums of money from retail investors whom were previously untapped. This has caused the popularity of managed forex accounts to soar, with many options out there for investors who want to take a more hands off approach to fund management. While there is no such thing as a risk-free approach to investing (no matter what anyone tries to convince you of), this is one mechanism that is effective for diversifying a portfolio and picking a strategy that matches the risk-reward profile of an investor.

Depending on the services provider, the benefits can be numerous. Besides the obvious benefit of not having to micromanage trades all day, there is transparency to track performance in real-time and ability to pick strategies that matches investing goals. Traders operating proper managed forex accounts, aside from being licensed by the proper regulatory authorities, will also be able to provide an audited performance history to confirm accuracy of results. Good providers will not just highlight profits, but also not be afraid to offer more in depth statistics like drawdowns. Aside from performing proper due diligence on the trader, it is important to make sure the trader is utilizing a regulated broker with a solid reputation. Assuring safety and security of funds will add to the confidence of choosing a professional money manager.

Pick the Right Strategy

A successful investor understands the difference between needs and wants. In an industry that is dominated by promises of high rewards, it is imperative to look through the sales pitch and create achievable goals. Promises of get-rich quick opportunities should be met with caution. If it seems too good to be true, it probably is. Some providers offer 1000% returns to bring clients in the door only to later squander all the trading funds. While 1000% annual returns are possible, they are not very feasible, and typically require risking the entire value of an account. The search should instead focus on fund managers that are providing reasonable rates of return by taking a reasonable level of risk.

Finding the right strategy for a portfolio is paramount to picking the right managed forex accounts. For instance, in the case of a retiree, the strategy is typically more risk-averse and geared towards generating income, not capital appreciation. On the other hand, a younger investor that is not dependent on investment income could choose to focus on more high risk strategies that provide higher returns but also have substantially more risk. One suggestion is to pursue strategies that are not correlated to major market benchmarks like the S&P 500 or FTSE 100. Buy and hold strategies are typically the main retail investor tactics, meaning that performance is linked closely to broader market performance. Choosing uncorrelated strategies is beneficial because it means that in market downturns, positive investment performance is still possible.

In all, managed forex accounts provide a great means to diversify and complement existing investments. They provide a solution for investors seeking less investment risk and stress from the day-to-day management of trading accounts. While there can be pitfalls, proper due diligence and reasonable performance expectations can make this approach very beneficial for retail clients looking to have funds professionally managed.


How to Invest Safely in Penny Stocks

android_apps_for_stock_investmentsThe Over-the-Counter Bulletin Board, or OTCBB, was originally designed as a launching pad for junior companies, but sadly enough, many will never make it to the big boards. While there are quite a few shining stars that rise through the OTCBB ranks and eventually find their way onto the NYSE, NASDAQ, or another large exchange, many run out of money and disappear long before they finally get their books into the black.

Despite this, penny stock trading volume has seen a remarkable rise in recent years, skyrocketing from a meager three billion shares in 1993 to a whopping 650 billion shares in 2006. While many small-cap stocks are unable to boast about achieving profits and revenues, there are certain things traders can do to spot small company penny stocks with the highest chances of survival. Keep reading as we uncover some time-tested ways to invest safely in the dynamic penny stock marketplace.

The Initial Screening Process

It’s one thing to know what to look for, but it’s another discovering the right tools that can help you navigate through over 3,000 OTCBB stocks. With a trusted stock screener in place, here are some conditions to look for when scanning the diverse penny stock universe in search of the right one:

  • Due to the fact that most people trade penny stocks in order to benefit from huge price gains, it may be best to focus your attention on stocks priced under $2, allowing you to gain the most from its hopefully positive market movements. The average share price for an OTCCB stock is $.10, so doing so will automatically get rid of companies with less room for growth and keep the diamonds in the rough just waiting to be discovered.
  • Every trader knows the importance of liquidity for entering and exiting trades, so it’s important to look for stocks with a minimum average trading volume of 100,000 shares.
  • Aim your eyes at stocks that are currently reaching higher highs and lows. For instance, you may want to be on the lookout for stocks whose five-day SMA is greater than its 10-day, suggesting a current uptrend.
  • Obviously, it’s important to avoid stocks that are hemorrhaging cash, so try to exclude penny stocks with negative earnings growth rates and earnings per share.

While screening for stocks that match these criteria will set you on a profitable path, you should perform your stock search over an extended period of time in order to avoid one-hit wonders or companies enjoying a temporary swing. A five-day period should be just fine and allow you to scan for possible candidates without taking too long and suffering from analysis paralysis. The stocks that come up in your screening more often than the others should be the ones on your short list.

Choosing a Winner

After passing the above stock screening criteria, each potential pick should also pass news, short interests, and technical tests.

In order to even be considered amongst your potential candidates, a penny stock should have a strong chart pattern, signaling an uptrend and increasingly higher support and resistance levels.

In addition to passing your technical analysis, a stock should also have a short interest under five percent. However, on some occasions, a high short interest occurs prior to a short squeeze, which usually drives the price up higher.

Even the best technical traders pay attention to the news, so needless to say, it’s important to check recent news about a potential penny stock pick. Typically, the more positive the news, the higher the company’s share price will go and vice versa.

If it passes all three tests and seems like a winner in your gut, you may have found your diamond in the rough, so get ready to ride the uptrend all the way to the bank!


Get Complete Information On Day Trading

Sellers and buyers participating in day trading are known as day traders. In normal practice, traders close the trading positions by end of same trading day. In case the trading depends entirely on the strategy for specific day. You will find traders who actually focus on short term trading. They will finish their trades in matter of minutes or few seconds.

What do you mean by day trading?

imagesDay trading is known to be a process where buyers and sellers get involved in financial market. You need to participate in different types of short term trading that includes stock option trading, currency day trading, stock trading etc. The traders have the option of buying and selling trades several times and it can consist of high volumes. They are quite popular among brokers who can certainly reward them along with big discounts on commission.

You can get involved in process of buying and selling financial tools that includes bonds and stocks. Day trading system makes use of the earning guidance which is known to be a source for signals. The investor takes initiative to decide on the stock where you can invest to make profit. Through day trading system it is possible to move your stock only 20% of the time. But, it is quite difficult to say about the movement of security in case of the trading system.

But, how can you make a good start with day trading?

  • Need to make right mindset: This is an important part of trading. But, before participating in trading process, you need to keep in mind that there is a possibility of experiencing loss in forex trading market. If you are having a bad trade, then just release it from mind and finally move on to next. This will help you win in process in spite of experiencing losses in last five trades.
  • Need knowledge on trading: before entering into market, you need to have sufficient knowledge that can finally be implemented in process. There are lots of resources that you can find online which can act as a beneficial tool. You can also listen to audio to gain knowledge that will help you grasp the trading process. If you are serious about trading and want to evolve as experienced traders, then you need to have good information about foreign exchange market.
  • Decide on the strategy for trading: You will come across with varieties of ways through which you can certainly trade the stock market. There are different ways to make money and you should decide which fits best from traders. You can get involved in short-term trading and it involves quick trades that is designed to make sure you gain profits.

Day trading has the facility of holding stock for a single day. Once the stock market gets closed, the traders will have no stock in hands. Swing trading will help you hold the stock for few days and so as traders you have opportunity to wait for best price so that your stock has best value.

Emma Gibson is a talented writer. She takes the advantage of writing about forex market which can help you gain profits through stocks.


Why You Should Know These Basics Before Trading In Stocks

Why You Should Know These Basics Before Trading In Stocks

Are you interested in trading stocks? If so this is the article written just for you. Many people have made the decision to trade in stocks, as it is a fun way to produce massive profits without a lot of effort or time involved with the process. However, it is only those who are knowledgeable in stocks and all things related that produce those types of profits. There are many things that you should know before you start trading in stocks, including the following basics:

What does Trade mean?

Trading stocks means that you are buying or selling stock. More than one billion stock market trades are made on a daily basis. Trades can be made on the exchange floor as well as by electronically means. The most common trading market is NASDAQ, but there are several others as well.

What is the Exchange Floor?

The exchange floor, or the NYSE, is the most common of exchange floors. Once you tell your broker how many shares you want to buy, an order is sent to the floor clerk who then finds a floor trader to help find someone find you those desired shares. A price is negotiated and the deal goes through once the broker calls you back. This is a simple trade.

What is an Electronic Exchange?

An electronic exchange is one that is performed via electronic means. Computers are used to find buyers and sellers and there is no human contract with another person required. You can buy and sell stocks from any location, at any time of the day, with instant confirmations. It is one of the easiest ways to trade stocks.

Do you need a Stock Broker?

A stock broker is someone that you will always need. although you can handle stocks on your own, or use a company, a stock broker has the knowledge, experience and dedication that will make all of your transactions much easier. Always consider hiring a stock broker, especially with larger trading shares going on.

What type of Trading do you want to do?

There are several different trading styles that you can do. This includes day trading, short-term trading, weekly traders and more. You can change your mind later if you determine that it is not suitable for you, but you want a clear idea of the various types of trading and how to choose the one that you like the most.

Use Low Risk Trading methods

There is always some risk involved with the stock market and trades that are being made, however, some of them are riskier than others, and it is important that you identify and use the most low risk methods that are out there, especially when you are just starting out in trading.

Trading Stocks is Right For You

If you want a good return on your investment, using these tips can certainly help you attain great things in the stock market. When you do not understand the stock market and how things work you can make many bad decisions that end up costing you greatly. There is risk, yes, but when you go in with a clear head and the knowledge that basic stock trading requires, you can get more bang for your buck.4

Know When it is Time to sell

Sometimes you need to sell stocks because there is going to be a big decline in their value or for other reasons. It is essential that you let go of those stocks quickly. Thus you should know when it is time to sell and act upon that as soon as possible.

This article is contributed by Ajit Panchal who is an independent financial consultant working in Delhi. He likes to write about investment tips.


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