Trading

Things You Should Know About Forex Trading

Forex account Both veteran and novice traders of the stock market find that trading in foreign currency exchange, commonly referred to as Forex, is really attractive. The basic difference between stock market and Forex market is that one can trade in the latter market at any time of the day as it remains open 24×7. And this is what allures new traders; they can maintain their regular job while practicing trading.

If you’re interested in Forex trading, you should know basic things related to it before you kick in and here they are.

  • Capital – This is perhaps the most important and imperative requirement for trading in the Forex market. Unless you have adequate amount of capital to invest and make the trades, you can’t expect significant profit. You should have enough money to trade currencies, i.e., to buy and sell currencies. The amount, however, depends on your personal ability and your chosen type of Forex account. In the U.S., the traders are allowed to make purchase of up to 50 times of the amount of money they have cash in their trading account. And this is what referred to as leverage in the trading industry. For example, if you want to make a purchase of 100,000 dollar worth of your currency, you just need to keep 2,000 dollar in your account. Some brokerage firms offer the facility of ‘micro’ accounts in which you can keep as little as only 50 dollar and buy 2,500 dollar of currency.
  • Trading platform – You can’t place a trade or a bid without electronic access to your broker. So you must have a PC or laptop with Internet connection. The entire industry is operated electronically and almost all brokerage firms are specialized in creating their own software to execute trading orders placed by the customers. You may try different programs offered by different brokerage company for free of cost by simply opening an online demo account. They would help you know the major features of their trading software and help you find an interface which suits you the best.
  • Trading price charts – Like other traders, you can also rely on the price charts while making any trading decision. The Forex industry is highly chart-driven as the fundamental and economic data are not so easy to access and to understand especially when it comes to trading currencies. However, it doesn’t happen with stock trading. Companies issue quarterly income reports on the health of the business and this has major impact on stock prices. A similar means of updated information on any particular currency is not available and thus the Forex traders depend on the charts to find clues on potential value of the currency. Therefore, accessing the charts is the fundamental requirement of Forex trading.
  • Considerations – Many individuals who have opened a Forex account recently have a notion that if they have the right instruments and money in pocket, then they can easily trade in Forex market and make significant profit. However, in reality, the market is extremely volatile and because of high leverage facility, it is considered as one of the riskiest trading platform. So, being a new trader, you must spend some time on practicing the strategies with very little to no money involved. Major brokerage firms of the country provide the new customers with the facility of simulation accounts so that they can trade with virtual money. You should take advantage of it to practice and enhance your trading skill beforehand, and start trading just like an efficient Forex trader.

Discussed above are some of the very important factors that you must take care of while trading in the Forex.


World Map of Trading

Trading Map

This is an infographic to describe world forex trading activity. It shows the top 15 traded currency pairs, volumes and buy and sell percentage rates. This is designed to aid new traders in getting a general overview of the forex market, which should allow them to make better use of their trading platform and maximise their potential. This infographic has been provided by Vantage FX UK who are an FX trading brokers based in London UK. Through them you can open a demo account to practice forex trading so you can acquire new skills and knowledge about forex which should give you a greater insight into the world of forex trading and may lead to you opening a live account with them so you can start trading almost immediately. If your looking for best binary brokers check them out today if you’re interested in opening an account or if you’re just looking for some trading education and tips.

Vantage FX UK are a leading forex trading brokers based in the UK in the city of London. They provide both Live and Demo accounts to forex traders, both new and experienced, as well as giving trading educational tips and advice for forex traders and brokers.


What are the Best Electronic Trading Platforms?

Know tradingIn today’s hectic financial climate, investors from all different markets are looking at the best electronic trading platforms out there in order to gain a competitive advantage. Electronic trading platforms are computer systems which allow traders to digitally perform trades without the need for human intervention in the process. Each brokerage offers their own trading platform, and in some instance, a single brokerage will offer users many different platform options.

The problem most investors run into when searching for the best electronic trading platforms is the sheer number of them available. We have weeded through the large number of online trading sites and have narrowed it down to a few of the best choices for the trading of stocks, options, futures and Forex.

TD Ameritrade’s Thinkorswim

Thinkorswim, by TD Ameritrade, is one of the internet’s most advanced electronic trading platforms. By providing you with a seemingly endless supply of financial data and analytics, this platform allows you to make researched, sound decisions across a number of different markets. With low commissions and good service, Thinkorswim has just one drawback – it is so complex and full of data that it can take some time to learn to accurately use all of the options. Once you gain mastery over the platform though, Thinkorswim becomes one of the most powerful tools that you will find

eToro

In the Forex world, one of the most prominent players is eToro. Registered out of Cyprus, eToro is oftentimes considered to be tailored towards the new to intermediate Forex investor. This company offers investors three different platforms, their WebTrader, OpenBook and the Mobile Trading Platform. The OpenBook platform is a unique concept which allows traders to follow other traders and see their trades, thus actively integrating social networking into the financial market.  By doing careful research, investors are able to find other traders with a great financial track record and study their actions in order to develop their own trading strategies.

Charles Schwab

As one of the leading players in the trading of stocks, futures and binary options,Charles Schwab offers an ideal haven for investors of all shapes and sizes. With stock trades running $9 – $13, depending on your volume, and options costing $9 + $0.75 per contract, Charles Schwab offers an affordable option with high quality service and financial information. The electronic trading platform from Charles Schwab allows you to trade numerous different financial markets and receive information, training and support 24/7.

Scottrade’s Trading Platform

For newer investors looking for their first electronic trading platform, Scottrade is often the ideal choice. The company currently offers a few different platforms, such as Scottrade, Scottrader, and also Scottrade Elite. Each platform offers more and more data and analytical tools than its predecessor. Scottrade is well known for offering top-notch training and education videos perfect for investors of all levels. Nearly all trades through their platforms are $7, making them one of the most affordable electronic trading platforms in the market. There are also over 400 retail locations, so users of Scottrade’s electronic trading platforms can easily meet with an advisor in person if needed.

When choosing an electronic trading platform, no matter if you are planning to trading stocks, bonds, options or commodities, it is important to look at all of your options. Depending on your needs, there are countless different platforms out there. If you are looking for stock trading, then consider TD Americatrade, Scottrade and Charles Schwab. Forex traders would be wise to pay attention to eToro, considered by many to be the best platform in that market. No matter where you decide to trade, make sure to pay attention to details to ensure that you know exactly what you are signing up for.

Image Source : http://www.flickr.com/photos/legohound/4082378463/


What is a bond? Where Can I find the Best Rates?

Investing moneyWith the proper savings plan or with a fortunate monetary windfall, many people are ready to start out investing. Nevertheless, in the event you didn’t take any economics courses in high school or in school, you will not be familiar with the basics. Having seen the morning news for years, you’re most likely acquainted with phrases like stocks, bonds, commodities and Wall Street, however you won’t know exactly what they mean. Let’s take a better take a look at precisely what a bond is.

A bond is described as a debt security. Now, don’t let that time period confuse you, take into account it very like an I.O.U. If you put money into the bond market, what you’re doing is giving your cash to one thing, whether it’s a company, a government, a federal agency or a municipality that is known as a bond issuer. Now, what do you get in return for this act of faith? You get interest. Once you purchase the bond, you conform to obtain a particular interest rate from whoever you acquire it from, and then as soon as the bond “matures” you get often the face worth of the bond back.

The several types of bonds you’ll be able to choose from are fixed and varied.  There are additionally things like asset and mortgage backed securities bonds, bonds issued by overseas governments and plenty of other kinds.  There are a number of sites that can provide you great information on how to find the best rates with fixed rate bonds and other types.

BondsNow, bonds sound like a fairly good investment decision, it surely isn’t going to make you rich overnight.  Well that may be true but that doesn’t mean that bond investing is a bad thing. Consider investing in bonds as good lengthy-time period investment planning decision. Bonds are a unbelievable option to save for retirement. Bonds are also highly recommended to have as a part of your funding portfolio. Irrespective of how much risk you can take, it’s good to have a rock stable investment, and bonds are a good stable thing to fall back on.

Today’s bond market is assorted and there are alternatives for everybody, whether you’re just out of college or if you’re a Wall Street executive and you need an anchor to your portfolio. Investing in bonds could be a fun and educational method to begin investing, and you seemingly won’t lose your shirt in the process.  If you are looking to get into bond investing be sure to find Birmingham Midshires online.

Have you had experience with bond investing?

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The Role Of a Trading System in Forex Trading

The Role Of a Trading System in Forex Trading

Many of the new Forex traders should be having a trading plan or system. If they don’t, then their first responsibility is to develop their own trading system in order to trade Forex in an organized manner. Forex trading system or plan is a key to good trading and for those who think that it is not necessary, it is only a matter of time that the law of averages catches up with them and makes them pay for under-estimating the market and the concept of trading. Having a Forex trading system or plan is very important but the most important thing in Forex trading is sticking to it and following the rules.

Let’s assume that a trader has developed a great Forex trading system which works 70% of the time. It is on a 1H timeframe and the trader usually gets signals every day. So now what happens? He gets a signal. He either takes it or leaves it. Assuming that he takes it, and he gets a profit of say 50 pips and then closes out his position. All is well till now. Then the pair continues to move in his direction and keeps going on for 2-3 days in the same way. He is out of the trade and slowly he gets frustrated. What does he do? He tries to generate signals in his mind. He opens the chart, has a long hard look at it and tries to see things which actually do not exist.

Why would he want to do that? This is because he is out of the market and he wants to get into the action. He sees Forex traders around him making money out of the move but he is left behind. So he wants to do something to get back to it. The charts do not show signals for him to get into the action but somehow he wants to do it. So he starts seeing signals which do not exist. One of the biggest mistakes made by traders in the Forex market is to see things in charts which do not exist and make trades just because he wants to be in the thick of things. Signals in good trading systems should jump out of the charts and stare at you in the face. They should not be hiding inside the charts that the trader has to go in search of it. If they are like that, then either it is not a good system or it is not a good signal.

Wait for the signals to jump out from the Forex charts. This requires lots of patience. That is the key. Don’t try to generate signals and don’t try to look hard to see things which are not there.  The idea is to enjoy trading in the Forex market. As well as enjoy the times when a trader is out of the market and wait for the right signal. Signals, if they arise, would be good and bright enough for any trader to see even when they are half asleep. They need not put their reading glasses on to see where the signals are. They will come to him eventually. It might take hours or even days but they will come. The trader needs to make sure that he takes them when they come and only when they come.

So getting a good system for Forex trading is only part of the job. The biggest and most important thing is sticking to the trading system at all times and at all costs. In our blog http://tradinginsingapore.com we write a lot about different trading Strategies and tips applied in Singapore Forex market.


Bond Investment: Understanding Interest Rates and Inflation

Bond Investment: Understanding Interest Rates and Inflation

Bond investments require an acute understanding of periodic interest payments, inflation fluctuations, as well as the way in which these factors affect the yield value. Owning a bond is attached to a stream of future cash repayments. These overheads act as a function of your required return, and can be affected by oscillations in market prices.

Measure your Risks

If you’re looking into prudential bond investments, corporate or private, there are two risks that you need to measure: interest rate risk and credit risk. Taking into account short-term and long-term changes, hikes in interest rates can raise your bond price. Alternatively, should you, the issuer of the bond, miss one or more of your periodic repayments; your chances of incurring a negative credit rating are pretty high. The knock-on effect is that your investors will look at that bad rating and raise your bond’s price to cover his bases.

Here are 3 bond investment insurance tools to familiarise yourself with the trade

  1. Calculation of a Bond’s Price: In order to understand how interest rates affect a bond’s price, you need to grasp the concept of yields. Yield-to-maturity calculation is a discount value that processes a bond’s cash flows and makes it equal to its price. In other words, when a bond’s yield falls, its price increases and vice-a-versa.
  2. Relative Yield: The time-period of a bond will greatly influence its yield. In most market environments, the longer the bond investment’s maturity span, the higher the yield will be. This should make sense in light of the fact that the longer it takes for you to get your hands on the cash flow, the more likely it is that the discount rate (the yield) will be set higher.
  3. Inflation Expectations: To put it in layman’s terms, inflation is a bond’s worst enemy. It eats away at the purchasing power of a bond investment’s future cash flows, leading to an increased yield curve. Inflation expectations differ depending on the period of the investment, and are either controlled by a nation’s central banks or market forces, like supply and demand.

Once you are able to determine how a change in interest rates influences a bond’s price, you’re ready to meet the market. Interest rates, bond yields and inflation expectation are correlated factors that make up a bond investment.  Knowing where your bond lies on the yield curve, as well as the dynamics that are attached to short-term and long-term time spans is the type of knowledge that will eventually turn you into a seasoned market investor – huzzah to that!

Citations:

Bella Gray is a finance blogger who is an expert in margin trading. A maestro of tips and strategies for navigating the forex market, Gray is the perfect go-to-gal for all your trading tips and solutions.


What is Municipal Bond Investing?

What is Municipal Bond Investing?

 

Municipal bonds are an investment category that has performed extremely well over the last couple years. Investors are flocking to this area and need to understand the risks and rewards of Municipal Bond investing. These securities are not for everybody and have distinct risks when compared to other investments.

What are bonds?

Bonds are fixed income investments that pay interest on the principal that is loaned to an entity. The term “fixed income” describes the return received from purchasing an investment instrument within this asset class.  The return is usually fixed over a period and the purchaser receives interest in the form of a coupon on a fixed term.  The terms for payment of these products can be daily, weekly, monthly, quarterly, semi-annual, annual or at one lump sum.    Most bonds pay interest twice a year.

What are Municipal Bonds?

Municipal bonds are specific bonds issued by state governments, local governments, and other entities in order to fund their operations and new projects. These bonds are rated by the major credit agencies. The higher the rating is, the more credit-worthy the bond. We suggest investors stick to high quality AA or higher municipal bonds.

Individual Bonds or Mutual Funds

Should an investor purchase individual bonds or municipal bond mutual funds? One of the best ways to purchase a portfolio of Muni bonds for individual investors is to purchase a municipal bond mutual fund.  These are funds that invest in a wide range of municipal bonds. Only investors capable of investing over $100,000 and savvy enough to research the bonds financial strength should purchase individual bonds.

Which municipal bond mutual fund?

There are many great mutual funds; some of the top firms include Fidelity, Legg Mason, Vanguard and T. Rowe Price.  Look for no-load, low expense, high credit quality mutual funds with a manager that has a solid track record. Short and intermediate-term funds are the best bets. We suggest investors visit Morningstar to research mutual funds and select the one that meets their requirements of performance, expenses, and portfolio quality.

Written by Norman: This municipal bond article has been brought to you by Municipal Bonds Today.

 


Top 5 Movies About Wall Street

Top 5 Movies About Wall Street

With the Occupy movement coming to the fore last year, Wall Street features prominently as a hot topic for current filmmakers. The latest slate of movies to come out tend to focus on the recent financial collapse of 2008, but with a setting so ripe for dramatic storytelling, Hollywood has explored the inner workings of Wall Street many times before. Here are the top five Wall Street movies in no particular order.

The Classic Wall Street Movie – Wall Street

Cementing its place in film history with the phrase “Greed is good”, Wall Street explores the underhanded and corrupt side of trading. Gordon Gecko as played by Michael Douglas takes a young and eager protege, Bud Fox (Charlie Sheen), under his wing and teaches him that ethics and scruples can be traded away for power as easily as stocks being traded on the floor. The temptation of fast money and easy success proves too hard to resist for a time, but when Bud’s own father is negatively impacted by the firm’s shady dealings, his perspective changes. To redeem himself he cooperates with the SEC’s investigation and is instrumental in taking down his mentor.

The Humorous Wall Street Movie – Trading Places

A successful commodities broker (Dan Ackroyd) and a homeless man (Eddie Murphy) switch places when they unwittingly become pawns in a careless bet between the owners of the brokerage firm. When the two men discover the hoax, they exact their revenge against the owners by supplying them with false insider information which leads to the loss of their fortune on a bad investment. Despite its age this movie holds up as funny and surprisingly relevant. In fact “The Eddie Murphy Rule”, which dealt with insider trading as depicted in this film, was put into effect in some of the legislation that passed in 2010 under the Dodd-Frank bill.

The Young Person’s Wall Street Movie – Boiler Room

A young college dropout (Giovanni Rabisi) goes to work at a small brokerage firm to live up to his father’s expectations for him. He spends his days in the boiler room with a group of young and cocky traders making cold calls and finds that he is adept at selling which makes him a rich man in a very short time. In order to stay wildly successful, he must execute increasingly unsavory and illegal deals which eventually leads to an FBI raid.

The Horrifying Wall Street Movie – American Psycho

In this psychological thriller, the antihero of the story is Patrick Bateman (Christian Bale) a young Wall Street banker by day and a psychopathic monster at night. His materialism, narcissism and greed are not satiated by his work, so he takes out his frustrations with violent sprees of mayhem and murder. Though the subject matter is dark, there are comic moments scattered throughout making the film truly unsettling.

The Most Realistic Wall Street Movie – Margin Call

Though loosely based on events that transpired at Lehmen Brothers leading up to the financial crisis of 2008, this movie is a dramatization of the 24 hour period after executives at a fictional investment bank discover that risky mortgage-backed securities are going to destroy the firm. As the situation runs up the chain of command, the decision is made to dump all the risky inventory regardless of impact to the investors or economy at large. The psychology of Wall Street gets summed up with the CEO (Jeremy Irons)rationalizing the reckless strategy that leads to market crashes as merely a part of the normal cycle of gains and losses.

Aaron Fisher is a corporate accountant and guest author at Best Finance Schools, a site with guides and information to help prospective students review the top finance schools online.

You can easily buy all five of these films, as well as a plethora of other Wall Street themed movies, through online stores. Though some may claim that the digital medium is becoming popular, there are still some undoubtable benefits to owning a DVD. First and foremost, buyers don’t have to worry about their movie getting accidentally deleted. This format is also easier to carry around, meaning you don’t have to mess with any dongles or external hard drives if you want to bring any of the aforementioned films to a friend’s house.

cc licensedFlickr photo shared by Poster Boy NYC


Top 6 ways to Survive a Volatile Stock Market

Top 6 ways to Survive a Volatile Stock Market

Do you have any plan on how to survive at the time when there is any difficulties in stock market. If it is your profession to deal with stock then you may face lots of uncertainties in your professional life. Sometimes the most reliable source on which we usually depend to get the proper information or forecast related to stock market, mislead or confuse us. One source forecasts that something disastrous is going to happen to the market while other sings the tune of opportunity. Therefore you always need to have a backup plan which will help you to survive in the uncertain stock market.

There are many who while facing difficulties in market try to survive by purchasing more shares which gets cheaper at that time. But this idea, though quite successful has become out of date these days. But now as we have grown up our income has also become limited thanks to all the personal and family and social responsibilities we have to manage. Though we invest our money in different fields but we continuously go through the tug o war within us.

Following are some tips which will be able to help you to survive in the volatile stock market:

Think positive

Your financial condition will not be affected much if you plan to focus on your future. You, as an expert  can only guess that if anything drastic happens to the economy  the stock market will show the symptoms in advance and you will get time to manage your finance. If you have a small or large business, it will not affect your potential of income. Credit card processing for small businesses are always on the safer side because you add importance to preserving Capital. If the stock market trend is having difficulties, opting for cash is the best option.

Understand the factors upset the market

You should observe the market thoroughly. A simple technical break in the movement of the market or a shift in the direction of the market can alert you to rewind the entire economic indicators. A number of experts will come up with different ideas which might confuse you but you can surf through the analysis and the news to get an idea of the overall economical condition. This information will at least help you to update yourself with latest market condition and you can be prepare for the worse in advance.

Wait for the opportunity to buy to improve equity position

If you are thinking of getting into equities then it is suggested that you should wait for the opportunity to purchase at the time when market weakens and utilize the opportunity of a developing market rectification.

Sell and ease your situation

You have the option to go ease with the investments which bear the more risk of losing money. Therefore you should step forward quite carefully only after understanding the latest condition of the national as well as world economical situation. You can avoid the risk by transferring your single stock investments into more expanded positions, for example, index funds.

Just sit doing nothing

It is a privilege which you can avail while the market starts getting unraveled. This is the time when you can analyze the entire financial situation and reevaluate the way you can capitalize the situation in the ground of finance and investments.

It completely depends on your targets whether you need any change or edit in your portfolio. But initially you need a review of your portfolio to check whether you have sufficient funds to make any additional investments. If we direct our fears into some fruitful actions then it will also be helpful for our economy to head towards the right path.


Buying Stocks Without A Broker

Buying Stocks Without A Broker

There are many people who are interested in investing in stocks but step back due to the high brokerage costs. Compared to opening a simple savings account the brokerage fees can seem unreasonable.

Though hard to believe, some of the most profitable stocks of America can be purchased without opening a brokerage account at all. This helps you keep more of your hard-earned money for yourself. 

Buying Stocks without Using a Brokerage

Once the companies list themselves on the stock exchange; they employ the services of a transfer agent. This agent handles all the administration work related to the share transactions. Most of the registered companies use Computershare for getting these details. One of the services provided by Computershare is direct purchasing of stock for those companies who are interested in selling them directly instead of hiring a broker service.

Direct stock purchase means buying stocks of a certain company through a transfer agent instead of a broker. This means you save the money you would’ve spent on the middle man.

Unfortunately, the downside is not all companies listed on the stock exchange like to sell their stock directly.

Features of Direct Stock Purchase Plans

  • The minimum investment amounts range from $25 to $2500 and this amount can be adjusted to suit your needs.
  • Payment can be made either through automatic bank debit or through a check.
  • The purchase of stocks can be scheduled for a weekly or a monthly purchase. This allows one to reduce potential risk.
  • Option to invest in small amounts rather than number of shares is possible. If the amount invested is less than the share amount then, fractional shares can be purchased.
  • The dividends received can be reinvested.
  • If the company pays the fee, the plans can be cost effective.

The fee that is charged for:

·         The account setting cost is $5 to $20.

·         The transaction fee for every share purchased if $0.03 to $010.

·         For reinvesting the dividends, a transaction fee of $ 15 to $20 is charged.

·         For selling the shares, a transaction fee of $25 to and an additional $0.12 per share is charged.

·         But, there are also a few companies that do not charge any fee for purchasing the stock and some do not even take a dividend and reinvestment fee either.

Companies with Direct Stock Purchase Plans

Below are five companies that have direct stock purchase options:

The Coca-Cola Company. If you are investing for the first time then, you can either invest $500 as a one-time investment or you can invest $50 for 10 separate purchases. Once the account is set, $10 is deducted as an initial investment fee and $ 0.03 is taken as a processing fee for every share purchased. The total stock purchase is limited to $250,000 per year. If you are reinvesting the dividends, 5% charge is incurred.

Exxon Mobil. A minimum one-time investment of $250 is needed. Alternatively an ongoing $50 can be invested for five consecutive payments. There is no fee charged for reinvestment or investment of dividends. The limit is $250,000 per year for stock purchase.

Johnson & Johnson. This is considered as a most popular plan. Only $25 is required to start purchasing stocks here. There is no account set-up fee or processing fee. Dividends can also be reinvested at no cost. Maximum purchase is limited to $50,000 every year. If you have very little money then this is the best plan for you.

Walmart. Here, a minimum amount of $250 is required or one can also invest in 10 ongoing automatic payments of $25. The set-up fee is $20 which is high compared to other plans, and the share processing fee is$0.05 which is above average. But, there is no reinvestment fee for the dividends. The purchase is limited to $150,000 per year.

Altria Group. A minimum of $500 which is a one-time payment is required or an ongoing automatic investment of $50 – of which there should be at least five consecutive purchases – is needed. The cost for the Initial setup cost is $10, and share purchase processing fee of $0.03 per share. Dividends can be reinvested and 5% of the amount invested, limited to $3 is the charges for that. The maximum purchase can be $250,000 per year.

Final Word

Whenever you chose to buy stocks or any other form of investment the most important thing is to analyze the company carefully. Investments should always be aligned with the rick and tolerance levels. Investing in direct stocks is always more profitable than going through a stockbroker.

Finally, as the old saying goes “never put all your eggs in the same basket”. Investments should always be diverse so don’t put all your cash in one company.

Post by James from BrokerReview.org – if you do decide to trade stocks through a broker check out Scottrade or OptionsXpress.


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