Year: 2019

High-frequency Trading Algorithms Characteristics

High-frequency trading algorithms or algos are rigidly secured by their owners.

By Guy Avtalyon

High-frequency trading algorithms can be amazingly easy to use. And beneficial too. Where is the catch?

By their nature, because they are so fast, those algos know the future price, they don’t even have an attempt to predict them. The slower shareholders need to predict prices, algos don’t. High-frequency trading algorithms use arbitrage, traditional technical analysis, and everything that works. Their purpose is to implement and modify well-known strategies while running with their extraordinary speedy setup.

The High-frequency trading algorithms main advantage is getting price quotes earlier and placing orders faster than the bulk of other traders.

Of course, the profit may depend on the software’s latency. Or it can be some lag between the price quote and following order execution. Latency is the most important part of an HFT algorithm.

High-frequency traders can optimize latency in two ways: if you minimize the time to reach the exchange or if you maximize the speed of your trading system.

Traders use algorithms for trading to reach higher performance to markets.

Algorithmic trading is like traditional trading.

You want to buy or sell the security. The whole process is based on the predefined collection of rules examined on past data.

That means every HFT algorithm use indicators, charts, technical analysis, etc.

HFT firms decrease latency by fastening direct market access.

As an HFT trader, you can get data from the market nonstop, and without third-party. The direct market access gives you the capability to enter market orders straight into the market’s order book. This is an important feature of a low latency trading platform.

That guarantees that you will receive data before then other traders that are not using direct market access. So, you will be able to participate in the marketplace before the competitors.

HFT methods gain an advantage via ultra-low latency

It is possible through the establishment of two important inputs:

Automated trading algorithms

It is known as “black box” trading systems. Actually, it employs multiple algorithms based on various market variables. It provides a trader to get trading signals and identify a possible trading chance. That signal is traded automatically by installed trading software.

Collocated servers

These servers are given to the trader and connected to the market or exchange. They are actually placed at the exchange or market. The advantage of collocated servers is that they give you direct market access with hugely decreased latency. That’s why they are better than remote servers.

The main task of a good HFT algorithm is to reduce the time of traders’ access to the market.

The use of the HF trading algorithm altogether with collocated servers guarantees an exact and up-to-date synergy with the market. Complex algorithms identify and execute trades build on strategies. These strategies are known as order anticipation, arbitrage opportunities, momentum.

So, is it possible to compete with algorithmic trading?

Well, we have to say it isn’t. Don’t try to beat a High-Frequency trader! You will lose that match. The HFT has plentiful supplies and is be able to keep the algo running 24/7. Can you keep alert all that time? Can you be functional and reliably?

HFT includes multiple sub-disciplines.

They are quantitative techniques with short time holdings.

It is established on technical and fundamental analysis. Yes, they use traditional patterns to make trades. They are a very fast variant of what traders have done for a long time before. Also, HFT includes algorithms to prognosticate hudge buying or selling patterns. They use high-speed connections and co-located servers or in-house exchanges. And in a millisecond places trades based on those forecasts. They know what the next will happen!

The simplest algorithm is based on technological and geographic recognition.

Remember, the length of the optical connections is very important. The HFT algorithms can evaluate the order attributes, and discover if it is an indicator that related orders will go to other markets.

And what will happen? The High-frequency trading algorithms will place the order to buy at the offer price at the other exchanges.

High-frequency trading algorithms will always take advantage of the speed of execution.

HFT knows how to force the price to a higher level. It will buy all the stocks first and push the price to grow. And?

So, if some trader places the order with the limit order on that or higher price the algo will be the winner. It will use the spread.
Because of its dominance in the rapidity of execution.on technical and fundamental analysis. Yes, they use traditional patterns to make trades. They are a very fast variant of what traders have done for a long time before. Also, HFT includes algorithms to prognosticate hudge buying or selling patterns. They use high-speed connections and co-located servers or in-house exchanges. And in a millisecond places trades based on those forecasts. They know what the next will happen!

The simplest algorithm is based on technological and geographic recognition.

Remember, the length of the optical connections is very important. The HFT algorithms can evaluate the order attributes, and discover if it is an indicator that related orders will go to other markets.

And what will happen? The High-frequency trading algorithms will place the order to buy at the offer price at the other exchanges.

HFT algorithm will always take advantage of the speed of execution.

HFT knows how to force the price to a higher level. It will buy all the stocks first and push the price to grow. And?

So, if some trader places the order with the limit order on that or higher price the algo will be the winner. It will use the spread.
Because of its dominance in the rapidity of execution.

17th April 2019
Order Flow Trading

3 min read

Order flow or transaction flow

Order flow trading is more of a mindset. We cannot say it is a trading system or trading method. It is all about how some traders are viewing and imagining the market place.

Say in this way, the orders are moving price.

So, the intent of an order flow trader is to identify patterns on which they are getting triggered.

It is also called a transaction flow.

Order flow happens when a trader believes the price of an asset will move and then the trader chooses to execute the order.

Also, order flow trading is an expression that generates a lot of mess.

Some traders believe that such trade is based on very secret information from the banks. That just a small group of people have knowledge about it.

But you can see that some of them believe that it is another kind of price performance.

To determine order flow trading you have to clarify what kind of trading you want to execute.

Many of the retail forex traders are trying to place directional bets.

That is when the trader is going long or short, speculating that prices will go up or falling.

For example, if a trader believes a currency pair will move up, he/she will set a buy order. But if such a trader prediction is a currency pair will go down, he/she will go short, meaning the trader will sell. This is directional trading.

It is one of the most traditional styles of trading.

If you choose directional trading, you may decide to be a dynamic trader. You want, for example, to execute a market order and pay the spread. That is one possible choice.

The other alternative is to set a limit order or stop order marking the order flow to be executed at a specific price or executed after the market hits a specific price.

This is different sorts of order flow.

Order flow trading is alike to price action trading

The trader who executes a market order is achieving a more dynamic order. Such doesn’t like to wait for a limit order.

It is questionable if that order will or will not be filled.

But the trader who set a limit order or stop-loss order is creating a more inactive kind of order flow. Even if the orders are not executed, they are helpful in building the order flow.

Order flow trading is alike to price action trading.

They both intend analyzing the market in a specific style.

Price action traders try to conclude which direction the market going to move in. Order flow traders think they can foretell the same thing but based on capturing the actions the other traders done in the market.

Order flow trading, so how does it work?

The basic idea lays behind that if you are able to recognize when and where traders are going to make decisions, you can presume what is the future course of the market. The main purpose is to determine when the prices are moving up or down.

To be more clear, one trade will never cause such movement.

But thousands of orders appearing at the same time can generate the price’s turn.

And we can say that the main intent of order flow traders is to find how other traders trade. On that way, such a trader can recognize when numerous orders will appear to the market, large enough to generate a price movement, either up or down.
All the trader needs to know is what is the basic goal of their trading method. Based on that knowledge, he/she can predict on which position they will make a decision which will place orders into the market.

The basics of order flow trading

Two types of order flow trading

There are two main types of orders that traders can execute in the market.

Each of them is executed for different reasons. Hence, have different influences on the market price after execution.

The traders can place market orders or limit orders.

One group will place a market order because they want to earn money as quickly as it is possible.

They place a market order to open their trade because they don’t want to miss such a great chance. This is so-called reactive strategies. Meaning, the traders are reacting on what is happening in the market at this moment.

When a trader places a limit order, that means that trader wants to have a trade at a price which he expects will be reached in the market.

Stop losses are also limit orders because they provide trader to buy or sell at a price which has to be reached in the future.
Both affect the market price but in different ways.

A market order spends some of the liquidity in the market. On the other side, the limit order is placed to add liquidity to the market.

And, here we are!

The keyword for order flow trading is liquidity.

Liquidity explains how accessible is it to buy or sell in the market.

When it is easy to sell or buy, the market is liquid.

For example, the forex market is one of the most liquid financial markets in the world.

Buying or selling on the forex market is so easy because you will always find who is going to sell to you or to buy from you.
Why is this so important for order flow trading?

When low liquidity occurs that means that most of the orders on the market are buy orders. The traders can’t achieve buy trades placed because there are not enough people in the market ready to sell.

There have to be a big amount of sell orders placing the market in order for the market to be liquid.

It is really important to learn that when low liquidity is approaching the end, it means the traders have made the decision in the market.

But which decision?

That depends on which course the low liquidity movement happened. If it was a drop-down then the traders have placed buy trades or carried profits off sell trades which have previously been placed.

If it was an up-move, traders placed sell trades or took profits off buy trades.

Price does not move because of some mysterious technical indicator. Nor moving average will move the price.

For the price to move, traders need to execute enough orders to utilize the liquidity at the best bid/offer.

If there are no orders to be executed, the price will not move.

This is the cruel truth in trading.

The market will never move to your direction if there is no order flow.

The outcome of the trade is managed by the performance of other traders. The real transaction and order flow are produced by other traders.

The bottom line

Order flow trading is not a technical analysis or fundamental analysis. They are not able to move the market.

Order flow and liquidity is the base of the market.

That’s why many traders have gained the losing tradings. Their losses happen because the technical or fundamental analysis cannot produce enough order flow to move price in your favor.

Order flow trading tries to improve the lacks in technical and fundamental analysis.

When you learn and practice enough, you will find this is the most successful approach to trade.

Don’t waste your money!

risk disclosure

16th April 2019
HFT firms that need new employees
3 min read

Numerous HFT firms are actually small companies with a small number of employees. If you want to be one of them, you will need to show a capacity to produce income bigger than your salary plus bonus share. You have to be fantastic and have unique skills.

If your knowledge is really excellent, there are no barriers to enter some HFT firm even if the firm might not be hiring right now.
Yes, you would be asked to work almost 70 hours per week when it is necessary but the salary and intellectually provocative environment will cover your engagement.

There are a few roads into HFT. Any of them you chose you MUST have a great knowledge of math, computer sciences, physics or related technical focus.

Traders Paradise wants to represent you some of the HFT firms that are looking for new workers.

Liquidnet

The position required: Liquidnet is looking for Junior Data Scientist/Quant Developer.
Skills required:
- Bachelor’s degree in Computer Science, Mathematics or similar technical field.
- 2+ years of relevant experience OR recent Masters or Ph.D. grad in Computer Science, Mathematics
- Knowledge in a mainstream programming language, such as Python, C/C++, C#, Java, JavaScript, Haskell
FIND MORE about this job HERE
Specialty: It is a world known institutional investment network which connects asset managers with liquidity.

Company Overview: Its headquarter is in New York City but has departments in San Francisco, Boston, London, Dublin, Sydney, Toronto, Hong Kong, Singapore, and Tokyo. This trading network is connecting asset managers to pools of liquidity for both equities and fixed income. Last year it was recognized as 8 out of 34 large organizations category in New York City. That means it is one of the best employers in New York City.

Salary for this position per year: $110k – $159k

Old Mission Capital

The position required: Quant Trader.
Skills required:
- Candidates must be proficient coding with one of the following languages: Python, Java, C++, VBA, R, Matlab, Ruby.
- 4-10 years of relevant trading and research experience, with a primary focus on global equities, commodities, or fixed income instruments and/or related derivatives
- Experience with systematic market-neutral strategies over a range of holding periods/forecast horizons (short, medium, and long).
FIND MORE about this job HERE
Specialty: They have high performance automated trading system that operates globally. Old Mission Capital trade equities, currencies, commodities, bonds, options, futures and other derivatives.

Company Overview: Old Mission Capital, LLC provides brokerage and trading services. That include a model for security valuation, trading algorithms, tools for risk management. Old Mission Capital was founded in 2008 and it is headquartered in Chicago, Illinois. Old Mission Capital, LLC works as a branch of Old Mission Holdings, LLC.

Salary for this position per year: $7k – $8k per month

NJF Global Holdings

The position required: Junior Quant Trader
Skills required:
- Quantitative background
- experience with a programming language Python/C++ a plus but not required
- Ability to collaborate on projects with others but also work independently when needed
FIND MORE about this job HERE
Specialty: The company provides finance, technology, legal, and financial research services.

Company Overview: NJF Global Holdings Ltd was previously recognized as NJF Search International Ltd and modified its name to NJF Global Holdings Ltd in August 2013. The company was founded in 2003 and is based in London, United Kingdom. It has offices in New York and Chicago.

Salary for this position per year: unknown

Milliman

The position required: Quantitative Analyst to work in the Portfolio Management Group in an entry-level role
Skills required:
- Strong Excel/VBA and PowerPoint skills
- coding skills, especially C# (or other Object Oriented languages) and SQL (or other database management tools)
- experience working with Bloomberg or Morningstar
FIND MORE about this job HERE
Specialty: Retirement funding and healthcare financing, risk management and regulatory compliance, data analytics and business transformation

Company Overview: Milliman Financial Risk Management LLC is a market leader in the field of portfolio management and risk management. Their focus is on trading securities and derivatives to manage capital market risks for banks, asset managers, insurance companies, and pension plans. The Portfolio Management Group, located in Chicago currently implements risk management overlay strategies on over $50 billion in assets.

Salary for this position per year: $45k – $82k

The Princeton Group

The position required: Quant Developer
Skills required:
- Advanced programming knowledge of at least 3 programming
languages, including Python
- Strong understanding of statistical and Machine-Learning methods
- experience with Tensorflow and Keras, React.js and HTML data visualization libraries
FIND MORE about this job HERE
Specialty: Technology professionals proficient in developing computing solutions and skilled in complex business activities such as trading and trading tools technology

Company Overview: Specializing in IT placement services for Startup, Fintech and Hedge Funds. IT staffing and recruiting in New York and New Jersey. Financial modeling, quantitative analysis, and development buy and hold strategies, the generation of portfolio accounting tools and report generation.

Business initiatives including risk, trade processing, trading and the development of trading instruments.

Salary for this position per year: flexible from $24 – $27 per hour

General skills to get a job at HFT firm

The positions at an HFT firm are pretty different. Almost everyone must have extremely technical experience and knowledge.
HFT is typically a technology field, so if you want to work there you must have an excellent background in programming or electronic engineering. Some of them will require deep knowledge of hardware, for example, GPU or FPGA.

Actually, every skill that can reduce the latency and improve the execution speed of algorithmic calculations will be required in HFT.

Widespread knowledge of trading exchange is a general skill for any high-frequency trader.

HFT requires large dimensions of estimates in a very short time frame. So, the advantage is to know how to increase the speed of execution.

Also, deep knowledge of hardware design such as GPU and FPGA is an advantage. A lot of HFT firms will require a background in Linux kernel modification.

Background in Linux kernel modification is beneficial to many HFT firms.

The bottom line

The top HFT firms are usually placed in New York and London. Chicago is also a large hub for HFT.

But it is very rare to find a job in those HFT firms directly. They are doing that via recruiters.

The direct application to HFT firms is possible, yes!

But the tricky element is estimating which firms are actually in HFT.

The best way is to join some recruiter.

Traders Paradise offers you several and we will continue doing that.

Stay tuned!

Don’t waste your money!

risk disclosure
15th April 2019
High – Frequency Trading (HFT) – Why to Use

The high-frequency trading algorithm or HFT provides fast and profitable trades. Learn how.

By Guy Avtalyon

The high-frequency trading algorithm or HFT is one of the two main types of algorithms. The other is the execution algorithm.
HFT trading means to engage multiple algorithms in order to examine various markets. The orders execution is based on market conditions.

It is a program trading platform that utilizes robust processors to conduct a large number of orders very fast. Actually, the whole operation takes less than one second.

And it is a very important feature for traders.

The speed of trade execution will decide if you are a profitable trader or you are not. The logic behind this is that HFT provides you a fantastic speed in trading. So, you can gain your targeted price faster than, let’s say, ancient trader, is going to do.

The advantage of high-frequency trading is that it provides you a permanent view on markets condition because it follows market data in real-time.

Is a High-frequency trading set in today’s markets?

But there are some misunderstandings yet.

HFT is very often a cause of disagreement among traders. The traditional traders don’t like algo trading at all.
Yes, we understand why is that.

HFT leads to some effects, very unknown to some market experts. Their opinion about the algo trading is the same.
First of all HFT trading provides traders more advantages in the main processes.

HFT applications can hit even a very small profit from huge numbers of executions. You must know that there are a million executions every single day in the markets all over the world.

High-frequency trading will never hold the position for a long time.

The old-fashioned traders say it can cause great volatility and results with losses when it goes wrong.

Well, their opinion is not quite mistaken.
Let’s say it is possible. And we will recall the year 2012 when really was tricky.

HFTs caused the knockdown to Knight Capital Group. After that accident, in many countries, HFT was reduced. For example, Italy has the rule to tax 0.02% on the transaction that takes less than 0.05 seconds. The rule was launched in September 2013.
The other problem with HFT is there is no generally recognized definition. So, that can open the space for some confusion.

The truth is that the digital era requires digital work for which we need digital equipment. This digital tool leads us to speed business and the trader’s business is to execute their trades fastest as it is possible. But the principle is the same as centuries before: when you are in the market, you would like to buy or to sell. And HFT provides traders to do it. Fast, very fast.
Let’s break down HFT trading.

What is high-frequency trading?

The high-frequency trading is called ”black box” trading.

It indicates to automated systems that regularly use complicated algorithms to buy and sell securities. Extremely fast!
In the same manner, the algorithms do it at a much larger range than any individual is able to do.

Previously we said that HFT provides a very small profit from huge numbers of executions, but thanks to the high speed and large volume they produce great returns to traders.

How does it work?

The algorithm follows a “quote level” that is created including bid and ask. In volatile markets, the quote level can be changed in a second. Honestly, it could happen several times in a very short frame time.

And the algorithm is going to do what? It will place your trade in the right direction and faster than you can do it by yourself.
Without the algorithm, you will not be able to recognize all the opportunities. You might miss something extremely significant.
Yes, you can tell how and when your trades should go, but even you are fast-acting on your mouse or mobile interface, it will take time.

Moreover, the algorithm will buy and sell the same stock multiple times in a brief period of time. This means the algorithm will trade several hundred times in a single day.

Yeah, here is some problem with that. Say, you are paying $1 commission. WOW! Be careful with your HF trading! But returns you can gain are bigger.

Remember, you are using artificial intelligence.

You have to know that 75% of US stock trades are placed by algorithms. This number will expand soon and it will continue.
Why we are so sure of that?

We people, humans, will never have such ability to process that volume of data, we will never have the possibility to estimate all information required to make a trade before our rivals. Sometime we will do that, but most of the time we will not. And to make a good decision we need time.

Algorithms are able to operate with a million bits of data in one millisecond, at the same time they are able to make decisions and act.

All alone! Of course, when you turn it on.

So, why to use High-frequency trading (HFT)?

High-frequency trading demands the lowest latency in order to keep a speed advantage over the retail traders. Complex algorithms are at the core of these programs. The algorithms give directions for acting to market circumstances based on highly automatic signals.

Behind these programs lays very complicated coding. Millions, even billions of lines of code. Some of the biggest HFT companies have a continual profit during 1,000 trading days without a single loss.

The speed, access, capital, and no holding time make advantages. And risk-averse and latency too. Latency is the time it takes for data to reach its endpoints. When latency is low that means higher speed.

HFT has led to tighter bid-ask spreads.

It makes transaction costs lower. The liquidity increased and pricing efficiency is raised. The main concerns about HFT are the ability to accent and stimulate market changes.

For example, there is some risk with some out-of-control algorithm. Also, there are traders who can manipulate the market because they are scammers familiar with programming. That’s why every trader who wants to employ HFT has to be very careful when downloading such apps.

Happy trading!

15th April 2019
Pinterest is Pinning for IPO

2 min read

Pinterest wants to go public

Pinterest could be going public in early 2019 probably to the end of April.

According to an article from the Wall Street Journal, Pinterest, the social media for image discovery and sharing, is almost ready for an IPO.

It has a very extensive service but still, it is a profitless company. The question arises here, can such a company provoke the investors to invest in it. Is there, in the market, the demand for companies like this?

Anyway, Pinterest is approaching to the stock market with big strides. It has set a price span for the opening public offering below private-market peg of $12 billion. That is less than any current private estimates of the company. That means Pinterest shares could be priced at between $15 and $17 when it goes public. The Pinterest stock ticker on the NYSE should be, according to their expectation, PINS.

Pinterest, in late March, published an offering to latent investors. The document showed very interesting data. This company had about $756 million in income from online advertisements in 2018. Their income growth rate in 2018 was increased, which raised for 60% year on year. The main trump card in their hands is the fact that over 256 million people and 1.5 million companies use the Pinterest platform at least once per month.

Pinterest’s price range discourages some investors because of the overflow of tech IPOs this year.

All of us can witness about Lyft struggle on the market and sharks they met there. Well, the Lyft is an unprofitable company, that’s, true. But their shares fell below the offering price after only two days trading in the market.

“People are looking at Lyft and realizing that even if the roadshow goes extremely well and there is a lot of demand, you can’t overprice the offering,” said Elliot Lutzker, corporate and securities partner at Davidoff Hutcher & Citron for the NYT.

And the main game will come soon as the Uber, the largest of these contemporaries of tech start-ups, also has plans to run public in the next few months.

Their estimated value is about $120 billion. Uber can easily be the biggest IPO by some US company.
So, it can be very tricky for both Pinterest and Lyft to manage their public appearance with Uber included as competition.

It is obvious that Pinterest is trying its show on the road. Their plan is to make the institutional investors more interested before the first day of trading and final IPO pricing.

If investors respond with high demand in the following days, Pinterest’s shares price could increase in value.
The other important fact when valuing Pinterest is that it has $628 million in cash on its balance sheet.

But there is also another count behind. The private investors

In total, private investors have put almost $1.5 billion behind Pinterest. If Pinterest’s shares go between $15 an $17 (Pinterest plans to sell 86.3 million shares at an initial offering, which is $12 billion valuations).

The company’s initial investors will still have huge earnings.

The Pinterest biggest shareholders are Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital. According to NYT, they don’t have to be worried about IPO price range: Bessemer will be good at $952 million, FirstMark Capital would deserve $710, and Andreessen Horowitz will be good at $696.

Pinterest’s IPO really may be an examination of how much it can interest investors who are seeking fast-growing companies. Would they want to buy shares of the company with just 60% of growth in one year?

Well, anyway we will see very soon if murmur can beat the quality. There is a big hype surrounding Pinterest, and other tech unicorns and decacorns this year.

Don’t waste your money!

risk disclosure

9th April 2019
Forex Trading in the Indian Market is Not Fully Legal

Indian Forex market is not fully legal

By Guy Avtalyon

Forex trading in the Indian market is legal. RBI puts a lot of restrictions on trading, but still, there are possibilities for Indian residents to participate in the Forex market.

So, we can say, it is allowed to trade Forex inside Indian Exchanges. All resident Indian or companies, banks, and other financial organizations can trade in the currency market.

But Foreign Institutional Investors and Non-Resident Indians are not allowed to trade in the currency market. So, once again if you are resident Indian, you can trade currency over Indian exchanges like NSE, BSE, or MCX-SX. The main currency pairs are USDINR, EURINR, GBPINR, and JPYINR.

The point is that you can trade with respect to those two conditions: being resident Indian and the broker you choose is in the club of the exchanges mentioned above.

In those cases, Forex trading in India is unquestionably legal.

Forex trading in India is legal and safe.

There is remarkably strong regulation established by the RBI concerning Forex trading.

The problem is that RBIs regulation allows you to trade only 4 currency pairs, USD/INR, EUR/INR, GBP/INR, and JPY/INR.
But, it is possible to trade.

Yes, you cannot open an account out of the country, you have to trade with registered Indian brokers and listed currency pairs.
So, take this suggestion! If you are resident Indian and want to neglect the laws, you can also open an account using offshore exchanges. But you are doing that at your own risk.

Converting the INR to other currencies for the purpose of trading the FX markets with abroad Forex brokers is an illegitimate project. Such action in India is strictly against the law and can bring draconian penalties and also the prison.

How to do a Forex trading as an Indian trader

This is where things are a bit tricky. If you live in the rest of the globe, trading forex is the normal and regular thing.

For example, if you are a resident of some EU country or you live in the US, you can trade any currency pair in the world. You can trade even over unregulated brokers, at your risk of course. But when you trade on Forex market that is pretty unregulated you are trading at your risk anyway.

When it occurs in India, it is quite complex.

Is Forex trading fully legal in India

The problem is that trading currencies in Forex trading in the Indian market is not fully legal.

You have only one possibility, and it is the same for the resident Indian, you can trade only the currency pairs that have INR (Indian Rupee). And you may choose among 4 currency pairs USD/INR, EUR/INR, GBP/INR, and JPY/INR.

What is the story behind this? We assume one possible scenario. The US dollar is the most popular and the most traded currency.

And INRs value in comparison with the US dollar is too low. So, if many traders would like to buy dollars, the Central Bank of India could be short. The next what the Central Bank of India could do is to buy dollars. But the price would not be the same. It could be much much higher. It is possible at worse rates and INR will continue going down.

That sounds logical.

In the same way, online trading and using online platforms are not allowed for Indian citizens. Foreign brokers can offer their services in Forex trading in the Indian market. Though, Indian traders can trade only with brokers certified by SEBI. And again, they can trade only currency pairs denominated in INR.

This the moment when we have to say that it would be smart to reconsider those limits. In such a case, Indian Forex traders could enjoy full currency trading.

As we heard and read several times, the Indian government is contemplating eliminating the restrictions in order to provide the other popular pairs to be traded. That will be nice.

Until then, if you want to trade with abroad brokers, you should be sure that they have the required licenses.

Our recommendation is to choose the approved Forex broker that has an extraordinary credit. It isn’t hard to find some, for example, TradeO.

Trading Platforms for Forex trading in the Indian market

For Indian traders, it is impossible to use online Forex platforms or software. Simply, it is illegal.

But still, not all Indian traders are citizens of India, so they can use them.

For those who can trade online from India, there are few things to consider.

Choose the broker with a user-friendly interface.

Also, it has to easy to manipulate.

The button that can close all of your positions when you want that has to be included and visible.

Further, your broker must offer you several platforms. One, for example, Metatrader 4 or Metatrader 5, that you can download and at least one to trade from your browser.

The most convenient is if you choose the broker that provides you to download the app. You can easily install it on your phone.

So, you don’t have to be stick to one place when you want to trade.

When it comes to account types, the majority of brokers will allow you to open the account with a small deposit. It can be, for example, $50-$100.

But maybe you want to trade with a much bigger amount of money. Anyway, you should contact your chosen broker and discuss the rules, and find out which type of account suits you best.

Also, you should check if your broker has a free demo account. Either you are an advanced or beginner trader. Trading on a free demo account will give you the view of how the platform works, or you can learn more before you give them your money.
Happy trading, India!

9th April 2019
Morgan Stanley Taking Lyft For A Short Ride?

3 min read

Lyft, a popular ride-hailing app, has gone public on 29th of March this year, but since then their ride was a bit bumpy. And for that, they blame the Morgan Stanley, the underwriter of IPO for their direct competitor Uber

When Lyft got listed on the market on March 28 stock was priced at $72 dollars. When next day it started trading it opened at $87.33, but quickly reached the high of $88.10 and closed at $78.29, 8.7 percent above its listed price. On Monday, April 1, it has closed at $69.01, just short of $3 dollars under the price the initial investors have paid it. Since then it has recovered and is moving above the listing price, but Lyft still has a long ride ahead.

Reports said: Morgan Stanley is trying to short Lyft

According to the report from the New York Post, based on the unnamed sources, Morgan Stanley is trying to short Lyft. Though the NY Post has a bit of a reputation, the Monday drop in stock price precedes some rather bizarre bets. Recently Lyft has sent an email to their pre-IPO investors reminding them are not allowed to commit to any transactions that might affect a holder’s economic interest in the stock. Allegedly, this and the language of the “lock-up” agreements have led investors to hedge their investments, and not trying to earn from the fall of the stock price. A “lock-up” agreement is a legally binding contract issued by the underwriters of an IPO that prohibits people close to the company, including executive and employees, from selling shares for a period of time, in the case of Lyft for 6 months.

Despite the fact that Lyft has yet to report any profits, IPO has attracted a lot of attention and actually getting oversubscribed on the second day of trading. According to the same NY Post report, Morgan Stanley has contacted one of the IPO’s underwriter in an attempt to seek help in shorting the stock. Allegedly, Morgan’s customers who have invested in the Lyft before IPO are attempting to protect their investment from price fall, contrary to the “lock-up” the agreement and the bank is offering them such product. And the report is citing an unnamed investor saying “If I can lock in $70 now, I’m going to do that”.

Do you know what the Shorting stock does mean? Find HERE

Lyft is demanding

And Lyft has decided to respond to this situation. According to reporting of CNBC, they are threatening Morgan Stanley with a lawsuit over this situation. In a letter, which CNBC had reviewed, Lyft is demanding that the bank publicly state that they are not helping early investors in short-selling the stock. But also demand that if they are selling such product to hand over a list of shareholders who are involved. While Lyft has requested a response by the end of the day on April 2, Morgan Stanley is yet to officially reply to these allegations.

However, in the statement to CNBC, a bank’s spokesperson have stated that Morgan Stanley “did not market or execute, directly or indirectly, a sale, short sale, hedge, swap or transfer of risk or value associated with Lyft stock for any Lyft shareholder identified by the company or otherwise known to us to be the subject of a Lyft lock-up agreement.”

In the reported letter Lyft and the IPO syndicate are accusing Morgan Stanley of creating a special instrument which allows pre-IPO investors to circumvent the “lock-out” agreement and short-sell the stocks. “Our firm’s activity has been in the normal course of market-making, and any suggestion that Morgan Stanley has engaged in an effort to apply ‘short pressure’ to Lyft is false,” the spokesperson for Morgan Stanley said.

The single largest transaction

According to CNBC’s report quoting an unnamed person close to Morgan Stanley operations, short-selling accounts for 1.3% of Lyft’s trading volume, with single largest transaction accounting for 425,000 shares. Also, according to this report, the Financial Industry Regulatory Authority, the self-regulatory organization of the US banking industry may have been involved in this matter.

Maybe the strangest thing in this dispute between Lyft and Morgan Stanley is the reports from market analysts, including the Citron Research one of the investors in Lyft, calling the shorting of the company an “amateur short”. Citron has published a report stating five reasons to not short Lyft, chiefly stating projection of the Goldman Sachs that ride-hailing industry will grow to $285 billion by 2030. With that in mind, Morgan Stanley has secured the underwriting deal for Uber’s IPO, the direct and much larger competitor of Lyft. And according to CNBC’s reporting Lyft has addressed the above-mentioned letter also to the bankers who are managing the Uber’s IPO, which is interesting as the short-selling products are created in a different division of the bank, separate from investment banking.

Don’t waste your money.
risk disclosure

8th April 2019
Currency Trading Guide For Beginners

3 min read

Currency trading, also foreign exchange or Forex trading, is the buying and selling of currencies. That is happening in foreign exchanges or in the foreign marketplace. The main goal is to make a profit.

Often you can find it is called ‘speculative Forex trading.’

The main difference between currency trading and other trading is the liquidity of the Forex market.

When you participate in the forex market, in essence, you have to buy one currency and sell for another at the same time.
This is called a currency pair.

Each one is interpreted by three letters. The first two letters describe the name of the country. So, the third letter interprets the name of the currency.

How can you make a currency trade?

Currency trading: Currency pair

Currency trading is regularly executed completely over brokers and market makers.

If you want to trade in the Forex market you will depend on the brokers in order to execute a trade.

The first thing you have to do is to pick a currency pair.

If you make a mistake, it could lead to a losing trade.

So, we recommend you to choose between seven major currencies. Honestly, you have to pick one of existing seven. It isn’t a big deal!

But there some problem may arise.

There are some traders who have difficulties pairing up currencies. Sorry, but we have to say that.

Some others cannot recognize which pair will perform the best.

As we said, there are 7 major currencies. And, they are most traded.

You have no other choice than to trade them in pairs.

Currency trading: 7 major currencies

The first mistake you may make is to pick your pair based on some country’s economy. Don’t do that because your profit will depend on your position while trading on particular currency pair.

That means if you are willing to be a day trader or very active trader you will probably pick 4 or even all 7 pairs.

On the other hand, if you prefer to be a long-term trader you would like to wait and see which pair perform the best. Such traders always want to catch the best opportunity and they rather wait than to hurry.

Say, you are a conservative trader.

What you have to know?

Number one, the forex market is open for currency pairs’ trading 24 hours a day. From 6 PM on Sunday in New York, to 4 PM on Friday.

Each day starts at the Sydney market open. It is 5 PM to 2 AM Eastern Standard Time. Then switches into the Asian market. Tokyo’s market is opened from 7 PM to 4 AM.

That’s not the end. When the Asian market is near to be closed, the European markets are starting their session. It starts with London’s market opening from 3 am to the midday.

The last session belongs to New York. It begins at 8 am to 5 pm.

That represents one week of forex trading session.

So, you can place your trade when and where you want. The Forex markets are opened 24/7.

What you have to take care of when trade currencies?

Currency trading: make a profit

Well, the first is its value. Currency price is changing fast and frequently. The reasons for that can be various. For example, Brexit is one of them. But sometimes, the market by its own nature will cause changes in currency prices.

The fluctuation isn’t a bad thing, but when it comes with high frequency, you might not be able to determine the changes which could cause the loss.

For example, the euro is strong. And countries from the EU would buy, let’s see, U.S. products. In order to meet payments, they have to change euros for US dollars.

So, we have the following situation.

If large amounts of euros are traded for U.S. dollars in a short time frame, it forces interest for the U.S. dollars. As a consequence, the U.S. dollars value increases. On the other side, the value of the euro related to the U.S. dollars decreases.

The risk involved in currency trading

Currency trading implies high leverage.

It is very possible with small investments to gain a big amount of cash.

Forex is not highly regulated. There are several sorts of trades not regulated at all. That can boost the risk of currency trading.
If you are the beginner in currency trading you should start on some free demo platform. There is no risk involved.

If you have a certain good result, and only IF, you should start with live currency trading.

Don’t waste your money!

risk disclosure

8th April 2019
Automated Trading – Improve Your Trade
Here are Traders-Paradise’s suggestions for the automated trading software we examined.

By Treaders-Paradise Team

Do you know how automated or algorithmic, also algo, trading can make the profit to individual investors?

OK, let’s start. We don’t want you to waste your time.

But, honestly, we are doing this to not let you waste your money.

How does it work?

What computer program is going to do?

A computer program will follow the share price. That tracking will also, add moving average indicators. Automated trade means that software will place buy and sell orders.

Don’t you think it is a great help?

The automated trade program will help you to block emotional trading. And as you already know, it is very important. Not to trade under emotions and make errors.

We, here at Traders Paradise, think it is a great opportunity to have algo that will trade in your side. Moreover, it will make a true profit for you.

Finding such an automated trading system is a life dream goal for many traders. The one that places orders and guarantees profit.

And one that demands almost no or little input from the trader.

Automated trading means the trader has to set precise requirements for entries and exits. They will be automatically launched by your computer.

The main thing is that you can set requirements in the range from very simple to extremely complex strategies. That complex strategy will require complete knowledge of programming language special for the platform you would like to use for your trades.

What is an automated trading system?

It is the method of employing computers to support a set of established directions to execute a trade.

Producing a profit is in demand and expected. Moreover, with automated trading, it is guaranteed.

Can you expect from humans the same? Of course not.

The main benefit of using automated trade is that you have to do almost nothing. Your automated system will recognize the potential for profiting even before traders who are humans, of course.

Automated trading is very popular among institutional investors, but past several years it is accepted by retail investors especially for investing in the stock.

Although, automated trading platforms are the most popular for the Forex market.

But as you are reading this, you are ready to use some automated program. Your only concern is to find the best automated trading software.

Traders Paradise has some suggestions for you.

We will try to give you a hunch about some automated trading platforms. And we think these are the best in our opinion.
- ZuluTrade
Image source: ZuluTrade website

ZuluTrade is an honored brand in the field of online trading software providers. It runs an online and mobile social and copy trading platform. ZuluTrade is one of the most popular automated trading platforms that you can find today.

ZuluTrade turns the suggestions of experienced traders and automatically executes the trade in your account. You can test it by clicking the button in our navigation bar TEST YOUR SKILLS FOR FREE!

You can choose the program or traders that are best for you.

ZuluTrade automated trading platforms allow traders to copy the trades of successful traders. Also, you can copy signals or full strategies.

This autotrading platform recommended by Traders Paradise grants you the trust to involve in trading. Especially if you are a beginner with deficient knowledge or skills.
- E*Trade
Image source: E*trade website

Power E*TRADE is an innovative platform.

Thanks to it you can improve trading and invest by uniting trading applications directly into E*TRADE.

Its automated platform is reasonably positive. They give access to streaming market data, free real-time quotes, also the market analysis. The user interface is smooth and simple to operate. For instance, using their dashboard, you can follow accounts, build a watchlist, and execute your trades.

More about E*Trade you can read HERE>>>
- Wallstreet-forex robot
Image source: WallStreet Forex Robot website

If you want a fully automated trading experience, try WallStreet Forex Robot 2.0 Evolution.

You should check the robot’s latest performance on real money accounts.

If you follow all their instructions your success is guaranteed.

The entire system is smooth-running.

You’ll enjoy the latest version of the program.

This high-grade program has a lot to offer advanced and new traders.

The program involves a Broker Spy Module.

This module is created to protect the trader from scams and unethical brokers.

The main advantage is the program works by automatically scanning for new updates and settings.

Moreover, you don’t have to worry about restarting the robot. This is a great feature.

This new program doesn’t allow the scam broker to fool the software using methods such as delayed order executions and spreads.

The software will monitor for broker movements and investments all time and can easily recognize a scammer, 24/7.

The main features of automated trading software

The risk associated with automated trading is high. It can cause large losses.

Automated trading software is created to perform real-time all market data.

It must have a connection to multiple markets.

The software should have feeds of different formats or to go with third-party data vendors and give it in the same format.

Latency must be decreased to the minimum.

In today’s vibrant trading realm, the initial price quote can be modified various times in only one second.

Automated trading offers quick and timely access and full adaptability to your needs.

But before you enter algo trading you must understand and have the full experience of trading software. The best way to do so is to test it on a free demo account.

Don’t waste your money!
7th April 2019
Indian stock market is worthy to invest
India: Taj Mahal

By Guy Avtalyon

Are you one of the rare investors who know what magnificent opportunities you can find in investing in the Indian stock market?

Or you are not?

It is a promising market. But, before investing in the Indian stock market, here’s what you should know. It is essential to focus on the stock market if you want to invest in it.

First of all, you should know that India is globally the quickest expanding economy. Measuring GDP, India takes seventh place in the world. Also, the third-largest buying power parity in the world. The growth is coming from the service industry. After the economic liberalization policies 1990s, Indians considerably improved life.

Investing is a confirmed way to produce long-term wealth. And besides, anyone can start investing.

Is the Indian stock market worthy to invest in?

In India, you have two stock markets where you can make your trades, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). You have to find the company has good nitty-gritty, an basically a strong company.

The BSE has more than 5,000 listed companies and NSE has about 1,600. Both stock markets match the same trading principles, trading hours, settlement rules.

Determining a sustainable company is easier said, than done. Anyway, we will give you short reviews of a few Indian companies with big economic moats around them.

What is MOAT?

Let’s go back to the past for a moment.

In the Middle Age, all around the castles were digging channels. Then, they would charge the channels with soil and water. That is the moat. And it was very helpful if the enemy tried to provoke or attack. Thanks to moats the castles were prepared to persist for a long time period.

The same idea of ‘MOAT’ is appropriate in the stocks.

Many companies have an unseen shield around themselves. That gives them an influence on the market. They have a brand. For example, Gillette or Colgate or Suzuki or Coca Cola. MOAT companies in India are, for example, Asian Paints or HDFC Bank. Also, MOAT companies may have a business monopoly. Such a case is with Coal India.

Indian Companies with big MOAT
- ITC: Cigarettes – ITC Ltd covers 81 % of the cigarettes selling in India
- Castrol India: Giant among automotive and industrial lubricants in India. Holds around 48% market share in the global Indian lubricant market.
- Asian Paints: It owns over 54% of the market share in the Indian paint industry.
- Jockey India: Actually, it is Page Industries, one of the biggest producers of underwear in India.
- Hindustan Unilever or HUL: Hindustan Unilever or HUL: They offer some of the popular brands, that are used by 2 billion people on a daily base. That, among others, include Cif, Dove, Lipton, Vaseline, Pepsodent, Wheel, etc.
- Pidilite Industries: It is adhesives producing company. Their brands are Fevicol, Fevikwik, Fevistick, M-Seal, etc.
- Britannia Industries: It is an Indian food corporation with Britannia and Tiger brands. Its headquarters in Kolkata, West Bengal. Among their offered brand names are biscuits VitaMarieGold, Tiger, Nutrichoice Junior, Treat, Pure Magic, Milk Bikis, Good Morning, Bourbon, Nice, Little Hearts between others. Nestle: It is a famous producer of “Maggi”, chocolates, etc
- United Spirits or USL: is an Indian alcoholic beverage company and the world’s second-largest spirits company by volume. USL exports its products to over 37 countries. It has more than 140 liquor brands such as McDowell’s, Royal Challenge, Antiquity, Vladivar, Romanov, etc.
IT and business services outsourcing is a very important part of India’s economy.

Indians are very well educated, skilled and English-speaking. Moreover, they are not expensive workers. That’s why the IT sector provided about 8% of the country’s GDP.

Business services outsourcing is a less important but more popular business in India. BPO is the express increasing part of the industry in India. So, it is valuable to consider investing in those companies.

How to invest in the Indian stock market if you are not its resident

If you are not an Indian resident the Indian stock market is a foreign market for you. But you can still invest. For example, you can buy stocks directly. Honestly, it is a bit tricky. Much more than investing in domestic stocks. But if you want to invest in some company listed on a foreign exchange you can do it over your brokerage.

If your brokerage provides that kind of service, it has to contact the market maker in India. Sincerely, you have to be prepared that the stocks you want are not accessible. That is the bad side. The simplest way is to set up an account directly in some of India’s brokerage. Almost all the notable companies in India are listed on both the markets.

Even if you are investing in the long-term, always look for a ‘moat’ in the company. It improves the profitability of the company. And it is very important in India’s markets. Having a business ‘moat’ gives these companies plenty of support.
5th April 2019