Blog

  • Investors are focused on Brexit

    Investors are focused on Brexit

    2 min read

    Investors are focused on Brexit
    Investors are focused on Brexit. The House of Commons of the UK should again start voting for the Brexit agreement, presented by Prime Minister, Theresa May. During the first vote, the Parliament rejected the Prime Minister’s deal. If the revote again fails, the events may develop in two scenarios: the UK will leave the EU without an agreement, or the Brexit date will be rescheduled.

    But let see the risk of Brexit and the potential impact on the UK economy.  

    We also consider the likely reaction by markets for sterling, equities, and bonds.

    We just want to inform investors.

    The EU is the UK’s biggest trading partner.

    But, the UK is also a very important export address for the EU. Brexit may bring the UK the freedom to arrange trade agreements with third parties. But it may have to lose access to parts of the single market, and would almost surely be outside the customs union.

    Foreign direct investment is really important for financing the UK.

    The UK has a strong connection to Europe and vice versa. If Brexit causes the UK to lose access to the single market, it could cause capital inflows to reverse. The existing stock of assets and liabilities is very large. Say that, this has a huge impact on markets in a confusing plot.

    EU membership is frequently indicted the UK’s perceived migration problem

    Truth is that most immigrants come from non-EU countries. From an economic viewpoint, EU migrants arrive ready to work, pay taxes, and ease the difficulties of an aging population. Limiting migration in a Brexit scenario would almost certainly lower the UK’s trend growth, and increase the burden on the exchequer.

    The UK’s contribution to the EU’s budget is not a significant

    When the UK decides to leave the EU, finally, with just 0.2% ( December 2018) of gross national income, that saving wouldn’t solve a dent in the UK’s fiscal black hole. Moreover, if the UK chooses to follow the path of Norway or Switzerland, some costs may also be required.

    UK labor market will be less flexible

    Restrictions on EU migration may cause the UK labor market to become less flexible to demand. With raising the likelihood of more pronounced wage, inflation and interest rate cycles. A more cyclical economy would not only make recessions more frequent, but international investors could demand a discount on UK assets given the higher volatility of expected returns.

    A Brexit scenario is likely to cause sterling to fall further.

    We are all witnesses to that.

    Having already seen its first-class depreciation since the financial crisis in recent months, we can say that a further fall is likely under Brexit. But, the sterling could rebound should the UK vote to remain, as many investors have already started to hedge their sterling exposure.

    The outlook for UK equities is mixed under Brexit.

    The UK’s large-cap index has a large proportion of its revenues coming from outside both the UK and EU. If sterling depreciates, these companies may see the sterling value of profits rise. So, they would therefore benefit.

    The mid and small-cap indices have more exposure to the UK and EU and could underperform as a result.

    The outlook for bonds is mixed under Brexit.

    Credits could have wider spreads. The investors demand a higher premium against the risk of lower growth and higher default risk. Meanwhile, gilts (Gilt-edged securities are bonds issued by the UK Government)are likely to see higher domestic demand from safe-haven flows.

    The latest news: Ryanair UK investors to lose rights in no-deal Brexit

    According to the Guardian, British citizens who own shares in Ryanair will be barred from buying more stock, voting on company resolutions or attending annual shareholder meetings if a no-deal Brexit goes ahead, the Dublin-based carrier said on Monday.

    EU regulations require that airlines flying under a European license must be majority-owned and controlled by shareholders from the trading block.

    Ryanair said that to comply with these regulations it would have to restrict the rights of British shareholders, who control about 20% of the company’s stock, to bring them into line with other non-EU investors.

    In a statement to the stock market, Ryanair said: “These resolutions will remain in place until the board determines that the ownership and control of the company is no longer such that there is any risk to the airline licenses held by the company’s subsidiaries.”

    Ryanair has previously published a guide to the ramifications of a hard Brexit for its UK shareholders, explaining its rationale for the decision and claiming it has no alternative.

    Don’t waste your time.

    risk disclosure

  • Stock screeners – Why and how to use

    Stock screeners – Why and how to use

    3 min read

    Stock screeners - Why and how to use
    Stock screeners are tools which display the stocks a user chooses to seek out.

    Stock screening is a tool that investors use to filter a large database of stocks. They can help you cut through the market noise and figure out the best stocks to buy based on your investment objective and goals.

    Stock screening tools can be web-based tools or downloadable software.

    You can find some free screeners, as well as more advanced programs that can be quite costly.

    We will use finance.yahoo.com/screener to show you how they can be helpful.

    Stock screeners - Why and how to use 1

    This is discipline at its best!

    When you design the stock screen model, by using an inexpensive stock screening software or free tools on the internet, you can determine which stocks meet the criteria with a single click. This is far more efficient than digesting every piece of available information. Not to mention that most stock screeners can analyze thousands of stocks in seconds. It would be difficult for even a large team of researchers to accomplish the same task in weeks.

    Let’s go into more detail into each of these benefits.

    How stock screeners save you time

    The data set could include hundreds to thousands of stocks. And thoroughly analyzing all of them would be impossible for most investors. Delving into each company’s financial statements, ratios, multiples, and historical and future growth prospects would take entirely too long.

    Stock screeners - Why and how to use 2
    Once you determine which metrics will go into your stock screen, the screener filters out stocks that don’t meet your criteria and produces a list of stocks that do.

    The stricter the screening criteria, the fewer stocks will pass the screen.

    For example, if you’re looking for undervalued stocks, you may search for stocks with a price-to-earnings (P/E) ratio below a specific level. If you’re less concerned with valuation and more concerned with growth, you may look for stocks with a high level of year-over-year earnings growth.

    Once you have a collection of stocks that have passed your screen, you have to determine which stocks qualify for further analysis. This may be based on fundamental analysis, additional market research, or your current portfolio’s allocation to specific sectors or industries.

    Based on your filter applied you will find what you want. Like this:

    Stock screeners - Why and how to use 3
    A stock screener is a powerful tool that helps to filter stocks according to a wide range of criteria. You can find a wide range of criteria, such as Price, 1-Year change, Market Cap, P/E Ratio and more. The criteria are separated into categories like price, ratios, fundamental, etc.

    Stock screeners - Why and how to use 4

    Stock screeners remove behavioral prejudice

    Investors have natural tendencies to make foolish investing decisions. These are generally called “behavioral biases.” They can be difficult to detect and avoid. These biases can lead investors to make irrational investment decisions which may hurt returns.
    For example, investors will often change their strategy so that certain stocks will fit into it. Say you really liked some company. You might convince yourself that you should buy the stock even if it had too high of a price-to-earnings (P/E) ratio or too little revenue growth.

    Stock screening helps to remove these types of biases and helps investors to remain objective.

    But, a stock screener won’t save you from behavioral biases entirely. For example, if you wanted that company to pass your screen, you could change your screening criteria until it passed. In other words, you can cheat yourself.

    Stock screeners are just one of the many tools in the investor’s toolbox.

    They can help you narrow down your potential investments. It’s important to do your own research into companies’ businesses and decide whether or not you believe in their long-term prospects. Just because a stock passes your screen doesn’t mean it’s a good investment.

    Don’t waste your money.

    Think you know where are the markets gonna go?

     risk disclosure

  • Is Forex trading profitable? What Is it the truth?

    Is Forex trading profitable? What Is it the truth?

    Forex market - The differences with other markets 1How Forex trading can change your life?

    By Guy Avtalyon

    One reasonable question that comes up a lot is: Is Forex trading profitable? So many times this question comes from traders or people that want to get into the Forex market.  

    That’s because only 5% of traders are successful.

    The others cannot find any success with their tradings.  Maybe they are not able to recognize the right approach
    When we say “trading approach”, we don’t just mean their trading strategy.

    Your trading approach is much more than a trading strategy and we will cover that later.

    The brief answer is yes. Forex trading is profitable. The trading in the Forex market is profitable but chances are you won’t make any money.

    If you do not understand the risk or you don’t know how to manage your trades in the right way, you will lose. Let’s say, if you are risking too much per trade to resist a series of losing trades, you will be out of trading faster than you can imagine.

    If you continue to move your stops to avoid a loss, you will finally lose your account.  Only your broker will be happy. 

    You can become a profitable Forex trader but it depends on several factors. Some of those you can control, and others you can’t.

    Everyone comes to the forex market for a reason. Some come solely for entertainment, the others to become a professional trader.

    However, the good news is that there are things you can do to speed up the process. In other words, you can learn from other traders’ mistakes.

    Is Forex trading profitable?

    The fact is that many investors haven’t had the success trading Forex they had imagined. Their experiences cast a bit of doubt on its viability as an investment choice.

    Nevertheless, for a market that trades around $5 trillion daily in volume, it stands to reason that there are traders profiting from Forex trading. Otherwise, people would avoid the Forex market. But it is not the case.

    The right question to ask is how to trade Forex profitably and how to be systematically gain a profit in Forex.

    So, Forex trading is profitable if you have to know how to achieve it.

    How to make money trading Forex?

    In the forex market, you simply buy and sell currencies.

    Placing a trade is simple. The modus operandi of trade is very similar to other financial markets, for example like the stock market. So, if you have any experience in trading, you should be able to set it pretty quickly.

    The aim of forex trading is to exchange one currency for another in the expectation that the price will change.

    Forex trading is profitable - Is it the truth?Most popular currency pairs

    More concretely, that the currency you bought will increase in value compared to the one you sold. If you are applying the trading plan in a consistent way, you should be able to receive the rewards from your trading plan.

    Will you always win in Forex trading?

    No.

    You will take a loss and many in a row.  You will see your account varies. It can be depressing to see sometimes.

    The vision of your trading system is what should keep you fixed to your trading plan even when an equity curve going down.

    Yes, you will have losing days. These are the facts of trading.

    If you are asking about being profitable over the long run, the answer is yes. But only if you are trading a positive outlook trading strategy.

    One month of not being profitable does not make for the trading fiasco. It is assumed.  

    You must predict and plan to lose, and also, you have to assume that you will face the biggest loss of your trading work in the future. Expect that a multiple of risk loss is just around the corner.

    It will remind you that the biggest trading job is to protect your trading capital.

    You must have 3 things on your mind. Always.

    Forex trading is it worth it?

    Forex trading isn’t a get rich quick opportunity.

    Opposite to what you’ve read, Forex trading is not going to take your $5,000 account and turn it into millions. The volume we can earn is defined by the sum of money we are risking.

    The old saying “It takes money to make money” is exactly what Forex trading related to. Of course, that doesn’t mean it is not a profitable venture.

    You have to know, there are many successful Forex traders that trade for a living.

    How do they do it?

    They have gradually improved over time and increased their account to a level that can create a sustainable income.

    Have you heard about traders that are targeting 50%,  or 100% profit per month?  Yes, but the risk they are taking on is going to be pretty comparable to the profit they are targeting.  In short, in order to attempt to make a 50% profit in a month, you have to be prepared to see a loss of around 50% of your account.

    Even if you trade with an edge. Your return should be positive, but without leverage, it is going to be a small amount.

    Forcing leverage into the mix is how traders attempt to target extreme gains. In turn, it is how traders can produce extreme losses. Yes, leverage is beneficial up to point. But there is one danger possible, it can turn a winning strategy into a loser.

    Trading Forex with leverage

    The leverage as a winning strategy to lose money But extreme leverage can ruin a profitable strategy.

    Most novices minimize the possibility that loss leverage can ruin their accounts.

    Understanding leverage enough to know when to use it and when not to use it is important to your performance!

    Leverage is a very great tool but some traders use it to damage their trading capital. It is because they take their destructive force too easily or ignore it completely. Anyway, high leverage is something that most of the forex broker will like, it’s their preferred selling point.

    They’ll tell that you can make a huge gain using huge leverage. Even one pip is important to them. But you have to know that you could easily be destroyed by huge leverage also.

    Let’s say you have a coin that may earn $4 if it hit the heads. But when tails are hit, you will lose $2.

    Would you like to flip that coin?

    We guess you would flip that coin.

    Let’s see a different example.

    Let’s say you placed the trades by following some other trader’s acting. And she or he ended up with higher equity relative to you. That trader’s net profit/loss (P/L) was positive while your P/L was negative.

    There are two main points.

    When you have a losing trade, high degrees of leverage destroy your capital base. Moreover, it is forcing you to change your future trade sizes or deposit more funds.

    If you have a conservative approach and use the amounts of leverage according to that trading style, your equity P/L tracks your net pips P/L. Though you place trades in hopes of it working out in our favor, you must be prepared if it doesn’t.

    Part of that preparation is a result of managing an appropriate amount of leverage.

    Using sentiment can shift the odds in your favor

    Actually, we are talking about using the Speculative Sentiment Index (SSI). You can find a lot of articles on this subject.
    You can find that it is the best tool ever used. And it a part of almost every trading strategy that experienced traders use.
    SSI is a free tool that tells us how many traders are long compared to how many traders are short each major currency pair.
    What does it mean?

    It means to be used as a contrarian index where you want to do the opposite of what everyone else is doing.
    Using it for your trades you can turn around your work as a trader and become more successful.

    The bottom line

    When you ask if Forex trading is profitable, you must have all of this on your mind.

    If there is one word to describe the best trader, it would be – consistency.

    Trading currencies are all about implementing a trading plan. With consistency. Traders that do everything in a consistent way are holding to a proven edge. It is difficult to find the right way if you are constantly switching speed.

    Once again, Forex trading is profitable.

    Don’t waste your money! Do smart trading.
     

  • Short Call Option Strategy Explained

    Short Call Option Strategy Explained

    3 min read

    Short Call Option Strategy Explained 3

    What is the short call option? The simplest way to classify “short” trade is any trade short of that from which you will profit if it falls in relative value. 

    A short call option is one of the trading strategies in which the trader is speculating the price of the asset on which option is placed is going to drop.

    In short, a call option is the right to buy the underlying futures contract at a certain price.

    That means, also, that the writer does not own an equivalent position in the underlying security represented by their options contracts.

    Would you like to make a healthy return from a stock that drops in value in a short frame time?

    If your answer is YES, you should think about the short call strategy.

    Short Call Option in Practice

    When you short a call you’re selling it up-front. That means that you get a credit to your account right away. But also, you will earn a positive return when the call option price drops.

    Shorting, or selling, a call has many benefits, but the risks too.

    In addition to the benefit of decreasing time, a short call option position is flexible.

    This characteristic allows you to set the call’s strike price and your trade’s breakeven points above resistance levels you can see in your technical analysis.

    This will boost the chances of a prosperous trade outcome.

    Selling a call is a bearish trade.

    Why? Because you are selling the call first, for a high price. And you hope to buy it back later for a lower price when the underlying stock declines. Sometimes, it means you let it expire worthlessly.

    You should note that most traders believe that selling calls is a bigger risk strategy than selling puts. Most stocks and market indexes have a long term tendency to trend up.

    That tendency to trend up cause most bearish trades less likely to end profitably. This grows the importance of evaluating

    trends and finding the weakest stocks to trade.

    Let’s see this graph.

    Short Call Option Strategy ExplainedCall option 

    Selling the call obligates you to sell stock at strike price A (take a look at letter A) if the option is assigned.
    When driving this strategy, you want the call you sell to expire worthlessly. That’s why most investors sell out-of-the-money options.

    This strategy has a low-profit potential if the stock remains below strike A at expiration. Hence, the unlimited potential risk if the stock goes up.

    The reason some traders operate this strategy is that there is a high possibility for success when selling very out-of-the-money options.

    If the market moves against you, then you must have a stop-loss plan in place.

    You have to keep an eye on this strategy as it is open out.

    And, you have to consider ensuring that strike A is around one standard deviation out-of-the-money at the beginning. That will boost your chance of success.

    Yet, the higher the strike price, the lower the premium collected from this strategy.

    Some investors run short call option strategy using index options rather than options on individual stocks.

    Historically, indexes have not been as volatile as individual stocks. Variations in an index component stock prices tend to cancel one another out. Hence, lessening the volatility of the index as a whole is on the scene.

    There are two ways that a call option price will decrease in value:

    • The price of the underlying stock drops
    • Or the price of the underlying stock stays approximately the same as you get closer to contract expiration

    Short Call Option – Strategy Characteristics

    As we already say, the sale of a call option is a bearish options strategy that consists of selling a call option on a stock that a trader believes will decrease in price.

    Let’s go over the strategy’s general characteristics:

    Profit Potential: Credit received x 100
    Loss Potential: Unlimited
    Expiration breakeven price: Call Strike Price + Credit Received
    The probability of profit: Higher than 50%
    The position after expiration: If the trader holds an in-the-money short call through expiration, the trader will take an assignment of -100 shares per contract.

    Are there some assignment risks?

    When the short call is in-the-money before expiration, the trader is at risk of being assigned -100 shares of stock per call contract.

    The risk of a short stock assignment is highest when the in-the-money call has small extrinsic value. Especially when the underlying stock is close to being paid out a dividend that exceeds the extrinsic value of the call.

    Expiration profits and losses for a short call option position

    Take a look at a short call position from the following option chain:

    Short Call Option Strategy Explained 1

    Call option chain

    You will, for example, sell the 100 call for $10. Let’s, therefore, assume that the stock price is trading for $100 when you sell the call option.

    Initial Stock Price: $100
    Call Strike Price: $100
    Call Sale Price: $10

    If you sell this call option, your potential profits and losses at expiration are illustrated by the following graph:

    Short Call Option Strategy Explained 2

    Selling a call option

    So, this table describes different scenarios of this short call position at expiration:

    Stock Price Below the Short Call Strike (Below $100):

    The call expires worthless, and the maximum profit potential is $1,000.

    Stock price between $100 and $110: The call expires with intrinsic value, but not more than the initial $10 sale price of the call.

    The result is partial profits at expiration.

    If the call is held through expiration, the trader will be assigned -100 shares of stock per call contract.

    The stock price at the breakeven price is at $110:

    The call expires with $10 of intrinsic value. Because the call was initially sold for $10, the short call trader breaks even.

    If the call is held through expiration, the trader will be assigned -100 shares of stock per call contract.

    Stock price above $110:

    The call expires with more than $10 of intrinsic value, and therefore the short call trader gains losses.

    The exact loss is equal to: (Short Call Breakeven Price – Stock Price) x 100.

    If the trader holds the call through expiration, they will be assigned -100 shares of stock per call contract.

    Advantages and Risks of Short Call Options

    Advantages

    Immediate return – You get your maximum profit right away. Of course, you could lose that profit if the underlying stock price drops, so don’t get too excited.

    Significant returns in the short term – Options operate with leverage. That means you can see significant returns over just a few months.

    Risks

    Unlimited loss – There’s nothing to prevent a stock price from skyrocketing once you’ve sold the call option. In that case, you’ll take a huge loss.

    Margin wipe-out – If the trade goes south, you could end up spending a lot of cash out of your account to cover the short call. With less cash in your account, your margin funds will decrease accordingly.

    Don’t waste your money.

    Don’t start before you test your skills on virtual money and read this risk disclosure

  • Most Popular Currencies for Trading

    Most Popular Currencies for Trading

    3 min read

    Most Popular Currencies for Trading 5

    The most popular currencies are those with which all forex traders should be familiarized. But, they should know some of the underlying features and attributes of each currency.

    Ok, you already know this.

    Forex trading is the synchronous buying of one currency and selling another. Currencies are traded through a broker or dealer and are traded in pairs.

    Right?

    For example the euro and the U.S. dollar (EUR/USD) or the British pound and the Australian dollar (GBP/AUD).  By the way, they are the most popular currencies.

    So, when you trade in the forex market, you buy or sell in currency pairs.

    In Forex market you can trade majors, minors and exotic currency pairs.

    Major currencies are the most popular currencies.

    Major Currency Pairs and most popular currencies

    The currency pairs listed below are recognized as the “majors.”

    These pairs all include the U.S. dollar (USD) on one side and are the most commonly traded.

    The majors are the most liquid and the most popular currencies.

    Most Popular Currencies for Trading

    But there are also major cross-currency pairs or Minor currency pairs.

    Currency pairs that don’t include the U.S. dollar (USD) are recognized as cross-currency pairs or commonly as the “crosses.”
    Major crosses are also identified as “minors.”

    The most-traded crosses are obtained from the three major non-USD currencies: EUR,  GBP, and JPY.

    Minor Currency Pairs

    Yes, the major currency pairs make up the majority of the market. But you shouldn’t neglect the minors. The minor currency pairs account for all the other combination of major markets such as EUR/GBP, EUR/CHF, and GBP/JPY.

    With so many options opened, are you asking yourself – which currencies should you trade?

    A good rule of thumb for traders new to the market is to focus on one or two currency pairs.

    Generally, traders will choose to trade the EUR/USD or USD/JPY because there are so much information and resources available about the underlying economies.

    Hence, these two pairs make up much of the global daily trading volume.

    Most Popular Currencies for Trading One by One

    The US Dollar

    banknote
    So, we just can’t say it is among the most popular currencies. It is the most popular currency.

    The leading is the US dollar, which is the most traded currency on the planet.

    You can find the USD in a pair with all of the other major currencies. It usually acts as the intermediary in trilateral currency purchases.

    This is because the USD acts as the unofficial global reserve currency. Nearly every central bank hold it and, also, every institutional investment organization in the world.

    Moreover, due to the U.S. dollar’s global acceptance, it is used by some countries as an official currency.

    That practice is well-known as dollarization.

    The US dollar is also generally accepted in other countries. Its an informal alternative form of payment, but at the same time, that countries keep their official local currency.

    The US dollar is also an important factor in the foreign exchange rate market for other currencies. There it acts as a benchmark or target rate for countries that choose to fix their currencies to the USD value.

    You can find that countries pretty frequently fix their exchange rates to the USD to stabilize their exchange rate. They do it rather than to allow the forex markets to change its relative value.

    If you are new in forex you have to know that it is used as the regular currency for most commodities, such as crude oil and gold or silver, for example.

    Therefore, these commodities are subject to the economic principles of supply and demand. But, also, they depend on the relative value of the US dollar. All along with prices very sensitive to inflation and US interest rates.
    Interest rates directly affect the dollar’s value.

    The Euro

    Euro

    The euro has become the second most traded currency in the forex market. At the same time, it is the world’s second-largest reserve currency.

    The euro is new to the world scene. It was presented to the world markets on January 1, 1999, but a real banknote came 3 years later.

    Today the euro is the official currency of the large part of the countries inside the eurozone.

    Also, many countries inside Europe and Africa fixed their currencies to the euro. The reason behind their decisions is the same as it is with USD.

    They want to stabilize the exchange rate.

    The euro is broadly used and trusted currency. Hence, it is very accepted in the forex market. Its role is to add liquidity to any currency pair.

    The euro is normally traded in the forex market.

    Some experts, who are not in favor of the EU, are willing to say that the euro is traded by speculators.

    They like to claim that political matters inside the eurozone can lead to large trading volumes for the euro.

    In one we must agree with such experts: the euro may be the most “politicized” currency traded in the forex market nowadays.

    The Japanese Yen

    The Japanese yen is the most traded currency out of Asia. Many use the yen to assess the overall strength of the Pan-Pacific region.  Some can ask how does it come. You always must have in your mind economies of South Korea, Singapore, and Thailand. Those currencies are traded far less in the global forex markets. But there is yen.

    The yen is also important in the forex market because of its role in the carry trade. That’s when traders want to profit from the difference in interest rates between two currencies.

    Japan had a zero interest rate policy for more than two decades. Hence, traders have borrowed the yen practically without a cost and used it to invest in higher-yielding currencies. The rate differentials ended in their pockets.
    The carry trade gives a large part of the yen’s presence on the forex markets.

    The Great British Pound

    Most Popular Currencies for Trading 3

    The GBP, or the pound sterling, is the fourth most traded currency in the forex market. It is a large reserve currency. Its relative value compared to other global currencies is high.

    Forex traders will often base the value of GBP on the general health of the British economy. Also, on the political stability of the UK government. Due to its high value, the pound is also an important currency benchmark for many countries. It is a very liquid component in the forex market.

    Nowadays, GBP suffers due to the Brexit issue. Value oscillations are pretty much visible. Especially as pair with USD.
    These currencies are followed by the Canadian dollar and the Swiss franc.

    The Canadian dollar or loonie is probably the world’s foremost commodity currency. It moves along with the commodities markets, prominently with crude oil, precious metals, and minerals. Traders mostly trade the Canadian dollar as a hedge to their holdings of underlying contracts.

    The Swiss franc is viewed as a safe currency in the forex market. The franc tends to move in a negative correlation to more volatile commodity currencies, such as the Canadian and Australian dollars, or U.S. Treasury yields. Actually, the Swiss National Bank is very active in the forex market. They want to secure that the franc trades within a tight range, in order to reduce volatility and keep interested rates.

    Exotic Currencies

    Many other countries have their own currencies. Outside of the major and minor currencies is the large group of the so-called “exotic currencies”.

    Exotic currencies are made up of the hundreds of currencies, which are nevertheless important as well, especially in international commerce and finance. And they are among the most popular currencies too.

    The exotics are:

    RUB – the Russian Ruble

    CNY – the Chinese Yuan or Renminbi

    BRL – the Brazilian Real

    MXN – the Mexican Peso

    CLP – the Chilean Peso

    INR – the Indian Rupee

    IRR – the Iranian Rial

    This the list of just a few of the most actively traded exotic currencies. In some cases, a country will use USD as its currency, like Haiti for example.

    The bottom line

    The pair you choose to trade might be based on the country in which you will be trading. Or you can choose based on your analysis of where you see the most opportunities for profit.

    But, also you may choose on the fact what are the most popular currencies.

    However, always remember to base all trade decisions on careful analysis, with adequate risk management measures in place.

    Don’t waste your money!

    Don’t start before you test your skills on virtual money and read this risk disclosure

  • The Best Forex Strategies to Trade the Market

    The Best Forex Strategies to Trade the Market

    The Best Forex Strategies to Trade the MarketHow to find the best Forex strategies and win the market? Here are some suggestions.

    By Guy Avtalyon

    The best Forex strategies are those that fit your circumstances and personality best. Right? We wish we could give you a direct answer about what are the best Forex strategies.

    Well, we get this question frequently because we are the portal where everyone wants to find some answers about trading and investing.

    However, this is a complicated question.

    This article is essentially for those who are new to the world of currency trading. Also, they are questioning how they can make money from the forex market.

    The traders who are trading on demo or live accounts should also find some helpful advice in this article. Opposite to popular belief, you don’t have to be rich in order to trade forex today. All you need to start is a computer with fast internet and a small account with a broker.

    Before you enter into a position, you need to know when you are going to exit the market. WHEN is the most important resolution.

    A trader is not going to hold onto a position endlessly.

    How long you want to hold onto your open position will define your exit points and prices. If you pick to hold a position for a week, your profit goal would naturally be higher than if you were to hold it for a few hours. That is because you would expect the price to move further, given a longer period of time.

    You have to make your personal decision w depending on your risk tolerance level, lifestyle, and the amount of time to be dedicated to analyzing the market.

    Here are Traders Paradise’s choices that we want to show you better.

    The best Forex strategies that work:

    1. scalping
    2. day trading
    3. swing trading
    4. position trading

    So, we have to explain each of them.

    Scalping 

    This is the shortest time frame in trading. It employs small changes in currency values. It is the ultra-rapid action of opening and closing of a position within a few seconds or minutes. The aim is ‘stealing’ a few pips from each trade. The profit of the winning trade is not big. Hence, the number of such winning trades should be big enough so that these small profits can add up to a decent amount.

    Scalpers must have access to the tightest spreads and fastest connection speeds possible. Of course, in order to carry out this very fast trading, with the tiny profits.  They perform this many times a day. Scalpers have to perform many sequences, to collect small profits. Losses must be limited but in a way that one large loss does not delete out the profits from winning trades.

    Many forex market makers will not allow this type of trading. Simply, they think it is difficult to cover the opposite side of the transactions. The reason behind this is fast speed and numerous orders entered into their systems.

    Day trading is one of the best Forex strategies

    This is one of the popular types of trading. The traders open and close positions within a day. They also almost never hold their positions overnight due to the higher risk. What to do if prices change dramatically while they sleep?

    Their trades last from minutes to hours. Day trading relies constantly on intraday momentum to bring the current price to the aspired price level in one direction.

    Day traders are looking out for signs that a currency pair has a high probability of moving in a particular direction.  For day traders, a currency pair must go from point A to point B, within a day. Doesn’t matter whether the price is moving in a trend or range. Such traders know to wait for good trading opportunities, instead of trading madly like scalpers tend to do. This style of trading requires full concentration. It is the priority, the positions must be closely monitored on the price charts.

    Swing trading

    Swing traders hold their positions for a few days, but rarely more than a week.

    Identifying and driving on trends early is the central objective of this trading style. The profit goal tends to be set higher than that of day trading. Hence, the swing trader is expecting that by holding out for a few days, there is a better chance of capturing a larger price movement.

    Unlike the day trader, the swing trader has to deal with overnight risk. Swing trading requires less monitoring of the market. This type of trading is generally favored by people who hold their day jobs.

    Honestly, if swing trader wants to be successful, such must still keep up-to-date with the latest fundamental and technical changes in the market. Even if they are not monitoring the market all the time.

    Position trading as one of the best Forex strategies

    For many traders, this is one of the best Forex strategies. Position trading involves the longest period. It refers to traders holding their position for weeks or even months. Position traders attempt to recognize and trade currency pairs that signal that a medium to long term trend is playing out, but will take more than a few days to play out.
    Position traders usually close their positions while the trend is most powerful before it loses power.
    This trading time frame doesn’t demand a lot of time. That is the difference from others. There is not much need for absolute monitoring.
    If you practice position trading, it is smart to place a trailing stop. This will automatically close your position if the price retraces past a particular point

    When you try to find what are the best Forex strategies, you must have several things on your mind

    As a general rule of thumb: the smaller the time frame you trade then the more time is needed to be devoted to monitoring the markets. For example, day traders tend to be more in touch with the price swings and the goings-on of the market. You know, the positions are opened and closed on the same day.

    On the other hand, a position trader does not have to monitor the market so intensively. This is simply because the market has more time to move against them. It can move a lot further against them than it is possible in a smaller time frame.

    However, you have to decide on the length of your holding period. That must suit your personal preference by adjusting the profit target and stop-loss accordingly. Of course, the size of the profit goal and stop-loss will be equivalent to the length of your holding period.
    What does it mean?
    If your trading time frame is small, your target profit and stop-loss should be smaller. And vice versa. If you have a longer time frame, your profit target and stop-loss should be wider.

    Don’t waste your money! Never traded in your life? Stay tuned! 

  • The Financial markets – Important guide for beginners

    The Financial markets – Important guide for beginners

    Financial markets – Important guide for beginners 24

     

    Table of Contents

    by Gorica Gligorijevic

    The financial markets, what is that? It comes in many terms.  We can find them among financial markets, the capital market, Wall Street, and even simply “the markets.” The financial markets are places where traders buy and sell assets. That can be stocks, bonds, derivatives, foreign exchange, and commodities.

    The financial markets are where businesses go to raise cash to grow. Hence, the place where companies reduce risks and investors make money are the financial markets.

    Why do financial markets matter?

    Financial markets provide finance for companies.

    What’s our role in financial markets?

    Setting standards for financial markets. By doing this, we want to make sure financial markets are fair and there when we need them.

    The financial markets are the place where the trade is done.

    Financial markets refer to a marketplace, where creation and trading of financial assets. Hence, the financial markets play a crucial role in allocating limited resources, in the country’s economy.

    Furthermore, financial markets act as an intermediary between the savers and investors by mobilizing funds between them.

    The financial markets provide a platform to the buyers and sellers, to meet, for trading assets at a price determined by the demand and supply forces.

    There are different types of financial markets. We recognize several types of financial markets.

    * Capital financial markets
    * Money financial markets
    * Foreign exchange financial markets
    * Derivatives financial markets
    * Insurance financial markets

    The explanation about each of these types of financial markets you will find in this article Financial markets – Basic and Important guide for beginners.

    First of all, let’s understand what is trade.

    Answer this question could be: It is an exchange of goods or services in return of money, goods or services. But there is a shorter version: it is given and take.

    Everybody is familiar with the term “trade”. Actually, we are trading every day. Everything you purchase in a store is trading money for the goods.

    In earlier days, trade took place with the exchange of goods without exchanging of money. With the invention of money, it took its form as an exchange of items with money.

    The term “trade” indicates “exchanging one item for another”.

    It usually means the exchanging of goods for money. You know, it is just buying something. Speaking about trade in the financial markets, you will see it is the same system.

    Let’s say you trade shares. You are actually buying shares, which are a small part of a company. If the value of shares jumps, then you make money by selling them at a higher price.

    This is trade.

    You buy something for one price and sell it again for another, thus making a profit or loss. I’ll explain how this differs, of course.

    Let’s say, you don’t sell it. In the world of trade, it is also known as stay in a position. The consequence is you’re not losing but you are not profiting. But when you monetize the position you will lose or profit.

    Trade has taken birth with the beginning of humankind and shall continue as long as human life exists on the earth. It enhances the standard of living of consumers. Thus we can say, answering the question, what is it, that is a very important social activity. Those who want to trade cryptocurrency should start by choosing a company with a good reputation that offers an exchange and wallet. A beginner should also start with prominent coins.

    You can find those companies by searching Google, or just visit the Traders Paradise web site, and you’ll find it there.

    Currently, we are referring to coins like Bitcoin (BTC) and Ethereum (ETH). In the future, this could be changed.

    Free and open trade has produced competition and innovation. More about this topic you can read in this article HERE

    The economic revolution is afoot. You can either be a part of it or get left on the side of the highway feeling dumb.

    Traders Paradise wants to lead you, step by step, through this important activity. Read this post from the last word and learn about trading.

    Yes, we have more articles about it and you can also find how you can become the trader in 10 minutes.

    But first of all, you must understand the essence. It’s up to you now!

    What will you find here?

    Our experience, our knowledge, everything we know about the financial markets, TRADING, INVESTMENT about cryptocurrencies, stocks, trading, investing and markets in general.

    We, in Traders Paradise, want to show how wonderful is that, what are the PROS but also what are the CONS. The trading world is a world of freedom. No matter what other opponents want to say. Don’t let them frighten you.

    In this post Financial markets – Basic and Important guide for beginners we’ll show you how wrong they are. At first, we want to show you how bad and wrong lessons we got from our teachers about money, finance, education system all over the world.

    In this tutorial Financial markets – Basic and Important guide for beginners, you will find which investment or trading strategies actually work.

    You will learn how to trade. No matter if you have a big or small amount of money. We will explain everything about Forex (Foreign Exchange) and how you have to act like a professional trader because it’s a sum-zero game. Our surveys and also many types of research shows this statistic: 20% of traders take the money of the other 80%.

    You DO NOT want to be on the 80% side. This post is aimed to prevent you from falling there. In this tutorial Financial markets – Basic and Important guide for beginners, you will also find basic terms.

    Well, if you don’t know them how you can trade or invest?

    With this article, you will have everything you need to start trading or investing.

    We want to prepare you to step into this wonderful world and become a respectable trader. We will show you how to trade and invest some time on examples of cryptos sometimes it will be stocks or shares. But the principle is the same for all financial markets.

    So, let start!

    Wish you a nice reading.

    What Do You Know About Forex Trading?

    The Forex trading takes place on the Forex exchange. Let me introduce you the concept of Forex trading.

    Forex represents the foreign exchange/currency market and it the largest among all financial markets. The word forex itself is made of two English words: foreign and exchange and signifies the purchase of currencies from different countries.

    Forex trading

    As an exception of other stock exchanges, Forex does not have its physical office. It exists in an electronic network consisting of financial institutions. Also unlike other financial assets – currency needs to be at a balance point! Why is that?

    Because let’s think about a country, like the US. Its currency is USD and you can invest your money on USD comparing, say, Euro. So if the USD is increased (or Euro is decreased) you gain a profit.

    But inside the USA – the interests are different. There’s an industry of importers and an industry of exporters. Let’s say I’m an importer that lives in the USA, and I import apples from Mexico. Just for this example, let’s say that 1USD (US Dollar) = 2 MXN (Mexico’s currency). 

    Now I make a deal with my Mexican fellow that I buy apples for the worth of 2 million MXN (and it costs me 1 million USD). Now, if the USD will get stronger, and now we say that 1 USD = 3 MXN. Now I’m losing money because I could have bought more goods for the same amount of money at the same price I spent (1 million Dollars).

    But let’s say it’s the opposite – I’m the exporter. My fellow Mexican buy from me apples at the same deal. This means he buys from me at 2 million MXN. Now I have 2 million MXN which are worth 1 million Dollar. But then, the Dollar is rising and now it’s worth 1 USD = 3 MXN. He still bought .at 2 million, right? So now those 2 million worth approx. 0.67 million USD. Now I’m LOSING money because of MY OWN currency worth more.

    That’s Forex. It has to have a balance point because if not traders are going to lose. 

    Today, Forex is the largest financial market, which has a daily turnover of around $ 5.5 trillion a day. Moreover, you can complete this whole process online.

    The term currency market means the sale of one currency with the simultaneous purchase of the other. As currency pairs are traded, to profit from the shift in the exchange rate, you need to buy the currency that you think will strengthen and sell the other. There is no need to wait for a growing market to profit. At any moment, one currency will strengthen in relation to the other.

    The Forex market is constantly creating opportunities for investment.

    Since nothing concrete and tangible is bought and sold, this type of trade can be a little confusing. You should think that you are buying a part of the value of a country.

    If you buy a Japanese yen, you are buying a part of the Japanese economy that is in direct correlation with what the market thinks about the current and future health of the Japanese economy.

    Generally, the established exchange rate of the two currencies is a ratio that reflects the state of one economy concerning the state of another economy (the state, the currency).

    .

    Financial markets – Important guide for beginners 1

    Forex is opened 24 hours a day, except on weekends, so that Sunday trading starts on Sunday from 21:15 CET and runs until Friday at 23:00 CET. During the day there are several time intervals that coincide with the working hours of the world’s largest stock markets.

    Who trades on the FX market?

    Forex traders can be classified into two groups, hedgers and speculators.

    Hedgers: governments, companies (importers and exporters) and some investors who are exposed to exchange rate changes.

    Speculators: This group, which includes banks, funds, corporations, and individuals, creates artificial pressure on the course in order to profit from variations or price movements.

    Basic terms

    Pip – represents a change in the ratio of the currency by one decimal. It is the smallest unit change course. Pip is the fourth and the last digit after the decimal place in a currency pairs
    Lot – 100,000 units of currency
    Mini lot – 10,000 units of currency
    Micro lot – 1,000 units of currency
    Nano lot – 100 units of currency
    Stop and Limit – Orders –  Often the trader wants to limit the loss in the position he has opened (in that case he sets the “stop” order). Or the trader wants to take profit at a certain level, which is acceptable to him/she (in this case he sets a “limit” order).
    Long – Used for the purchase order
    Short – Tension used for a sales order
    Bid – Bid price
    Ask – The price that is claimed
    Buy – Shopping
    Sell – Sale
    Spread – The difference between the sale and purchase price
    Chart – Graph
    Timeframe – the Time period
    Leverage – Multiplies the amount of money you invest
    Candlestick –  Candlesticks show that emotion by visually representing the size of price moves with different colors. Red means the starting price was higher than the closing price at a certain time. Green means it ended higher than the starting point.

    Financial markets – Important guide for beginners 2

                                                                             Example of a candlestick chart scheme

    What is needed to trade on Forex?

    Before you start trading the currency, you need to open an account with a Forex broker. Our recommendation is that before you decide on trading on Forex, open a demo account with one of the brokers.


    So that through the use of the platform, you will be able to monitor market activities and learn more.

    Conditions for Success

    You must have a good knowledge of technical and fundamental analysis, as well as managing your account. You should also know the psychological aspect of the trade and that you are disciplined. Also, in Forex, you should learn the country you’re betting on or against.

    To be able to trade Forex successfully, there is a whole world of education, really extensive analysis. Also, the countless hours of tracking a very large number of relevant and potentially relevant information. All without any guarantee that the right decision will be made. But I would like to show you some examples of how to make a successful trading. First, you must know the math behind the Forex trading.

    Actually, you can become a millionaire trading forex. But you have to know it is not easy like you see on the internet advertising and TV. It depends on how much money you start trading.

    If you start with $5,000 and make 10% of your capital each month, yes, you will be a millionaire after 5 or 6 years. Just 10% of your capital each month can make you a millionaire. And if you start with $100K you will be in 2 years. You can’t do that in any other industry.

    Tell me, where you can start at $5K and become a millionaire in a few years.

    But remember, if your dream is to become indecent rich in a week or a month, forget about the forex. Go far away from forex. Because you will lose all your money, your car, your house and in the end, your family.

    Math Guide for Forex Trading

    I know, math has never been your excellent skill. The truth is that you are afraid of it. Anyway, I want to show you how simple it can be. I want to show you some mathematical formulas that every trader have to know if wants to make success in the Forex market. And you will see how these math concepts are very simple and easy to learn even if you think that math is a great challenge for you.

    Change in currency pairs value is estimated in pips. The minimum pip you can see in the fourth digit after the decimal place. The exception to this rule is Yen pairs. The minimum pip there you can see in the second digit after the decimal place.

    I’ll use the imaginary values, they are nor real.

    For example, if the EUR/USD currency pair increases from 1.2530 to 1.32560. It is an increase of 30 pips for this currency pair. In Yen pairs, if the USD/JPY pair rises from 85.20 to 85.40, that is an increase of 20 pips for this pair. The value of a pip is different for different currency pairs. Let’s use the forex math formula to calculate the pip value of a currency pair:

    Value of a pip is calculated

    1 pip/exchange rate  x trade size

    We are going to use the EUR/USD currency pair with imaginary values.

    One Pip = 0.0001
    Base Currency: EUR
    Exchange Rate: 1.3500
    Trade Size:  1 lot meaning 100,000 units of currency
    Pip Value = 0.0001 / 1.3500  x 100,000 = 7,407 EUR

    How it works on the example on the USD/JPY currency pair?

    One Pip = 0.01

    Base Currency: USD
    Exchange Rate: 85.50
    Trade Size:  100,000 units of currency which is  1 lot
    Pip Value = 0.01 / 85.50  x 100,000 = 11.468 USD

    Or let’s see this example GBP/CHF:

    One Pip = 0.0001

    Base Currency: GBP
    Exchange Rate: 1.3840
    Trade Size:  100,000 ( 1 lot)
    Pip Value = 0.0001 / 1.3840  x 100,000 = 7.22 GBP

    Let’s talk completely about probability and numbers to see what lies behind the successful forex trading. I want us to find if a math genius essential for good trading. Making money in the currency markets demands that you first have to predict the activities of policymakers and central banks. But it is best to leave it to the economists and stay focused on short-term forex strategies.

    So, let’s try to understand the margin and leverage.

    In Forex trading, leverage will give you the capacity to control a larger position. You will use a small part of your own funds and the rest you will borrow from your broker. Margin is the deposit demanded by your broker. He or she will ask you for margin/deposit to allow you to open a position.

    Leverage is calculated by math formula:

    Trade Size/Account Size = Leverage

    Here is a realistic example to illustrate this.

    For example, you want to enter the position with a value of $200,000. But you have $ 4,000 on your trading account. Your goal is to control $200,000 with the $4,000 you actually have. 

    $200,000/$2,000 = 50

    Your leverage in my example is denoted as 50:1.

    What will happen if you instead of $4,000 have $10,000?

    You will control $200,000 with the $10,000.

    $200,000/$10,000 = 20

    Your average will be 20:1.

    Brokers can offer from 50:1 leverage for forex trading up to 500:1. But think twice before you accept any offer. It is true that leverage may increase returns but also increase losses.

    Position Sizing

    This is one of the most serious and frequent estimations that you have to make if you want to be a forex trader. Actually, before you decide to enter any trade, you have to calculate the position size. I suggest you use one of the simplest calculations. It is a fixed fractional calculation strategy. The best is to risk 1-2% per trade, 1% is better and I’ll show you why. Take it as the rule for the fixed fractional risk.

    So, you have to decide how much you can afford to risk on a per-trade. When you make this decision you have to decide where to place the stop-loss. 

    Take a look where the most current swings are. Find support and resistance points. When you settle a level where you want to place stop-loss, you have to measure the distance in pips between this level and the entry you plan. Write down that number. Then, discover the value of each pip. And you can calculate your position size.

    Math is in this formula.

    current account size x risk per trade/distance between entry and stop x value of the pip

    Let’s say your current account size is $20,000 and the fixed fractional risk per trade is 2%. The distance between entry and stop is 100 pips

    And the value of each pip is $20.

    $ 20,000 x 0,2 / 100 x 20 = 0.80 lots

    This is just an example and you will find different situations but the principle is the same.

    This the other example. 

    Let’s say your current account size: $25,000 and fixed fractional risk per trade is, as I suggested, 1% per trade, which means for the account of $25,000 you may risk $250. But if you risk up to 2% it is $500 per trade. 

    Why 1% risk is better? 

    Let’s assume you have 10 lose 10 trades in a series. It isn’t so frequent but can happen. So, 10 x $250 = $2,500 and you had before entry $25,000 on your trading account and you can say you have almost all your capital intact and make great returns. A stop-loss order doesn’t promise an exit at the price you defined. In a gap in price, you could lose more than 1%. It is slippage. If you risk 1%, such harmful moves will result in a several percentage declines in the equity. It will not be a disaster. You can recover it.

    A stop-loss order doesn’t promise an exit at the price you defined. In a gap in price, you could lose more than 1%. It is slippage. If you risk 1%, such harmful moves will result in a several percentage declines in equity. It will not be a disaster. You can recover fast.

    For Forex trading, you measure trade risk in pips. When it comes to the stock market you have to measure in cents or dollars. Suppose you purchase a stock at $10 and place a stop loss at $9,80. Your trade risk is $0,20. You must admit it isn’t too much.

    To calculate position size in stocks, use this formula.

    Account Risk (€ for example) / Trade Risk (€) = Position size in shares

    Suppose you have a €200,000 account. So you can risk €2000 per trade which is money equivalent of 1%. Say, you buy a stock at €200 and a place a stop loss at €198 because your trade risk is €2.

    €2000 / €2 = 1000 shares.

    These 1000  shares are good position size. You are risking precisely 1% of your account. The trade costs you 1000 shares x $200 = $200,000. You have just enough money to make this trade. You don’t need leverage. And your stop-loss is at €198 which guarantees you to have €2000 on your account even if your trade goes wrong.

    How to trade – all secrets about trading

    How to trade is the most used question we ever heard.

    First of all, you must understand, trading is the younger cousin of investment. As a newcomer, you can be overwhelmed by the quantity of the data available in the stock market.

    First thing first

    When you simply sign up at one of these online brokerage companies, deposit an amount of money you can live with losing it, you are ready to start.

    The most important decisions you’re going to have to make in your road to becoming a successful trader in the financial markets are, what your trading style is going to be.

    Financial markets – Important guide for beginners 4

    Different trading strategies have their own collection of benefits and drawbacks. If you’re new to the trading scene and might not understand the differences in each trading style, you may be confused. This is extremely important to follow a strategy with your head and not heart!

    ”Damn, what I have to do?”

    You have the choice to simply buy and hold positions in any market for long periods, for years or even decades. Or you can complete your trades within one 24-hour period which is easy but the most challenging and fraught with the highest levels of risk, though it can bring big rewards.

    If you choose long-term trading and buy-and-hold trading, the offer is the lessened risk in exchange for fewer opportunities for reward.

    ”And now, what is the next thing I have to do?”

    Well, you have to pick your trading days. Research has shown that the third week of the month is the best time to buy stocks. According to research, the best of the best is the period between 18. and 22. of the month.

    Why is that?

    The prices tend to hit their lowest monthly points at that time. Because cash flows from dividend reinvestment and pension funds are likely to be at their lowest as well in that period. That means the best time to sell stocks is closer to the beginning and end of the month when cash flowing into the system is at its highest.

    Financial markets – Important guide for beginners 5

    Speaking about the period of the whole year, April and May are the most successful time to sell your stocks. But buying new stocks in September and October is going to get you the best price (in that time the market tends to bottom out).

    If you want to be a day trader, there’s a right time for you as well.

    The best time of day to trade stocks, if you are from Europe, is between 9:30 to 10:30 AM. This time frame is offering the biggest moves in the shortest amount of time (a great and efficient combination).

    You can extend it out to 11:30 AM EST if you want another hour of trading.

    The best time for a US-based day trader is in the late afternoon Eastern Time. Corporate earnings reports and statistical reports from the federal government regularly are published in the morning. They are visible from 1:30 pm to 2:00 pm.

    ”Is there any key that is successful?”

    I was waiting for you here!

    There are no instant solutions and you have to understand that you can’t find a secret formula or secrets about trading. If there is any secret or key, it is this: keep it simple, be systematic and get educated.

    Say, you had enough capital to open a trading account. This doesn’t mean that you’re going to be successful right out of the gate. Especially if you are a beginner and if you’ve never spent a day in your life in trading before. And if you think you’ll be able to dive without educating yourself, you’re likely to end up learning the hard way. You will watch how all your investment capital disappears into the ether in exchange for a handful of stocks that end up not worth much or worse, not worth anything at all.

    Keep in mind: trading is not gambling. But there are some tips.

    One secret you should know: everyone is selling the stock or vice versa. But it’s obvious that someone has to be buying the stock also. At what price? It depends if the stock has a demand. If not – people will sell it at ANY price, and that is what leads to major drops.

    The ultimate secret of stock trading is this, learn to identify and make your trades rational and not impulsive.

    As we said, there are still some tips:

    • If you are focused on odds trading and risk/reward rather than on your ideas and emotions can set the base for a very long and successful trading profession.
    • The stock market will never consider your emotions or appetites. A few principles are the most important contributors to the losses made in the stock market.
    • Know your risk tolerance, and trade the constant strategies. If you stay focused on these two points you can be sure you will trade for a long time.
    • Don’t be risk-averse, learn to evaluate risk and learn to understand yourself.
    • Trade up to the point you can bear the loss, don’t ever cross your limits. It’s better to wait for your time.
    • Always have a plan, build and diversify your portfolio, stay away from all the mumbo jumbo.
    • Only invest in the coins that will turn over a profit, find others that you trust to keep you properly informed, use the tools of the pros.

    Use the math to trade

    The usage of math in trading stocks can support you gain better results, that’s true. It’s just about identifying risks and possibilities.

    Applying math to everything from finding a sweetheart to winning in the casino, you can be right if you think that math may help you win the stock market. Maybe someone has done it before. But, there is no known system, no matter how advanced it is, able to predict the future. You have to know that.

    The math can do a lot and it is very important for every trader. 

    Complex math can estimate the chance of market or trading events. It is very useful to help you to minimize the possibility of bad events before they appear. How math can work? It’s like your insurance company. It will never be able to predict when someone is going to die but with a great percentage, it can reveal the cause of death.

    Basic knowledge of mathematics can give an advantage to you. Frankly, almost all charts and trading strategies are based on mathematical theories.

    Profitable trading is not about beliefs, not about a forecast, or stock tips or picks. It is all about math. The point is to make more money than you lose. Trading without following the math principles produces a lack in your trading. You have to put away from emotions and quantify a system that generates the profits. You have to be able to understand the math behind the trading if you want to achieve profitability. 

    The most important stage of using math is to have answers to those questions.

    About the risk/reward ratio: How much money are you risking for a chance to earn $100 or euros?
    Speaking about position sizing you must know how much money will you place in one position.
    Do you know how did the signals you use work historically?
    What is the most amount of capital you would want to lose from your equity peak?
    Do you know the average annual return you want to reach?
    What is the relation between your winning trades against losing trades?
    What is your worst-case scenario?
    Can you recognize the chances to destroy your account?
    Do you know where to place the stop-loss order? Can you calculate how much will you lose if you make a mistake while placing the trade? Also, can you calculate the biggest reward if you are right when entering the trade?

    Warren Buffet said that successful trading means 100% efficiency. But most successful traders are right only half the time at best. Simple math confirms that “winning” on only 4 or 5 of 10 trades can provide you a great profit. Of course, that depends on how many wins you have in comparison to losings. 

    Let’s say if you have you made 10 trades and you have 5 winnings with earnings of $3,000 on each. At the same time, you have 5 losing $1,000 each. Your profit is 

    (5x$3,000) – (5x$1,000) = $10,000

    Mathematics, coupled with tolerance, creates stock market capital more surely than “big game” bets.

    This is a realistic example.  

    Let’s say you bought 600 shares at $200 each. The market price was $1,400 per share. Let’s say the stated dividend was 25%. What is your earning percent on this investment? Here is the equation.

    (25/1400)x200 = 3,57%

    Or the other one.

    For example, you bought 500 shares in a company 25 years ago and you paid it $200 per share. The dividend is 25%. Your capital rose cumulated up to $5 million. But 25% came from cash dividends you’ve collected over 25 years. Your 500 shares value today is exactly that amount minus dividends. But your earning is exactly $5 million minus your initial capital of $100,000.

    The impressive thing about math is the strength of one right investment to defeat troubles in the market. 

    What would be the possible scenario if you made 25 years ago 20 different investments of $5,000 each?

    But assume you were not a very skilled investor at that time and 15 of your investments went bankrupt a few days after you put your money on it. You have to know it is an extremely rare situation in every investor life but can happen. 

    Would you manage that? Of course. You still have your fantastic profit thanks to the compound rate. Every of your, to say survived investments provided you something about 15% of compounding rate. That is an increase of $375,000 and you invested $100,000.

    So, you have 5 good investments. Honestly, just one good investment may neutralize all bad ones.  

    What is the point? Investing is easy and needs several right decisions. They have to be well structured, to neutralize bad decisions. The answer is to let time to work in your benefit.

    Historically, that method has created the millionaires. More than any other model. Stock trading and market timing may make for some distractions but they are far away from the place where the money is made.

    Stockbroker – Choosing an online

    This is one of the most important decisions you will make as an investor in the financial markets. And the most powerful tool in your hands. Every trader has it’s own investment style of trading, and abundance of brokers’ offers allow individuals to choose what best fits their needs. If you’re an active trader looking to try your hand at beating the markets, you probably have a good idea of what you want from a brokerage: low costs, premium research, innovative strategy tools and a rich with features trading platform.

    The era of online stock brokers makes the world as high-risk/high-reward investing available to the wide public.

    Profitable investing takes time and a lot of hard work.

    It also requires you to use a brokerage service that fits your investing goals, educational needs, and learning style. If you are new investors, selecting the right online brokerage can mean the difference between a breathtaking new income stream and a short-lived struggle against disappointment, followed by inevitable frustrating handover.

    You have to know one thing, there’s no sure-fire way to guarantee investment returns, but there is a way to set yourself up for success by selecting the online brokerage that best suits you. I’ll try to show you all the important things you should be looking for in your ideal brokerage on your path to find the best online broker. For a starter, take a moment to focus in on what is most important to you in a trading platform, before you start clicking on brokerage ads.

    You’ll be surprised!

    The most important is to recognize your own needs in financial markets. 

    You must know them. If you are a novice, you may give advantage to the basic educational resources, easy access to support services. Maybe you want the ability to practice trades before you start with real money. An advanced investor, but one who wants to find a new broker, would seek for advanced chartings, more order options, or to trade derivatives, commodities, and fixed-income securities, all along with stocks.

    And you have to be honest with yourself about where you are right now in your investing tour and where you want to go.

    Do you want to try your hand at day-trading but don’t know where and how to start? Or, maybe you like the idea of tailoring your portfolio, or you want to pay a professional to provide it done right? For now, I suggest you start with these crucial deliberations as a way to determine which of the brokerage features would be the most important to you.

    To help yourself to find and use the best online stocks trading platforms be honest when you are answering these questions

    a) How much do you already know?

    Obviously, no one knows everything. But the question is how comfortable you feel when risking your own funds. Again, I encourage you to start with a demo account (you can find at the end of this post a link to a demo account)..

    b) What kind of trades will you want to execute?

    Stocks? Forex? Crypto? Daily?

    c) Are you an active or passive investor?

    Are you the type of person who can start a trade, let it go with its strategy and leave it aside. Or you’re the type of person who checks his portfolio daily, read about it, sign up to newsletters, etc.

    d) What kind of help do you need?

    Do you need help in learning how to trade? On what to trade? Recommendations? Or maybe you want to do it all by yourself?

    e) What are your goals?

    This is an important question when it comes to financial markets. Your goal is to make a profit, of course. But, how much you’re willing to lose? How “hard and dangerous” your trades look? How much profit you want to gain and monetize and how much you want to leave at your broker account to use for more money? These questions will act as your guidelines. 

    Be brutally honest with yourself about how much time, energy, and effort you are willing to put into your investments when you want to enter the financial markets in this way. Your answers may change over time, no one can anticipate all their needs and goals for the rest of their lives. Just start with where you are right now and go with the flow.

    Pay attention to several more things such as:

    * Does the brokerage website offers two-factor authentication
    * Do they clearly explain how they use encryption or “cookies” to protect your account information and how they work?
    * Try searching the web for reviews of the brokerage, using keywords like “insurance claim”, “fraud protection”, “customer support”, “chargebacks”, “easy withdrawal”
    * Will the company reimburse you for losses resulting from fraud? etc.

    And then test the broker’s platform.

    Financial markets – Important guide for beginners 6
    Every brokerage should have a decent description of what kinds of tools and resources it’s trading platform offers. But sometimes the best way to evaluate platform quality is to give it a test drive. To find brokers that allow you to open a free or demo account, it might be worth the effort to go through the signup process just to access and test the trading platform.

    How Much Money Do I Need To Start Day Trading?

    How much money?

    This is one of the most frequently asked questions I hear from people who want to start day trading stocks, forex or futures markets.

    Well, the amount of money you need depends on where you want to trade, your style of trading, do you want to trade forex, stocks, or futures.

    And of course, how much money you need to start trading depends on which country you are coming from.

    Capital Required to DAY TRADER STOCKS

    For example, if you want to be a day trader in the USA and to trade US stocks, you need to maintain an account balance of $25,000 or more.

    You have to start with at least $30,000 if you plan to make more than 4-day trades per trading week.

    Four-day trades or more per week gives you “day trader status” and you’re subject to the $25,000 minimum account balance. It is recommended you start with more than $25,000, to give yourself a buffer above the minimum requirement.

    If your account sinks below $25,000 you will not have the possibility to day trade until you renew your account to more than $25,000.

    But in case, if the country you live or want to trade, doesn’t require the $25,000 minimum account balance, it is recommended you still deposit at least $10,000 into your day trading account.

    With smaller accounts than this, commissions and fees will significantly erase profits you made. Usually, online trading platforms let you trade CFD and forex, and for those, you can start with only $250 minimum deposit.

     

    Financial markets – Important guide for beginners 7

    One of the common mistakes that traders make is being under-capitalized. Losing trades happen, even to the best traders. But after taking losses you still need to have enough money to keep trading. It’s recommended risking 1% or less of your capital on a trade.

    The risk is the difference between your entry price and your stop-loss price, multiplied by the number of shares of have.

    Capital Required to DAY TRADE FOREX

    To open an account in the forex market you will need less money because it is not regulated like stocks.
    Forex gives leverage up to 50:1. However, it can be higher in some countries, but this is the usual amount. Increasing leverage means more risk but also more rewards.

    Leverage is basically trading with money you borrowed from the broker. Anyway, you have to be aware of a few things.

    For example, you may have $2,000 in your account, but you want to buy $10,000 worth of the EUR/USD. Your leverage is 5:1 on this trade. The brokers will not charge a fee for leveraging, but they will charge you a commission. You have to realize that leverage is a double-edged sword, increasing profits as well as losses. If you take a large position, the broker will charge you more commission and vice versa.

    While the broker doesn’t charge interest, the market does.

    Currency traders are subject to the interest rates prevailing in the currency they trade.

    Every transaction is buying one currency and the selling of another done at the same time. You may make a few dollars a day which will grow your account over time. But you can also earn a lot of money if you open an account with a bigger amount.

    Professionals suggest, if you want an income from forex day trading, start with at least $1000, and preferably $3,000 to $5,000. This amount allows you to potentially start building a monthly income. It is what the most day traders are looking for.

    Capital Required to DAY TRADE FUTURES

    Futures contracts are traded on oil, gold, natural gas, and stock indexes.

    To trade futures, most brokers only demand a deposit of $1,000. For most brokers, you need to have at least $400 or $500 of capital in your account to take a one contract trade.

    This is called day trading margin

    Financial markets – Important guide for beginners 8

    Opening an account with only $1,000 isn’t recommended. This is the recommendation of the pros. You have to open the futures account with at least $8,000. You will need more if you day trading ES futures. The futures under the ES symbol are built on the S&P 500 stock index. It is a benchmark for U.S. stocks. Hence, your broker may require additional margin. You may wish to start day trading with at least $10,000 to provide you some flexibility in what you can trade.

    You have to create a sustainable trading plan and test it with a demo account before you enter the trade with real money. Your trades have to be profitable for at least several months in a row before opening a real day trading account. This gives you time to see where you need improvements.

    When Is The Right Time To Invest In Crypto?

    The right time? Let us be clear. For those without experience, it’s never the right time. That means you MUST have knowledge, information, and experience with a free trial demo account. After you test everything you may say it is the right time for further step: investing and trading cryptocurrencies. You can make really serious money on cryptocurrencies, that is true. But you have to take care of several things when you enter the financial markets. You would be very careful when investing in any crypto because all prices of cryptocurrencies have dramatic ups and downs.

    Generally speaking, I should not advise anyone to invest if there is a misunderstanding about what they are investing in.  And when the only expectation of further growth based on previous growth is present. In addition to the famous and biggest Bitcoin, you can find many other interesting cryptocurrencies on the market.

    When I say ”interesting” it means that we think their concept is interesting, not the potential for price growth. For example, I don’t know when you’re reading this – but now, Facebook is working on its own crypto coin. For what will it use to exactly, is still unclear?

    Before you decide to trade cryptos, keep in mind that you feel well informed. And if you are not ready to lose what you have invested, you should not even try because there is no easy earning!

    Is this the right time for trading or investing cryptos?

    There is an obvious difference between those two terms – trading and investing.

    Investing refers to the purchase and storage of cryptos. Trading involves active participation in the stock market and frequent purchases and sales in an attempt to profit from price changes.

    If you are asking me about trading, it is always a good time for professional traders, for those inexperienced and untrained it’s never the right time. Hence, my opinion is that no one should engage in trade cryptos, without basic knowledge about it.

    First of all, everyone should bear in mind that it is possible to lose everything. It can happen due to bad decisions or because of the flops of the user. If you are not prepared to lose everything that you have invested, you should not invest.

    When referring to crypto trading and investing – since there no REAL value, the prices may vary and go as high as 1 million dollars per coin or 0.00001 BTC per dollar. There’s no real value, but it is worth something because it solves a problem. And I may say there is a big one. It allows people to transfer anonymously the money!  This means you can buy illegal services/merchandise with it – this will always have demand. But not only that, you can hide your activities and make genuine and “white” money without anyone knows it’s you or the government know. We, for example, have a supplier that we know who he is, is not doing anything illegal, but he wants to get pay in crypto.

    The ONLY way the crypto industry can totally fall (and in this case – worth exactly zero) it if the technology behind it, the blockchain, will be found as useless. It hasn’t happened and it might never happen (or until a quant computer will arrive in the world, but that for another story…)

    Also, you should be careful in choosing a stock exchange.

    Always use strong codes and “2-factor authentication” and you should be able to think on your feet. Most popular exchanges like Binance, Bitrex, Coin Exchange, Kraken, Kucoin, HitBTC, Gate.io, and Cryptopia recommends Google Authenticator.

    Financial markets – Important guide for beginners 9

    Few exchanges accept Authy and few exchanges have their own 2FA service. This is very significant for online security hence whichever exchange or trading sites you are on make sure to enable 2-factor authenticator. Do not fall into euphoria when prices rise and do not panic when they fall.

    How big is the initial capital?  

    Also, how much money you need to start trading crypto? It depends on how much you are ready to lose, how much you expect to earn and how much you are inclined to risk. I have to emphasize that the right answer is your individual assessment.

    How to track the value of cryptocurrencies?

    You have to be registered on one of the exchanges where the cryptos are traded, to verify the order and deposits money. That’s all – when the money is deposited in the market, it can be traded. It is highly recommended for beginners to test their skills on some free demo account and after that, they are pretty ready to play with real money.

    Is It Possible to Lose Money Trading Bitcoin and Crypto?

    Losing money is possible. First of all, trading cryptocurrencies is not an easy task – it is a CHALLENGE and FIGHT! That’s the point!

    Frankly, you are not the only one who lose money right now. But remember like in the war:

    The lost battle is not the lost war. It shouldn’t be the question, WHY people lose money in crypto trading (it’s almost the same in every trading). The right challenge is how people manage it in general.

    Crypto trading is one of the best “money-making” methods today if done right.

    In order to avoid failure, we will introduce several reasons why people are losing money by trading crypto.

    Is there a reason to get panic? Well, actually there is no reason. One of the biggest and most important tools that traders have is technical analysis. But there are so many and plenty of ways to lose your money! Trust me! For example, you can use social media predictions. Or you follow someone in the hope that he/she knows what to do.

    And there can be the first catch.

    You can become a victim of fake news. Because naturally, marketing always goes through these channels to keep up with the current information highway traffic. It wouldn’t be a good idea to buy coins by following “Tips” given by ICO’s or people that are trying to sell their coins to increase the value of what they have.

    Right?

    They’re trying to create a fake “hype” that can end up in disaster. That’s why you should always do your own research.

    Clear?

    FOMO or “Fear of Missing Out” is something that most people are actually feeling today.

    The Bitcoin train has long gone leaving people with doubts on which of the altcoins would be the next big star. When Bitcoin has soared up to heights that no one has ever dreamed, a lot of people were in awe and dismayed that they didn’t buy BTC earlier.

    This sense of lost opportunity again triggers, always when the price of a coin goes up. It is making people buy at the wrong time (the price is high, damn) with the fear of it not going back down.

    Strategy!!!

    Going into the world of crypto trading without any strategy in mind is more like you are entering the cage with hungry lions! You will not survive! You should buy some books about trading strategies.

    “Hold on for dear life.” HODL, damn!

    HODL

     

    Most of the exchange/trading platforms or websites have a feature called “Stop Loss”.

     

    Financial markets – Important guide for beginners 11

    There you will be able to control the loss of your assets by setting a “safety net” that would stop your loss on time and not drag you down to limbo. Limbo is not a good place!

    Lovely leverage and margin trading! Too much of it is bad.

    Leverage or margin trading can be devastating if not used properly. If you are trading with a 20:1 leverage you can earn $20 if the price of your trade goes up by $1. But if your investment loses and it goes down $2 you will lose $40 instead of earning. A leverage trade is always expressed as a ratio: as an example, for a 20:1 leverage, you will be able to buy $20 assets with only $1. Trading on leverage is a great advantage because you can profit with the “borrowed money”. Using leverage provides you to multiply your position. For example, 100x leverage will extend your potential profit by 100 times.

    Reasonably, using leverage will raise the risk, more than in a standard trade. Luckily, the risk is not proportional to the leverage. Hence, your losses will not be multiplied by 100. How is that? Well, you cannot lose more than you initially selected to the trade.

    But I think you will need more examples. OMG how much I like math 🙂 Let’s imagine you want to buy a position of 1 BTC worth $10,000. To get the margin needed for the trade you have to divide the total value of the transaction by the leverage given for the trade.

    margin = total value of trade/leverage

    So, the value of your long position is valued at $10,000, and the margin amount for the trade at 100x leverage is calculated

    ($10,000/100) = $100

    This means, to be able to trade a contract valued based on, in our case, BTC/USD price of $10,000 at leverage 100x you will need a deposit at $100. The added advantage of leveraged trading is that it lets you short the asset. What does it mean?

    Well, you would be able to profit from the drop in the price of that asset. The short position means, you are borrowing the coin to sell it and purchase it back at a lower price. The difference in price is your profit minus the ‘debt’.

    Do not ever trade more than you can afford to lose!

    The most popular saying in the trading world is “making margin trading or the use of leverage to go beyond the line of betting/trading more than you can afford”. Since you are already in debt the minute you took the leverage. I believe that you have the right reason to invest some time in learning. You don’t need a degree! All you need is to read and to make a decision or you will face all ways of successfully losing money in trading Bitcoin and crypto.

    Golden rules for investing in the stock market

    Fast money and easy earnings are mostly what young people want to succeed in the business world. They are attracted to exchanges, money is invested in shares. However, there are many curves, curvatures, spirals and twists that, and if you don’t know how to avoid them, your trip to the stock market can be very short-lived.

    What are the golden rules for investing in the stock market, which should be known primarily to beginners in this business, but also to more experienced stock traders?

    * Create portfolio

    You can do this in a simple way. There are many free portfolio managers on the Internet, so use some of them to make a free account.

    Create a fictitious portfolio in which you would potentially invest and monitor the situation for a while, a minimum of one month. This will give you the best insight into market volatility.

    Before you take the first step, the goal is to create a profitable fictitious portfolio as an investor on the stock market. This is one of the golden rules.

    Financial markets – Important guide for beginners 12

    * Read business magazines

    To successfully start investing in the stock market, you need to be aware of the world’s stock market and what are the social events that affect the rise or fall the price of shares. Many respectable business magazines are dealing with this topic (Forbes, The Economist, Kiplinger’s are some of the most famous ones). Follow the events in the global economy and finance and you will be able to swim more easily in the very turbulent waters of the stock market

    * Buy stock from a field you know well

    Before investing money into something, you should understand the business the company is dealing with. The first stock you will buy on the stock market should be from the sector you understand and it is familiar to you. For example, if you know the banking sector, try to explore the market and find a bank whose stocks are good and worth investing. Never invest in the action itself, but the company.

    * Have realistic expectations

    There may be a problem if your financial goals are based on unrealistic presumption. Try to be realistic in your ambitions and goals. In this way, there are fewer chances to lose money or be disappointed in your stock market business.

    * Do your own research

    You will hear from people who are dealing with the stock exchange that they have bought some stocks because the same was done by their friend or family member who understands this business.
    Accept everything with reserve. Before buying a stock, do research.

     

    If some stocks brought in earnings in the past it doesn’t necessarily mean that this trend will continue. Always believe in yourself than other people’s estimation.

    * Stock exchange is NOT a money-making-machine

    Most of those who want to participate in the stock market, have an unrealistic desire to double or triple investment in a short time frame. If you are one of them, then that’s not a job for you.

    For those who want to invest, 10% to 12% of the earnings for a long period is quite a good investment. You need to realize that you are just a small fish in a big lake and that your success depends on many factors.
    Follow the clues and make conclusions.

    * 3 or 4 good stocks are enough

    Don’t overplay, especially because you are a beginner in this business. More than 10 stocks are a good portfolio, but for investment funds.

    They indeed make more profit, but if you make a smart and wise decision you will earn enough money.

    * Don’t try to predict the stock price

    Not even the biggest billionaires and owners of the largest multinational companies in the world are doing this. No one can predict, at least for a longer period, several stock market cycles. Ability to guess the moment when the stock will have the highest value is still a myth. Even for those who have an insight into the business of some companies. Therefore, for successful business and investing in the stock market, you need to acquire certain knowledge and skills.

    Although, there is some artificial intelligence computer software that might not predict per-se, but can behave and act faster and more accurate way than a human being. Traders-Paradise will give you access to one of them, one of the best developers with his team is working on it. 

    READ more and Subscribe to get more information about AI in the financial markets.

    According to the research, the risk of investing in the stock exchange is most often taken over by young people who have just finished college. But, like in every other business, the experience you get, will help you be wiser in making decisions in the future.

    That’s how it works!

    What Is better: Investing or Trading and what are the differences?

    Investing or trading is the right question. Let us explain the differences between traders and investors, at first.

    Stock traders are individuals (or entities) engaged in the trading of equity securities, or the transfer of other financial assets. They work either for themselves or on behalf of someone else.  Hence, they may operate as agents, hedgers, arbitrageurs, speculators, or investors.

    Stock investors are individuals (or entities) who use their own money to buy equity securities. The goal of the stock investor is to gain returns, which come in the form of income, interest, or appreciation in value also known as capital gains.

    DIFFERENCES BETWEEN TRADING AND INVESTING

    Investing and trading may often be classified together. But, they are both different ways of attempting to profit from the financial markets.

    The goal of making investments is to progressively increase wealth over a long period of time by using the buying and holding of a portfolio of stocks, mutual funds, bonds and other methods of investment.

    Trading involves short-term buying and selling of stock and commodities such as currency pairs and other instruments with the goal of earning profitable returns which outperform a traditional buy and hold investing.

    For example, while most investors may be satisfied with a 10% annual return, traders may seek to achieve this per month.

    William Feather

    Period of acting

    Return on investment and payback period seem to be the two most commonly used financial metrics for making sustainability investment.

    Trading is a method of holding stocks for a short period of time. It could be for a week or more often a day! The trader holds stocks until the short term high performance.

    On the other hand, investing is an approach that works on buy and principle.

    Investors invest their money for some years, decades or for an even longer period.

    Short-term market fluctuations are irrelevant in the long-running investing.

    Growth of capital

    Traders look at the price movement of stocks in the market. If the price goes higher, traders may sell the stocks.
    So we can say, trading is the skill of timing the market.

    But investing is an art of creating wealth by compounding interest and dividend over the years by holding quality stocks in the market.

    Risk of both fields

    Both, trading and investing, including risk to your capital.

    But trading involves higher risk and higher potential returns. The price might go high or low in a short while.
    Investing takes a while to develop (and there’s a whole course we created to explain how to do it). It involves comparatively lower risk and lower returns in a short run but might deliver higher returns by putting together interests and dividends if held for a longer period of time.

    Daily market cycles do not affect much on quality stock investments for a longer time.

    Essential Differences

    Trading is a one day match while investing is a championship.  Similarly, traders are skilled, technical individuals, they learn market trends to hit higher profits in the stipulated time.

    It is related to the psychology of the market.

    Investors, on the other hand, analyze the stocks they want to invest in. Investing also includes learning business fundamentals and commitment to stay invested for a longer-term.

    It is related to the philosophy that runs the business.

    For example: If in the company’s balance sheet you see the inventory cell is too high, that might indicate problems with selling and marketing. This also may suggest higher and unnecessary payments for containing the inventory. This usually leads to some drops in stock price.

    Traders put money in stock for a short-term, buy and sell fast to hit higher profits in the market. They seek a smaller and shorter opportunity.

    Missing the right time may lead to a loss. They look at the present performance to hit the higher price and book profits in the very short term.

    Investors keep themselves away from trends and invest in value. They invest for a longer period of time keeping the attention of the stocks they hold. They wait till the stock reaches its potential.

    You are the one to decide if your goal trading at a higher price making a smaller profit in a short time. Or holding on and sell at a much higher price, in the long run, is what you aim for.

    Trading Investing
    The time required to be spent on action Daily continuous tracking of the stock Few hours before taking an investment decision
    Costs Higher due to frequent trades Relatively lower
    Risk involved High Relatively lower
    Returns Low (can even tend towards negative over time) Higher
    Taxation Short term capital gains tax None provided held for more than a year

    A key rule of trading

    Do it only when you are certain that there is an upcoming future event which is predicted to drive the stock value of an organization or entity higher. But it is obviously not an easy task.

    If you think an asset’s price will go up – it’s clear that many other traders also know what you know. So it’s important to be one of the first who starts their position. If an asset has already made its rise – it’s not the best time to buy!

    When trading, there are certain strategies which must be put in place. Traders should take note of the news and use it to make an educated decision which will hopefully enable them to make a profit afterward.

    This shows the difference between trading as a short-term investment and investing as a long-term method of gaining wealth.

    When investing, the goal is to bank profits over the long term, with dips in value simply providing the opportunity to buy more of the commodity in question. Investing means sitting it out when the commodity rises in value as there will likely be more good news ahead for the company and more profits to be made.

    If you are new to the world of investing and trading, it’s important to know which you are going to choose.

    The imperative to increase your financial gain is what defines it.

    Knowledge is the key. If you are knowledgeable about the stock market but have little idea about how to trade Forex, for example, you will naturally head over to the stock market for your first investment.

    General advice: Don’t get investing and trading confused – it could seriously hurt your portfolio!

    The Difference Between Investing and Trading Bitcoin

     

    One of the biggest benefits of Bitcoin is its decentralized nature. There is no need for a central authority to be added. Hence, you can send money and eliminate banks. The most important, you don’t have to pay remarkable fees or wait for the money to come to your bank account. The whole process is finished in a minute. All the transactions are recorded in the public ledger.

    The ledger is based on blockchain technology. That allows every user of the Bitcoin network to access the records. Therefore, all users should be protected from stealing and cheating. If something suspicious arrives, the entire network would be cautioned. Bitcoin is impressive and brilliant and unique and free of governmental control.

    But before you choose to hop into investing or trading Bitcoin, you have to know a few things about its nature.

    Bitcoin isn’t a fiat currency.

    Hence, its price isn’t directly related to the economy or policies of a single country. Bitcoin has a difficult history of ups and downs, many of them related to worldwide events

    Financial markets – Important guide for beginners 16

    In simple words, bitcoin trading is the buying and selling the coin.

    Bitcoin trading means to gain when you buy it at a low price and sell when the price is high. The difference is your profit.

    Buying bitcoin means that you spend a small amount of fiat for a big number of bitcoin. Selling bitcoin means that you get a great amount of fiat for a lower number of bitcoin.

    Trading vs Investing Bitcoin

    This choice should depend on the knowledge of Bitcoin and the available property.

    Investing in Bitcoin can start from a small amount which can be increased with time and experience. It’s a long-term project, which might lead to accumulating a large amount of money.

    Trading should be reserved for those who know the Bitcoin nature in-depth and aren’t afraid of losing. The constant fluctuation of Bitcoin can be an exciting experience for any trader. On the other hand, it can scare away those who do not know how to deal with or handle it.

    In other words, the difference between investing and trading Bitcoin lies not only in the technicalities of it. But also in somebody’s character and temperament.

    A lot of newcomers are hooked with an idea that they can make a lot of money and can do it quickly while trading Bitcoin.

    It is a powerful scene and rates are shifting faster than in a traditional stock exchange. But it comes with higher risk. Bitcoin prices grow and decrease dramatically during the day even hours. The price is defined by exchanges. Exchanges will show you the bid price when you want to buy bitcoins. The bid price is the highest price that someone is ready to pay. The “ask” price is the lowest price for a sale. The highest and lowest prices are determined from trends covering 24-hour.

    Financial markets – Important guide for beginners 17

    What else you have to know about trading and investing Bitcoin?

    If you’re thinking about trading, you have to put a large amount of money on the market. Be careful and invest in a protected and reliable wallet.

    An exchange can be ruined anytime, all with your money in a play.  It has happened in Bitcoin’s beginnings. The awful fall ended in losing over 800,000 bitcoins. The bitcoin owners never get money back.

    One of the most important features of Bitcoin trading is the possibility to use leverage. We already discussed leverage. It is similar to forex trading.

    For example, you have a 50:1 leverage, so you can place trades 50 times higher than your current capital. But in Bitcoin’s trading, the leverage ratio is significantly lower than in forex.

    The leverage can produce high returns, and also comparably losses.  In essence, you are betting that bitcoin price will reach a certain level. This form of trading is almost parallel to gambling – you bet a certain amount of money that a Bitcoin’s price could reach a certain high. And there is a trick. While in forex trading currency pairs can change the price by 1% maximum over one day, in crypto trading price can increase or drop more than 30% in 24 hours. 

    And you can trade from home, everyone’s dream.

    You may trade from your home and here is the detailed instruction on HOW

     

    Financial markets – Important guide for beginners 18

    The First Trade – How To Execute It

    The first trade should be like a selection of a school. You have to choose what assets or securities you want to trade. After that, you have to pick the broker or brokerage company to obtain access to the markets. That’s very important because the broker you choose will have a primary impact on securities you want to trade. Also, pay attention and check the tools the broker provides. Also, how much you will pay in fees. Hence, what returns you can expect from your trades. You have to find a broker that would charge low fees and provide you with a full package of support to make your trading easier.

    And you have to choose the right strategy.

    Trade execution is the simplest part. You might be surprised, but you must know what you are paying. You have to know how to recognize the highest quality trades. Let’s see the distinct components of high and low-quality trading. A high-quality trade setup provides a quick sharp movement in the wanted direction. On the other side, the average trade will struggle to achieve that. 

     

     

    The chart above illustrates an example of a high-quality trade setup.

    Can you see the price is moving to the north? That provides fewer barriers for short-term side to side support and resistance levels. Hence, there are no obstacles for the price to increase and it will do it quick. Trades that go straight into near-term support and resistance levels can be more inclined to conflict. Hence, it is more difficult to make a sharp move out of in the wanted direction.

    But trades that have more capacity to run and are not promptly interrupted by a near-term support and resistance levels have a better position to bring you to wanted result. 

     

     

    Here is the chart for more evidence. Notice the bearish pin bar. This is exactly what you have to look for when trading pin bars. But a short trade after this formation resulted in a ‘tight’ trade. That was caused by a prior resistance level. That will result in a drawdown on the trade for a short, before finally moving in favor of your trade.

    FEW WORDS ABOUT TRADING STRATEGIES

    The main difference between trading and investing is that a trader explores out market changes for profit. On the other hand, an investor tends to profit from long-term price changes in the assets. A trader will make numerous trades over one week, the investor will buy and hold for years.

    The first move in building your trading strategy is to have a trading plan

    Financial markets – Important guide for beginners 20

    The trading plan is like writing a business plan for some entrepreneurs. A trading plan will help you to make a realistic decision in periods of rapid market movement when your emotions might lead you to make impulsive decisions.

    The trading strategy should include specific goals such as: getting out of debt, retiring early, making your first million. Also, your trading strategy should include your asset allocation and diversification moves.  

    As a beginner, you should have up to 5% of your trading funds on any single trade. Make sure your trading strategy contains a mix of fundamental analysis of global events, like wars that impact oil prices.

    But also technical analysis like trading rules based on price and volume transformations. It is important because you can use this information to determine your entry into trades, your exit when the trade goes your way, and your escape when the trade goes against your plans.

    For you, your best interest is to incorporate stop/limit loss orders into every trade you place.

    New traders can use technology to lower the entry barriers to trading by automating many of the activities.

    HERE ARE SOME OF THEM:

    * Trading bots 

    This is simply computer programs with instructions based on a predetermined set of market indicators and parameters.

    You can use automated trading systems to trade stocks, options, futures, and foreign exchange products.

    Financial markets – Important guide for beginners 21

    It is based on a predefined set of rules, which determine when to enter an order, when to exit a position and how much money to invest in each trading product. Trading bots are especially helpful to beginner traders and sometimes, a bot can be an important market ally for reducing your losses.

    * Stock screeners 

    That can help you filter the stocks in the market to narrow down potential winners before their big breaks.

    Financial markets – Important guide for beginners 22

    This will help you identify top gainers and losers, stocks on turbo momentum, and stocks that are about to break out above resistance or break down below support lines.

    * Social trading

    This is simply a type of trading in which traders rely on user-generated financial content, collected from a variety of networks.

    Financial markets – Important guide for beginners 23

    Social trading provides you the platform to be part of a community of successful traders and you can purify the wisdom of the crowd and make you able to make your own trading decisions.

    WHAT YOU HAVE TO REMEMBER ABOUT FINANCIAL MARKETS 

    Always use a trading plan, don’t underestimate the importance of a trading journal, change trading strategy after every trade. Test your trading skills on a demo account in a social trading environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real financial markets, you’ve had the practice you need.

    How do financial markets help you? Speaking about financial markets, you must know a few things.

    First, there is no quick and easy money. If that is what you want, you should get to the casino.

    Second, education is crucial. Without it, you will never become a great trader.

    Third, be aware. Scammers are lurking around.

    Financial markets perform an open and regulated way for companies to get the capital. This is done through the stock and bond markets. Also, the financial markets support these businesses to balance risk. Further, the financial markets are public. They consider all available knowledge about everything traded. So, we can say, the financial markets are placing where companies can find the buyers or someone willing to sell.

    We hope you enjoyed this article about financial markets. It was made for a total beginner in the financial markets. We tried not to use too many complicated terms, and for those – you will have to buy our other books and courses.

    Be smart, invest only as much as you can lose.

    Our Facebook page Traders Paradise Facebook 

    and find us on Twitter Traders-Paradise

    We are preparing a lot of surprises for you.

     

     

  • Forex market – The differences with other markets

    Forex market – The differences with other markets

    3 min read

    Forex market - The differences with other markets
    Forex market and other markets have more differences that you can imagine. The difference may appear to be great between the forex market and other markets. But this is not to suggest that they are similar. Not many of the experienced traders have dared to crossover the boundaries of their trusted market domains unless they made sufficient preparations and studied the new market. 

    Can someone who profitably trades shares also make money with forex?

    The answer is yes. But with some hints on trading style. Also, with a recognition of the differences between the two types of market.

    The forex aims to favor short-term trades.

    Unlike stocks, futures or options, currency trading does not take place on a regulated exchange. It is not controlled by any central governing body. There are no clearing houses to guarantee the trades. Also, there is no arbitration panel to decide disputes. All members trade with each other based on credit agreements.

    Let’s see how the forex market differs from stock markets.

    Forex market - The differences with other markets 1

    So here are the differences between the Forex market and others.

    1. The forex market is 24 hours opened, unlike the stock market. It is not a country or geographically particular specified. Major markets open in Tokyo. When it closes, London takes over and then the New York market goes live till the next day when the Tokyo market opens again. This kind of continuity isn’t available in case of stock trading.
    2. Forex market is the global largest exchange market. Not even the transactions of the entire world’s equity markets’ put together can meet this. The liquidity is never questionable, for example.
    3. The equity market is ruled by a number of technical and microeconomic parameters and indices. In the forex market, there is no such thing.
    4. The above point also characterizes that the concept of single exchange trading as nullified and what takes its position is over-the-counter trading.
    5. There are no commissions to be paid to the brokers. The reason is simple. Traders are directly dealing with currency.
    6. Currencies can decrease over long periods but can never be zero. This is an extremely incredible situation in the forex market. The traders can hold their short positions for as long as they possibly can without the danger of getting their capital wiped out.

    Forex market - The differences with other markets 2

    More differences 

    Concentration

    On various stock exchanges around the world, there are hundreds of large companies with shares that are very liquid. On the other hand, for example, the S&P 500 or FTSE 100, there are only three major currency pairs: EUR/USD, USD/JPY and GBP/USD.  But, USD/CAD, AUD/USD and USD/CHY are also very prominent pairs and they take place in the forex market.

    Spreads on these main pairs are the closest. Hence, they are the most suitable for day traders and scalpers because the transaction costs are lowest. However, for longer-term traders, attractive possibilities can occur nearby more exotic currencies such as NOK, SEK, SGD, and NZD. But, spreads will be wider on pairs involving ‘exotics’ as liquidity is much lower.

    This concentration gives traders the possibility to specialize. For example, some will only trade EUR/USD or GBP/USD and become skilled on just one of those pairs.

    Stock market traders can decide to specialize just in a few very liquid stocks.

    However, those strategies also typically involve having to monitor the major equity indexes. There are software programs that can locate those fast-moving shares, but a lack of specialization in those stocks can leave traders open to making losses.

    Trading in the Forex market is cheaper

    The spreads on the major currency pairs tend to be wedge thin and closer than on stocks. This makes for cheaper transaction costs, which is important. Moreover, there is no commission to pay on forex trades. Maybe that’s the reason why the forex market is many times bigger than the world’s equity markets.

    Also, competition between forex platforms is powerful.

    Shorting stocks through stockbrokers can be difficult and very costly.

    However, shorting stocks can be very dangerous and far more so than for currencies. Consider shorting the stocks of a company where a takeover bid is announced after trading hours. That means a trader can’t cover their short position until the market opens again.

    Takeovers regularly happen at a premium to the day’s share price. It’s not unusual for shares to rally 40% even 100% under such conditions. That can destroy a trader’s capital, especially if leverage is involved.

    Higher leverage and lower transaction costs provide the possibility to trade successfully with less capital than required for stocks.

    The Forex market is different from other markets in some other key ways too.

    Think that the EUR/USD is going to go downward? Short the pair!

    There is no uptick rule in Forex as there is in stocks. There are no limits on the size of your position.

    For example, if you have enough capital, you could sell $200 billion worth of currency.

    More benefits, if you get information that the Bank of England is planning to raise rates at its next meeting, you could go right ahead and buy as many pounds as you like.

    No one will ever sue you for insider trading should your bet pay off. There is no such thing as insider trading in Forex.

    In fact, some countries economic data, are often known days before they are officially released.

    But remember that Forex is a leveraged product. Hence, there is a great chance that you will incur more losses because you can control a large amount of currency with a small margin.

    For example, a 1:200 leverage means you will receive $200 in your account for every $1 you invested. If you invest $1000, you would be able to control $200,000 worth of currency trade.  Money management is important to profit in Forex trading. You need to plan your risks, learn how to apply stop, losses and practice diversification in your trading practices.

    The bottom line

    Forex traders are closely watching the price changes, the volume of trades over time. It is important to take note of the price patterns to determine buying opportunities and risks. It is also important for a trader to understand the intrinsic risks, read the disclosures before making a trade.

    risk disclosure

  • BMW and Toyota could leave UK after no-deal Brexit

    BMW and Toyota could leave UK after no-deal Brexit

    1 min read

    BMW and Toyota could leave UK after no-deal Brexit

    Car producers Toyota and BMW have both warned that no-deal Brexit could affect on the production of their cars in the UK.

    BMW told Sky News it could consider moving production of its Mini from the UK in a no-deal scenario.

    Previously,  the head of Toyota’s European operations said a negative result could put future investment at its UK factory at risk.

    Company bosses lose trust in the UK economy because of Brexit uncertainty.

    Toyota’s factory near Derby is at risk, said Johan van Zyl to the BBC, and added, if the Brexit “hurdles” are too high it would undermine Toyota’s competitiveness.

    BMW has said it might stop making the Mini at its Cowley plant in the event of a no-deal Brexit. That would put more than 4,500 jobs and more than 100 years of car-making at the site at risk.

    The German BMW joined Toyota and Vauxhall owner PSA in an attitude that an uncontrolled exit from the EU would cost British workers their jobs. And, the Geneva Motor Show (Thu, Mar 7, 2019 – Sun, Mar 17, 2019) is coming with the UK automotive sector under murky water.

    No bridge over troubled water

    BMW board member Peter Schwarzenbauer told Sky News that the future of the Mini brand in the UK was under threat in the deficiency of a Brexit deal.

    By the way, he is responsible for the Mini and Rolls-Royce brands.

    Also, he added, if a “worst case” no-deal scenario happened, “we would need to consider what it exactly means for us in the long run”.

    “For Mini, this is really a danger,” he said.

    Schwarzenbauer said the firm would “need to consider” moving production from the UK as the company could not absorb the extra costs they would inevitably face.

    He also told the Reuters news agency at the Geneva car show that engine manufacturing, at Hams Hall in Birmingham, could be lost to Austria.

    Previously, BMW chief executive Harold Krueger told the BBC that the carmaker was preparing “for a lot of scenarios” and was “very flexible” in its approach to production.

    In the group with BMW is Toyota too

    One of Toyota’s executives has warned a no-deal Brexit would make it “extremely complicated” to build new models at its British plants.

    The signal by Japan’s biggest carmaker that no deal would make it less likely it would manufacture additional models in the UK follows Nissan’s recent reversal of a 2016 decision to build a sports utility vehicle in Sunderland and Honda’s planned Swindon closure.

    It also comes against a backdrop of steep falls in investment in the UK car industry.

    “If we don’t have access to the European market without a specific border tax, it seems to be extremely complicated to think about . . . introduction of another model,” Didier Leroy, chairman of Toyota’s European operations, said to the Financial Times.

    Toyota has two factories in the UK, employing about 3,000 workers at its vehicle manufacturing plant in Burnaston and its engine production facility in Deeside in North Wales.

    Where is the risk for the auto industry if scenario no-deal Brexit come true?

    One risk of a no-deal Brexit is that British-made engines will no longer be counted as EU content.

    These car giants could move some production of engines out of Britain if the country does not secure an orderly departure from the European Union.

    Britain, the world’s fifth-largest economy, is due to leave the EU on March 29 but an agreement between London and Brussels has been rejected by UK lawmakers leaving open the possibility of a chaotic exit that could hit trade.

    What is the possible scenario?

    March 12, 2019: UK lawmakers will vote on new deal terms of the UK’s departure from the EU.

    March 13, 2019: In case the deal is rejected, lawmakers will vote on whether to leave the EU with no-deal.

    March 14, 2019: If lawmakers reject a no-deal Brexit, they will probably seek a delay to the U.K’s separation from the EU.

    March 15, 2019: Two-day summit will start. EU leaders will meet to analyze the state of the Brexit process.

    March 21, 2019: The UK is listed to leave the EU.

    The bottom line

    The fact is, this is the battle of nerves. In light of the possibility that BMW and Toyota, along with other investors who proclaimed that will leave the UK, the economy of Great Britain could drop hard. The state of suspense will not stay so long. The date of decision is so close.

    Don’t waste your money!

    risk disclosure

  • Trading With Signals – Full Guide on How To Trade with Signals

    Trading With Signals – Full Guide on How To Trade with Signals

    Table of Contents

    Trading With Signals 28
    by Gorica Gligorijevic

    This tutorial, Trading With Signals, will show you all types of trading signals, no matter if they are Forex, market or stocks.

    The most important, Traders Paradise wants to show you how to pick, how to select, how to use trading signals.

    But also how to recognize signal seller scammers and the best signal providers.

    What are the benefits of using trading signals

    The benefits of using them include better trade results in a shorter time.

    If you would rather trade online, you will find developed electronic trading. They use standard trading sources and analytical programs using technical indicators. That can help you to catch more profitable trades and grow your account.

    Electronic trading platforms use crucial indicators to help you to monitor the market. How does it work?

    The trading platform sends the signals to your phone, tablet, or computer to provide you to act immediately.

    Forex signals are extremely useful for all of you with limited time to analysis or if you are a new trader.

    What trading signals are

    The trading signal is an alert that you receive, letting you know that it is time to long or short a market.

    A trading signal isn’t executed automatically.  That means you’re able to take the time to analyze the market yourself. And later, decide whether the risk profile of the particular trade fits into your overall trading strategy.

    The fact is, making money is fun and sexy while the process of making it may not be so sexy.

    But we took some facts to show you how incredibly sexy trading with signals is.

    So, Traders Paradise’s primary goal is to show how to use the trading signal for your own benefit.

    Trading with signals can give you an advantage.

    They will alert you to unusual volumes, options, activities. Sometimes it is a great challenge to find a real run from a genuine trader, to be honest.  The biggest advantage of a stock trading signal is the rapidity of the decision. Many traders find themselves stuck with analysis and never really know when the best time to buy a stock.

    Stock trading signals remove your emotion and hesitation that trading stocks can cause. 

    Signaling is based on the idea of asymmetric information, which is a deviation from perfect information. This means, in some transactions, disparities in access to information upset the normal market.

    The market can send out powerful signals.

    Forex signal will provide you everything a robot does but without the execution of trade entries.

    Besides this, you can find, a professional trader to generate trading signals for clients.

    They are unified information from technical analysis tools, like currency pairs for example. Trading signals will help you to make the right prediction and execute a successful trade at the best time.

    But you have to know one fact, with using the trading signals you don’t have a guarantee that you’ll make a profit from your trade. The point is to increase your chances of trade. That is exactly what trading signals will give you.

    Of course, especially if you mix them with other methods of technical and fundamental analysis.

    You may ask if trading signals work. The answer is Yes!

    And in this tutorial Trading With signals, our author will show you how.

    He will give you numerous instructions on how you can use trading signals, who are trading signal providers, how to avoid signal provider scams.

    What are the trade signals?

    Trade signals are simply an alert based on technical indicators, that it is a good time to buy or sell a certain asset.

    If your signal provider believes an asset will go higher or lower, he or she will contact you through a message, email or software. Your choice is to follow or not. Trade signals may come in different forms. It can be bull or bear pennants, rectangles, triangles, and wedges, also, head-and-shoulders chart patterns.

    Trading With Signals

    Bull pennants

    Trading With Signals 1

    Bear pennants

    Trading With Signals 2

    Rectangle Signal form

    Trading With Signals 3

    Triangles Signal form

    Wedges Signal form

    Trade signals may also bring attention 

    You will receive the signal when the trading system determines all rules for a new buy signal are fitted. So, you can place buy order.

    Stock trading signals are based on technical analysis.

    What does it mean?

    Technical analysis is research on price action.  An example of a stock trading signal. A company was given a new buy trading signal, let’s say in April 2018. The buy recommendation signal for this stock looks very profitable. With potential gain over 150% in a few months, it is clear you will follow this signal. Another incredible stock trading signal came in July 2019 on another company but the same industry. A gain is over 300% in only 60 days. 

    What you have to do? To follow the signal, of course, and buy the stock.

    But let’s see the other example. You got a signal that the stock price of some company will decrease up to 250% in the next 6 months. Will you hold that stock until the D-day? Off course not. You will sell that stock as fast as possible and reduce your potential loss. The point is that you will receive the trading signal only and just only when all criteria are met. 

    Using signals in volatile markets can help you to point out opportunities and also will signal you if they disappear.

     

    Trading With Signals 5

     

    There are many types of signals systems.

    We can define the type of FX signal by the functions it has, and the way it operates. Manual and automated Forex signals are permanently available in the Forex market. So, we can easily interpret them as the main types.

    You can find some for free, others for a fee. Remember that a trustworthy service should provide you information about profiting and stop-loss, also.

     

    Trading With Signals 6

     

    A forex signal is a proposal for entering a trade on a currency pair. It has to show you a specific price and time. The signal is provided by a human analyst or by automated Forex robot if you are a subscriber of the forex signal service. Signals have, let’s say, timely nature. So, it is very important to receive them fast and smooth. You can do that via email, website, SMS, RSS, tweet or other direct methods.

    The signal providers are focused on sending signals based on technical analysis. Such signals will show you short and long-term price trends. A minority of signal providers work on fundamental analysis or price action, meaning gives extremely short-term trade ideas. It is useful for scalping, for example.

    The signal in the stock market is developed by George Lane. It is an indicator that estimates the connection between an issue’s closing price and its price range over a predetermined period.

    George Lane (1921 – 2004)

    A short note about George Lane (1921 – 2004).

     

    He was a securities trader and technical analyst, among other activities. He developed the stochastic oscillator (also known as “Lane’s stochastics”). Today it is one of the main indicators used by technical analysts. George Lane’s described his famous indicator: 

    “If you visualize a rocket going up in the air – before it can turn down, it must slow down. Momentum always changes direction before price.”

     

    This is very important because you have to understand how to use the indicators in Forex trading. You have to know how to determine the best entry and exit points for your trade. 

    So, stochastics includes two elements: %K and %D.

    %K is calculated with this formula:

    C is the most current closing price

    L14 is the low of the 14 past trading periods

    H14 is the highest price traded through the same periods

    %K is the current rate for the currency pair

    %D is a 3-period moving average of %K, called %D

    The idea is: as the price of security progress, the closing price will drop closer to the highest point during the trading period. When the price drops, the close will come closer to the lowest low. 

    Momentum always changes direction before price.

    Hence, Stochastics sets up at or before the final price low.

    This method reveals price turning points by comparing the closing price to the price range.

    The stochastic is settled by default as 14 and 5-days sessions.

    Here is an example of the 5-period stochastic oscillator 

     

    %K = 100 * (Price – L5) / (H5 – L5)

    %D = ((K1 + K2 + K3) / 3)

     

    Where H5 and L5 show the highest and lowest prices in the past 5 days. %D is the 3-day moving average of the %K (the last 3 values of %K).

    There is only one strong signal when you work with %D alone. It is a difference between %D and the examined security.
    Stock trading signals are simply the implementation of a trading system or method.

    The actual signal is given when a traders system determines all criteria necessary for a new buy signal are met and a new buy order can be placed by the trader.

    Stock trading signals are most often associated with technical analysis, which is a study of price action and derivatives of price action.

    An illustration for a technical analysis price indicator may be a Moving Average or MACD. There is a thousand method that stock signal may be given.

     

    Trading With Signals 18

    An example of Moving Average

    Trading stocks can be extremely profitable when you find trading signals that are confirmed as effective. Stocks signals may help you to predict the market. Investing in stocks with real trading signals is easy. The signal will be sent straight to your device, your app will get live rates on different assets.

    How does stock signal app work?

    The software scours social media and accumulates posts, comments, etc that include keywords of interest.

    All data is filtered to produce impressive statistics. To tell you the true public opinion, giving an in-depth insight into public minds. It doesn’t matter if you are using chart patterns, indicators, or whatever, the signals will determine the time to enter or exit a trade. 

    Let’s say you are a swing trader. And you entered the trade at the right time, just when the price started to move in the right direction. Yes, but you would like to know when the price will reach its turning point. Because you will like to exit the trade just before it.

    Reversal chart patterns can be very effective to identify the point at which price direction is going to change. That will allow you to exit the trade before the trend reversal. 

    Stock trading signals also provide you information into situations in which you would like to analyze either hedging or increasing a position. Hedging means taking a position to offset a possible loss. 

    Market signal

    The market signal is hint or information stated quietly and very often without particular intention between shareholders and other participants in a market.

    For example, a firm issuing bond indirectly indicates that it needs capital and that there are reasons (such as the desire to retain control of the firm) for which it prefers loan capital over equity capital.

    Market signals are based on political, economic and market conditions. So, by using them you will not make a trading decision on rumors you will do it based on facts.

    That is a kind of advertisement in which the main aim is to inform the trader that a particular enterprise has more advantage. The market signal is any activity of rival. You can find two ways to deliver market signal: send news and activity. The main goal of the market signal to make the customer think that the company has more strength in comparison with other rivals.

    The rivals have different motives. In order to decrease the market price of competition some can reduce the product’s prices, that is a competitive signal. Or, they can announce adopting new engineering technology. That is an example of indirect target news with a purpose to decrease the strength of the rival company from the same industry and, as a result, it’s the rival’s stock price will drop on the market. The reputation in the market increases when some company’s sales increases and vice versa.

    All those news are market signals.

    Let’s take a look at the experts’ definition.

    In contract theory, signaling is the doctrine that one party credibly sends some information about itself to another party.

    For example, in Michael Spence’s job-market signaling model, employees send a signal about their ability level to the employer by getting educational credentials.

    Trading With Signals 8

    The informational value of the credential appears from the fact that the employer believes the credential surely has greater knowledge. Also, the employer could think that low ability employees are unable to reach.

    Can you see how the credential lets the employer to surely discover low ability workers from high ability workers?

    The same comes to market signaling. Signaling is based on the idea of asymmetric information which states that in some economic transactions, inequalities in access to information upset the exchange.

    .

    Trading With Signals 9

     

    Let’s assume that two participants in the market could meet the problem of asymmetric information when one of them send a signal that would expose some part of the relevant information to the other participants. That would cause an adjustment in buying behavior. The other side may offer a higher price, for example. In case they didn’t receive the signal, everything would stay the same. There are, anyway, many difficulties that these participants would immediately run into. But…

    So we can say, the market signal is any activity by a rival that gives a direct or indirect sign of its intentions, motives, goals, or situation.

    Forex signal

    Forex signals behave like a trade alert for the currency market.

    In Forex, trading signals are used by traders all over the world. They help them to make crucial decisions about trades.

    Trading signals in Forex are one of the most valuable tools you can have. Almost all traders prefer to use them because they can profit from proper signals. A trading signal is completely a suggestion of when and how to trade. The information is based on special price analysis. The trading signal is commonly formed by an expert or it is formed by the program which uses multiple technical indicators.

    By using a trading signal you will be methodical. All you have to do is to find a trustworthy source that is compatible with your trading strategy. Find a signal provider able to provide the individual support, and a ‘strike rate’ of previous signals.

    Trading signal has to show you the entry point.

    Your entry point shows you the price level at which to open a trade on the forex pair. The signal must show the level which will trigger market activity and it will be your entry point.

    Some signal providers will automatically create the order to open a new forex position if the price hits the settled level. That is a great advantage because you don’t need to be in front of your device when the entry point is breached. The other choice is to set a price alert at the entry point level. Then you can manually open a trade when the alert is triggered.

    Trading signal has to show you the exit point.

    A good trading signal must provide you with two exit points. It must indicate where to close every position formed as a response to the signal. This means it must show the stop level and the limit level. The limit level is where you could make a profit.

    The stop level is important information because it is the point where you have to close the position if your trade is moving unfavorably. That will protect you from taking a loss. 

    The limit level will show you the point where to close the position if the trade is moving in your benefit. That will secure your profit. 

    For example, the signal could indicate a short-term price rise will result in a reversal. Well,  you would like to pick a profit at the peak of the rise, just before your earnings go reversal.

    Stop and limit levels are an essential component of your trading plan. That’s why the good trading forex signal must have the exact information about them.

    Trading With Signals 10

    It notifies traders when to enter or exit a trade.

    Signals can be recognized into three groups:

    News trading signals
    Technical signals
    Real-time trading ideas – Webinars

    The first one in the list is the fundamental approach to Forex signals. This signal aims to get the news release as quickly as possible and provide a trader to gain the maximum level of profit in a short time.

    Forex signals often come with daily or weekly commentary and analysis.

    Technical trading signals are simply trading tips on the basis of technical analysis.

    Trading With Signals 11

    That means you trust the experience and follow the record of the signal provider. You are sure it is the best Forex signals service. You may prefer to trade on this data rather than to open trade on your senses.

    Technical Forex signals are usually given along with various risk management strategies. The purpose is to guarantee minimum losses if the plan does not act as it was originally supposed.

    Most online Forex signals have this feature. So, searching for the best Forex trading signal provider can be a much harder and longer task. General knowledge of Forex signals may help you in finding the best Forex trading signals provider. Forex signals can be received from many firms that have this service. Also, you can get them from top Forex brokers. They provide them for other traders.

    Forex signal is an impulse for entering a trade on a currency pair, typically at a specific price and time. The signal is produced either by a human expert or an automatic Forex robot.

    Forex signals must be timely. So you will need some very fast communication. You will receive the signals via email, website, SMS, RSS, tweet or other comparably quick methods. And you can find a lot of them for free. 

    To find the best for you, try to search: best free forex trading signals, free forex signals live, live forex signals no registration, free forex signals providers, free forex signals online in real-time, free forex signals software, etc. Services that you get by signing up usually vary from provider to provider. You can receive almost anything from performance trackers, email, or SMS alerts, customer support via email or phone and, of course, advanced analysis.

    Forex signal providers must protect their strategies. That’s why trading with them always means full trust, to some degree.

    Forex signal providers fall into four categories:

    Free signals
    Paid signals from one provider meaning personal or algorithmic analysis
    Paid signals collected from many signal sources
    Signals provided by trading software settled on your computer, that is a forex robot or Expert Advisor

    What are the main services offered by forex signal suppliers:

    • Accurate or approx entry, exit, and stop-loss numbers for trades on one or more currency pairs
    • Graphs and analysis for the signals
    • Trading records with the number of pips profit/loss and the risk/reward ratio and real trades for one month.
    • Personal mentorship, or additional communication with the signal provider 
    • Account management whereby a signer’s account can be traded by the signal provider
    • Educational resources, over the internet or phone
    • A trial period for a lower price

    These are the main features of a signal supplier, but all of the services don’t offer the complete list of services.

    Are you going to use Forex signals or not will depend on your personality and trading plan, right? 

    In case you are a highly active individual with little time to spend on a thorough analysis of the market, Forex signals offer an alternative to manual trading.

    If you want to learn the mechanics of trading in detail, you will get a very modest benefit from subscribing to these MQL5 Forex alerts.

     

    Trading With Signals 12

    The appliance of signals depends on your level of proficiency in trading, your expectations and main goals. But there is one discouraging factor concerning Forex trading signals –  the high price.

    Stock trading signal

    Trustworthy stocks signal providers can help you to predict investing in stocks. They will send you the live trading signals straight to your device. You will be able to get real rates on different assets.

    The advantage of using stock trading signals is the speed of the decision. Many traders find themselves stuck with analysis and never really know when the best time to buy into a stock trade is.

    Stock trading signals remove the trader’s emotion and indecisiveness that trading stocks can create for individuals. Besides, to buy signals, every trader should be able to get a sell signal from the system which is used.

     

    But some traders don’t think that is necessary to use stock signals.

    And they are pointing at several reasons. They claim there are several tools that a trader can use to get a good idea about future stock movement. But they are talking about tools, you should keep it in your minds. Because even if tools indicate one thing, there is no guarantee the stock will move in that direction.

    Others claim, if you’re paying a subscription for a signal service now, the only sure winners are the signal providers. On the other hand, if someone somehow miraculously came up with an algorithm that generated enough income consistently that gave you enough confidence to leave your day job, why would such need to offer it to the public and risk weakening that working strategy? The answer is that one wouldn’t because such one would already make enough money from the signals.

     

    Trading With Signals 13

     

    Those traders believe that signal providers just make money from other traders or they should be among the richest thanks to their signals.

    Learn trading but not lean on trading is the point of their views.

    I think that you should answer this question for yourself and find what suits you and your trading goals. If you are planning your first start off with stock trading, you may have no ideas of how to make use of trade signals. You should read a couple of resources and do some research yourself to come up with the right trading signals.  Also, you should open up your browser and start searching online for the best and reliable signal providers. And you should check out some forums where you may see people were supporting some site or not. You can feel a bit more confident and opt for some services.

    That’s the small effort for good trade signals.

    The market can give information on whether the company is valued as a going concern or based on some anticipated breakup value. By interpreting market signals, the trader can compare its expectations with the market. More importantly, the trader can better evaluate its operational and financial alternatives. Brought together these findings into a “market signals approach” may provide a systematic way to interpret market expectations.

    The market can send out powerful signals.

    Signals are price-related effects in stocks. New signals are calculated in real-time, triggering any information that has been set.

    The signals help identify clear breaks to new highs or lows. It’s also a useful way to find stocks on the move. If you use the signal provider service you must receive information about sharp moves in price and volume. They have to send you such information within 5 minutes.  Don’t pay attention to spikes in the first few minutes after the market open. It is a normal volatility. This reliable signal covers trades at or near the bid or ask. It has to be a fairly active signal with dozens of signals per hour.

    You must know if someone is eager to take a large bet on a stock.

     

    Stocks may be stopped during any session. Sometimes it can be due to volatility but sometimes because news is waiting. You have to know right away when a stock is stopped or continued. Your signal provider must send you this information, the signal must contain it. Maybe it is a good option to turn on voice notifications for your signal provider.

    Further, they have to send you information about session highs and session lows. In other words, you must have a high volume signal that will be triggered whenever stocks hit a new session.

    Why is this so important?

    When the midday comes, the market is very slow. So, with the described signal, you’ll be able to see the stock making fresh session highs or lows. That is a great opportunity because the stock that makes the fresh session highs or lows are in the game and can provide you fantastic trading gains. Also, this is a great signal to see the stock’s reaction on news, for example, statements.  In simple, you will need some chatty signal. So, it isn’t too hard to find a signal provider with that kind on offer.

    And as I said before, the good signal contains the trading history. Whatever I said about forex trading signals is valuable for stock trading signals. For example, you will need a 52-week high/low signal as well as new day high/low signal.

    Do trading signals work?

    The answer is Yes! Of course yes. A successful trader can be a great signals provider, also. They work but you have to follow instructions, do right money management and choose the good signal provider that show real performance, not scammers.

    Of course, there are signal providers who work.

    Some are even free of cost to you, some work on a subscription basis. The problem is to find the right signal on these platforms.

    Yes, they do.

    They work.

    But it has to combine with the overall market scenario as well. Information about the happening in all financial levels is important to completely trust a trading signal. Trading signals always need a stop loss to be placed while following a signal.

    They have to be assistance, not reliance.

    You should never follow trading signals blindly. Always do your research before investing in any asset class be it forex crypto or stocks. Signals should serve as a good help for trade setups and you should never follow signals blindly.

    That helps!

    For example in Forex trading.

    It is possible to find many courses for FX signals. There are a lot of websites that are dedicated to such a service, and social media makes it possible for people to share Forex signals free versions and premium versions.

    There are three main groups of people that are responsible for sending such signals out:

    Traders
    Affiliates
    Scammers

    And you will see, many of them are scammers but a very few honest people are still out there.

    Trading signals work as indicators of when/how to act. You need to know how to read signals. Trading signals come in a mixture of designs and can point the important details.

     

    Trading With Signals 15

    Bear/Bull Trading Signal

    Why an investor must know how to read these things?

    For the same reason, drivers have to learn how to recognize road signs: if you don’t know what the signs mean, you could end up ruined. Forex signal trading cannot be taken lightly. It is home to a rapidly changing environment where some online brokers manipulate the original data feed to cause errors in the marketplace and earn a profit over them.

    We show you these groups in the order in which they can be trusted.

    It is common to find traders that are looking to share their ideas with the outside world. Their main aim in doing so is to earn a reputation of being a good trader, help out other people, and simply support the place that was once supporting them when they were new to FX trading. Regularly is possible to find traders that are sharing Forex signals free on many forums. What does such a trader, signal seller work? Traders try to send reliable signals by performing their analysis and providing the same information that they are using in their trades.

    Affiliates represent another group of signal providers.

    You can get free daily Forex signals from this group once you have signed up for an account with a broker using their affiliate link. This way affiliates can still make a commission on the trades you make, but the signals remain free to you.

    However, not every person has enough time to support both his affiliate business and his trading activities, so you should be cautious about this group of signal providers. Sometimes the quality of their signals may drop because they put more emphasis on their own promotion. But you can still treat such signals with a decent level of trust. And remember, it is a must to have former testing of their daily free Forex signals on a demo account.

    Scammers are the people you should be avoided, because they are only interested in making an affiliate commission from you, or just making you purchase their ‘free’ signals. They usually employ pretty obvious methods to fascinate clients.  These artists will give you a few free Forex signals but later, they will ask you to buy premium signals. When you have signed up for free, they will send fascinating signals. Don’t be naive! They will do the same to the other people that have signed up. Some of these people are going to receive BUY orders, others will be provided with SELL orders. This way a scammer can split his audience in half. The first 50% is going to be profitable and the other 50% will be losing.

    So do not fall for scams, as they cannot deliver anything close to the best free forex signals.

    Some trading signals/strategies work very well as long as they aren’t “overused”. You can have a go with them and see if they can produce what they claim. They have to let you know the result.

    If they can’t, never subscribe to that signal service!

    Is copying Forex signals feasible?

    Forex signals are a wonderful choice for people who do not like or want to make trading decisions on their own. Maybe they don’t have a lot of time to trade or want to modify their own trading endeavor with signals from a pro? There are so many reasons why some trader should choose forex signals.

    A lot of people promoting Forex signals services, in order to oversimplify the signals following process. They make it sound so simple and effortless. But the signals follower quickly becomes frustrated when finding out it is not as simple.

    What can you expect from your signal provider?

    The good thing is that all of them will give you some kind of instructions on how to perform. The same comes with copy trading. With some providers, it is as simple as 1, 2, 3. For example, try with one of our partners.

    Do Forex signals work 

    It depends on what you want from your Forex signals.

    • If you want to turn $200 into $15,000 in a few months?  No, Forex signals will not work for you.
    • If you want to win every trade, every week and every month?  No, Forex signals will not work for you.
    • It will work if you want to systematically participate in the Forex market over the long term and slowly grow your wealth.

    Yes, Forex signals can work for you if you choose the right service.

    It is unbelievable how many signals services are impossible to follow in the real world and how many signal followers have unrealistic goals when joining a signals service.

    Let’s put this in some realistic frame.

    Real signals providers have to go through a test period. Providing signals for other traders take some responsibilities. They must provide personal data, for example, personal and last name, passport copy, address, contact info, etc. It is needed in case of any conflicts between a subscriber and a provider. This data are known only between those two parties, subscriber and provider.

    You will recognize the valuable signal provider if you can see that the signal name is fully specified. Your provider has to specify the type of terminal, is it MetaTrader4 or MetaTrader5, also, he or she has to add a broker’s server name. The information also must contain the number of the account that will transfer the signals and traders password for ‘read-only’ mode. If a signal providers service isn’t free, the provider must have been registered as a provider with qualification, meaning passed some tests and examinations, so he/she can be a signal seller giving original practices.

    And say we have this situation, to show you how exactly your deposit will play via trading signals service with maximum protection for each participant. 

    Let’s examine a specific example.

    Provider’s balance is $20,000 , leverage 1:100
    Your balance is $50,000, leverage 1:200, deposit load percentage is 50%
    And assume you are betting on EURUSD currency pair where the exchange rate is 1.1047.

    Your balances ratio regarding the defined part of the deposit in percentage terms is

    (50 000 * 0,5) / 20 000 = 1,25 (125%)

    Let’s examine the leverage. Your leverage of 1:200 is greater than provider’s which is 1:100, hence it isn’t necessary to perform the correction on leverages.

    Currency rate of the deposits at the moment of calculation:

    1,25 * 1,1047 = 1,3808 (138.08%)

    After rounding, the total percentage value is 140% or 1.4 ratios.

    Therefore under the settled conditions, provider’s deal with a volume of 1 lot will be copied to your account in the amount of 140% which is the volume of 1.4 lots.

    That’s how Forex trading signals work.

    If you want to have a good experience with a Forex signals service there must follow these two things:

    • You need to use a Forex signals service that is designed so the signal follower can get similar results to the service with relative ease.
    • You need to align your expectations with reality and understand what can and what cannot be accomplished by following a Forex signals service.

    We all know how this can be difficult. The point is that if you don’t have any previous training experience you will not be able to know what reasonable expectations really are.
    We are surrounded by all the hype of quick and large profits and it is really hard not to be misled.

     

    Trading With Signals 19

    An example of a Forex trading signal

     

    But, the simple answer is: Yes, copying forex signals are feasible with one condition: Forex signals can work if you find the trusty service. You need to find the trusty service that you can trade and that realize your expectations. If not, you will constantly be disappointed and keep searching for something better. The best way to figure out if Forex signals work and the service is suits you is to take a trial.

    Types of Forex signals

    Signals are basically electronically transferred bits of information that you can opt to receive via your email on your PC or your laptop, as well as your mobile phone. It is no matter where you are, you can receive this critical need-to-know information.

    Signals inform you of the best times to purchase or sell the asset you are actively trading in. It also lets you know when you should place profit limit orders or protective stop-loss orders that are critical to your financial good.

    Forex trading signals are normally referred to as entry and exit signals. They have to be a result of detailed analysis, research, and tracking. When the signals are transmitted to you, keep in mind that they are only considered as accurate and active for a brief period of time. So, you have to react quickly.

    The type of signal is determined by the specific function it may have and how it generally operates.

    Technically there are two types of FX signals which are permanently available in the Forex market, and they are:

    • Manual Forex signals
    • Automated Forex signals

    When the first type of signal is used, a trader has to sit in front of the computer for a large amount of time, looking for signals to make a final decision on whether to buy or sell a certain currency.

     

    An example of Forex daily signals

    But the most popular type of Forex signal is copy-trading signals.

    The clue is in the name, as to how they work. It involves following the trades of other real traders and copying the trades that they make. There are many different copy-trading signal providers. Traders are allowed to enter the service to become signal providers, but there are usually several specific requirements, such as set trading volumes.

    Other traders can choose to use the platform and follow these signal providers. Copying another person’s trade can happen automatically, or the signal service will send a notification and then it’s up to the individual trader to execute the trade manually, should they want to. It is usual for this type of signal service to charge a subscription fee or take a commission from a trader’s profit. The signal providers who are being followed charge commission on the profits of the traders that are following them.

    This type of signal service has become very popular because all the participants in the business only make money if the traders using the service makes money. The significant about automated Forex signals is that the trader only commands the software to seek what signals to look for. The human psychological pressure is completely removed. There is the software which will automatically interpret what action to choose: buy or sell a concrete currency. Trading in this way can be quite perfect as long as it is done in a proper way and by a genuine expert.

    The software can process much more data compared to a human Forex trader.

    So, you are able to manage several currency pairs at one time. And you are also able to monitor all the charts you desire 24/7 and without missing any significant signals. But the most successful appliance of signals is utilization a hybrid of both types.

    And that is what the most Forex gurus do.

    Trading With Signals 16

    An example of Forex automated signals 1

    This type of signals service doesn’t use real people to generate the signals. Instead, these are automated or algorithm-based signals, which scrutinize various charts and make predictions and can be relatively accurate Forex signals. This type of Forex signal uses the same tactics and strategies a manual trader would use, but there is no human emotion involved, just a set of clear-cut rules to follow.

    Fundamental and technical analysis, along with a variety of indicators are used to uncover any developing trends.

    Trends are predefined and often predictable movements of currency pairs, and once the software has uncovered them it sends a signal to the subscriber and advises them to make the appropriate investment.

    Automated Forex signals can be quite accurate, but historically, not all have proven to offer the same level of accuracy. So much so that a large number of traders still prefer signals generated by a real live human being.

    .

    Trading With Signals 20

    An example of Automated Forex trading signals 2

    But not all automated signals are made from the same material, and some do make relatively accurate predictions.  Many traders, even some of the most advanced, choose to use signals generated by algorithms daily. However, they will tend to evaluate the signal themselves before acting on the prediction.

    Both manual and automatic Forex trading signals can be received online.

    You can receive forex signals from specialized companies and top forex brokers, generally at a low cost somewhere between $5 to $10 a day and more for monthly rates. Trade signals can also be coupled with fundamental analysis. That will give you another protection in your stock trading. Using trade signals can be precious for you. They will point you out good opportunities but also will alert when they may pass. When you want to buy, check first that the signal offers you a free trial. That will allow you to test the information, and make sure it is good quality before buying it.

    To ensure that a trader is obtaining the information that will benefit in the end, they should only cooperate with companies who are willing to provide previous, evaluated results. Moreover, those firms who validate their information are much easier to trust rather than companies who refuse to grant traders a free trial and access to audited results.

    That is without the doubt the policy of top Forex signals.

    But we have to say, fraud can be a problem when dealing with trading signals. As the forex market attracts a wide and diverse audience, the reliance on information for making financial decisions can be a crucial asset to investors. The possibility exists that some trading signal providers will provide insufficient or inferior information at a premium cost to investors, which can impede or damage an investor’s ability to make the best decision they can in the market.

    The best way is to do your own research the trading signals organizations and considering the advantages/disadvantages for each one before making any kind of financial commitment to one of them.

    Read more about automated trading

    Who are Forex signals providers?

    Almost all Forex traders with their trading system dream of founding signal service. Think, having thousands of subscribers getting your trading signals for a $50 monthly fee. That is everyone’s dream.

    So, let’s say, the signal provider is a trader who grants access to the data on his or her trading operations allowing other traders to copy them on their trading accounts. Signals can be provided either for free or on a financial basis. You can be a signal provider.

    To become a Signal Provider, you need an active MQL5.community account.

    Forex signal provider is a trader who trades on his own life or demo account and sends the same forex signals online to his followers. In most cases, this process is automated and takes no time, literally.

     

    Screenshot from MQL5.community

    The signal provider doesn’t have to do anything manually to send forex signals indicator to his copiers. With a wide variety of forex signals services available today it is important to learn how signal providers are selected and ranked.

    There are a lot of platforms that allow anyone to register and start selling signals without any preliminary verification of traders experience, knowledge or ability to manage risks. Since after registration trading results of a signal provider are displayed publicly, users can make their own analysis to determine whether the strategy worth following.

    But there is another approach: the trader must fit certain risk/reward requirements and volatility levels before being accepted as a signal provider.

    This method helps a trader make sure that signal seller only offers reliable strategies and don’t accept high-risk ones for copying. It also fits well into copy trading advice and regulations of many countries. All providers are then ranked based on proprietary Forex signal indicator algorithm that takes into account maturity of a strategy (how long has it been executed for), maximum drawdown, regular profitability, volatility, the average number of simultaneously open trades and many other parameters.

    But, remember that this is an extremely competitive arena.

    Because information is so accessible via the internet, you can receive it anywhere as was mentioned above, so that you have round-the-clock access.

    A Forex trading platform or “hub” gathers the necessary information to transform it into the signals that you receive. An additional safeguard is present in the fact that Forex companies are extremely careful and consistently pay attention to details when sending these signals to the various brokers, dealers, and individual investors.

    Many, many forex traders are looking for quick money, getting rich in several weeks. Some forex signals services may have a good run for a few months and then it’s game over. A lot of these guys use crazy stops and those that do use stops use loads of taking profit orders. A professional service will not give so many take profit orders and tell the subscribers to pick one or do whatever they want with it.

    Being a forex signal provider is measured by consistency. If there is no consistency it is a waste of money. Any signal provider that promises fast money or big profits is lying to you and to itself. No one can guarantee that you will make money, because there are good months and bad months. Selecting the right profitable signal provider is one of the most difficult tasks, especially for the new traders.

    Many, many forex traders are looking for quick money, getting rich in several weeks.

    Some forex signals services may have a good run for a few months and then it’s game over.
    A lot of these guys use crazy stops and those that do use stops use loads of taking profit orders. A professional service will not give so many take profit orders and tell the subscribers to pick one or do whatever they want with it.
    Being a forex signal provider is measured by consistency. If there is no consistency it is a waste of money. Any signal provider that promises money or big profits is lying to you and to itself.
    No one can guarantee that you will make money, because there are good months and bad months.

    Selecting the right profitable signal provider is one of the most difficult tasks especially for the new traders.

    You can find some instruction HERE

    How to pick the right signal provider

    A lot of forex traders use forex signal providers to assist them in profit. Traders who try to make profitable trades can leverage off successful forex traders by copying their trades. Not all the forex signal suppliers out there are trustworthy. Attempting to figure out which ones are scam artists and which ones are genuine can be an awful task.

    Finding a reliable forex signal service can seem like a challenge.

    There are signal providers that are professional and honest, of course. But unfortunately, some providers do not always have their subscribers best interest in mind. It is up to you to make sure that you are working with a trustworthy forex signals provider that you can have confidence in. There are several things traders would consider when are going to pick your signal provider. A trader should be aware that there are a lot of hardcore scammers in the market working very hard to provide fake, low quality and substandard forex signals.

    Most of these hardcore scammers have no background or training in any financial matters and usually feed the trader with performance statistics that are imaginary but yet convincing to a trader who is not smart enough. The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider. This will help him or her in making a proper judgment.

    Another way is by looking at the level of detail contained in the signals.

    If you realize that it just entails a few charts with a loss or profitable line, you will have a reason to think twice before following such signals. You should look for testimonials about various forex signal providers available in the market. Be aware of what other players in the industry are saying about the available signal providers. This will enable you to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered. You should check the number of TPs the providers have in one trade. And, also, how the providers put together the performance statistics.

     

    The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider.

     

    The bottom line is that any trader who wants to be profitable in the long term should start learning by himself or herself about forex signals through experience and self-training.

    How to separate the websites of scammers from genuine suppliers

    Their sites are so similar and competitive. Sometimes you can see forex traders getting in the scammers’ site rather than the genuine forex signal supplier. When they find that the signal is not profiting, they are already passing the point of no return. The scammers had taken the cash and it is past the point where it is possible to do anything.

    These scammers will give you entry and exit signals. But they will not provide you information on how they find the entry and exit points. They want you to follow their signals blindly, that’s all. The scammers will promise you a great profit, a huge return with minimum investments. With all the fantastic promises, you will be motivated to subscribe.

    That is the moment when you will find that whatever you have subscribed to is a pack of lies.

    The types of Forex signal providers

    Forex Signal providers are typically separated into two different groups based on how they generate their trading ideas – technical analysis and fundamental analysis.

    Technical Analysts

    They base their trading decisions on chart analysis including support and resistance levels, candlestick patterns, price channels, market structure, or other technical approaches. Many technical analysts have a proprietary method for analyzing the markets and the highly successful ones have spent many years researching and testing their methodology over historical data and in real-time market conditions.

    Fundamental Analysts

    Who base their trading decisions on economic and news related data. This could be in the form of long-term interest rate analysis, inflation, central bank policy, employment reports, sentiment surveys, and more. Some are longer-term position traders while many others are shorter-term traders that try to catch volatility spikes after an anticipated news release.

     

     

    Some traders may think “reliable” means having a high win rate, but that is not really what you primarily want to be looking at. Actually, win rates are not that important as a metric by itself. You must also analyze the average risk to reward in conjunction with the win rate.

    There are strategies with 90% win rates that can lose money and then there are strategies with 30% win rates that can make money.

    Another factor to consider is the technology the signal provider is using.

    Do they have a reliable platform to send out notifications and are there multiple ways for you to receive the alerts? Something else to look at is the depth of detail that the forex buy sell signals provide. Do the trading alerts always provide stop-loss levels and targets or do they only provide superficial information such as entries but no exit details?

    These are some of the factors you need to consider.

    So how can you find out if a provider is reputable and worth your time?

    Sign up for a Trial

    Sometimes this is the best way to get started is by signing up for a forex signals trial. You may get a real sense of the quality of service by diving in and taking a test drive. Many providers offer a 1 or 2 week trial for members.

    Join their Email List

    Another way to find out the quality of information you will receive from a provider is by joining their email newsletter. You will find the value that they provide for free so that you can evaluate whether their premium forex signals service will meet your expectations

    Check their Track Record

    All reputable FX signal providers will provide a performance record detailing their published trades. This is a good way to find their average pip profit per month, their risk parameters, average win percentage, and other related metrics.

    Google them

    Yes, simply Google them. Are they mentioned in any important trade publications or articles? What type of social following do they have? Do everything possible to find to whom you are dealing with. Just don’t be one of those naysayers.

    Check it, try it, test it and make your own conclusions.

    How to select trading signals

    Your ideas are the most powerful ruler of your trading signals. The right trading signals will guide you through competing jobs. The stock market, futures, forex, and options markets are extremely competitive. The difficulty is that it is not simple to find the best trading signal. Your signals should follow your ideas and your trading strategy. If you don’t pick the right signal, you will have a problem with pulling the trigger. The way you enter and exit the market should follow your trading strategy and be in symphony with how the markets work.

    Your beliefs about the market are the most important determinant of your ideal trading system.

    The first step to ensure you choose a trading signal which matches your beliefs is to define your beliefs about trade setups, entry signals, exit signals, and initial stop losses. Some traders believe that there is no value in using trial and error trying, so they are hoping to find something that works.

    Trading With Signals 23

    According to such traders, trial and error in using a trading signal will result in worthless trading practice.

    That can be true at some point. When you use trials you may notice the curve is fitting to past data. You can get a signal that works very well on past data but doesn’t work for you. So how can you expect it to work tomorrow or into the future?

    Maybe, for that reason, it is better to start with your beliefs and your trading strategy and select trading signals that support these to reduce your chance of curve fitting.

    When you change your approach you can find enormous benefits which included:

    • Greater clarity on objectives
    • Reduced need for optimization
    • Greater real-time profitability
    • Reduced development time
    • Simplified system design

    To be clear.

    The internet is a wonderful tool, but the vast amount of information and companies/people dispensing forex trading signals and advice can be daunting and confusing to newer traders.

    Advanced traders already can recognize what constitutes quality versus hype. No one forex signal service will ever meet the needs of all traders, but a good service must.

    Few trading services post their performance. There are several reasons for this:

    The performance is simply not worth showing as it does little to inspire

    The raw data, no matter how robust, falls on deafened ears.

    The first problem is that seeking for a trading signal that generates a profitable trade on its own is nonsense.

    You can receive the best entry signal ever designed. But, if you don’t have only one part of a complete trading system, you will never make money in the long run. You must have a system with all elements working completely together.

    A complete trading system needs each of the following:

    Objectives
    Setup
    Entry trigger
    Initial stop loss
    Exits
    Money management and position size rules

    The trade entry trigger is just one part of the complete system. Many people also claim that it is the least important part of the system. Entry triggers are the area most predisposed to curve fitting, over-optimization, and the worthless sounds in the market. The most important part is how you exit your trade. That will determine how significant profit you make from it.

    Remember, simple is better than complex. Fewer rules are better than more rules. Follow the KISS (keep it simple, stupid) rule.

    Complicated trading systems with various rules may not perform well in the future.

    Well, it is harder to curve fit a simple system with several rules to past data. On the other hand, if you have various rules and complicated guidance you” be able to adjust your system to the past data with minimum differences. But this will perform useless in the future!

    One trader told me: ”Use simple trading signals that fit your trading strategy and beliefs”.

    That helps a lot.

     And THIS ONE TOO

    How to use trading signals

    When you have signed up with a service to receive online forex signals, you will receive trading alerts via email, SMS or both as you like. You should choose some notification modality that will allow you to receive the alert in the fastest way possible. Many trade alerts are time-sensitive, you know that.

    There are countless ways that you can utilize the issued trade alerts. Depending on your priority, you may decide to follow the trade signal and initiate the suggested trade after you have confirmed that it meets your objectives.

    Many inexperienced or part-time traders prefer the type of hands-off approach.

    Some other traders prefer a more hands-on approach.

    They prefer to utilize the trade alerts as a secondary or confirming indication of their own market analysis.

    For example, short-term traders may take trades using their own system but trade only in the direction of the online trading signals generated by the signal provider. There are many other ways that signal users can use this type of favor to complement their trading.

    How many signals do you need to receive per week or per month?

    That is the most common question. You should be aware that many times it will vary. When volatility in the market is high, you may find that you are receiving more daily forex signals than average, and when volatility in the market is low, you may find that you are getting less trading signals online than average. This is normal and should be expected.

     

    Trading With Signals 24

    Rookie trader wrongly believes that the more often he/she is trading, the more money can earn in the markets. This is a mistake and often the opposite is true. It’s not the number of your trades that matter, it’s the quality of your trades that make the difference between a winning and losing track record.

    Remember, patience is power in trading. It is more important to pick your spots rather than trying to be in the market all the time. Most top forex signal providers are aware of this and act accordingly. You have to consider this and remember that not being in the market is also a valuable position at times.

    Trade signals can be used in the technical analysis where are a major component, but fundamental analysis, quantitative analysis, and economics can also be applied. Beside simple buy and sell triggers, trade signals can be used to modify a portfolio by determining when it might be a good time to buy more of one particular sector.

    Bond traders may have signaled to modify the duration of their portfolios by selling one maturity and buying a different maturity.  It can also help with asset class allocation like shifting money among stocks, bonds, and gold

    There is no limit to how complex a trade signal can be.

    But, traders tend to keep things simple by using only a handful of inputs.

    I have to admit, it is far easier to manage a simple signal generator and periodically test it to see what elements need balance or replacing. Too many inputs would initiate complexity requiring more time and skills. And we all know that complex strategies may become outdated before testing is even finished.

    Using trading signals means that you can trade immediately, as soon as the notification comes. Services will provide you with additional means for trading as well, such as allowing you to do trade through a smart device like a mobile phone or tablet.

    Signals can be hugely beneficial to traders of all kinds, from the most experienced to someone just starting out.

    How to know if Forex Trading Signals is a scam

    The best forex scams are hard to spot, so I want you to be able to identify the most common tricks used by dodgy forex sellers. Most of the scams were interrupted thanks to the enforcement of rules by bodies such as the FCA. But today we are faced with the more advanced scammers.

    Of course, not every forex signal is the scam.

    There are still very reliable services but it can take time to recognize them. First of all, there are so many speeches about scams all around the forex. Don’t believe every word you hear. Just because someone offers poor quality, doesn’t necessarily make it a scam with the intention of cheating you. Think about the intent of the sellers. If all they want is your money without making an effort to deliver, it’s a scam.

    The opportunity of scamming still exists for many forex scams.

    Scammers tempt new investors with a promise of quick fortunes through “secret trading formulas” or algorithm-based “proprietary” trading methodologies. Before choosing a broker or platform, go through your own search.

    Forex signal providers may be an individual or retail firm that promises to trade your account or give you signals to enable you to make a killing out of the market. Some of them will promote their experience and back it up with a few testimonies.

    Some promise very high returns and guaranteed profits, either through a managed account where the firm makes trades on the investor’s behalf or by trading using the firm’s trading platform. Most traders will receive some initially returns from the firm to give the impression that their trading has been a success.

    Scammers will encourage traders or investors to invest more money. But at this stage or soon after the returns stop, their account is suspended and there’s no further contact with the firm.

    Important to know is the fact that many scam firms claim to be FCA authorized.

    How can they do it?

    Many fake trading and brokerage firms will use the title, ‘firm registration number’ (FRN) and address of regular companies and signal providers who are FCA authorized. This is the so-called ‘clone firm’. The fake providers will give you their phone number, address and website details. Sometimes they will claim that a brokerage’s contact info on the Register is out of date. Or scammers might claim to be abroad firm, and that’s the reason they don’t have updated contact and website.

     

    scamm

    An example of scam trading signals

    Some scammers may copy the website of an approved company, and change, for example only the phone number.

    When you want to pick your signal provider you have to check several things.

    Trustworthy Forex signal service should be verified in websites like the Forex Peace Army. Further, you shouldn’t pay more than a few hundred dollars for a good signal system.

    Be especially careful of system sellers who offer programs at excessive prices and claim they can guarantee remarkable results. Choose one of the many legitimate sellers who are decent and whose systems have been properly tested to potentially earn a substantial income.

    Another problem is the mixed funds.

    Without a record of separated accounts, the trader cannot follow the precise executions of their investments. If you don’t check this issue, you are opening the door to scams. Scammers can use a trader or investor’s money to buy houses, cars, and planes or just vanish with your money. They can offer an investor the false opportunity to have his forex trades managed by highly-skilled forex traders who can offer outstanding market returns in return for a share of the profits.

    The catch is, this “management” offer requires the investor to give up control over his money and hand it to someone he knows little about other than the hyped-up and often the completely false record of success available on the scammer’s website and booklet. And the trader or investor often ends up without money, while the scammer uses investors’ funds to buy yachts.

    Still, the forex market is not entirely unregulated.

    Some forex brokers do not deal fairly with their customers and defraud them.

    How does it work?

    They start as an unregulated broker. And they publish the offer of large incentives to recruit affiliates who then bring the clients. Once the broker has a few million dollars in funds, empty the accounts, transfer the money to an anonymous tax haven and shut the doors.

    Hard to believe?

    If some signal seller claims that everything he or she touches turns into gold, don’t trust.

    Trust me, I am rich! C’mon!

    Their model is a fairytale of sales tactics where clients are suckered into a free seminar, then persuaded to buy several thousand dollars courses, then upsold again to a more expensive course. The tactics are so good the clients don’t even know they’re being cheated. The education they provide is nothing you can’t find for free elsewhere on the internet. Pay them to teach you, start trading, and allow them to buy a Lamborghini. Huh!

    Million Dollar Pips was one of the most popular strategies ever sold, but the developer never traded it on a real account.

    How does it work?

    Develop a simple automated strategy that trades a lot with a high percentage win rate. Run it on a dozen accounts using a variety of settings. After several months, pick the best track record and publish to Myfxbook or some other traders community site.

    Develop a sales page detailing how “sophisticated” and “professional” the strategy is. Buy an email list, contact affiliates offering a 50% commission on all sales, then launch!

    A few years ago it wasn’t uncommon for someone to sell thousands of copies of such strategy.

    This kind of scams will fail, there is no doubt. Like any other did.

    Where the warning signs can be found?

    If brokers won’t allow the withdrawal of monies from investor or trader accounts. Or, if it is impossible to withdraw money.

    Also, if enter or exit a trade during an economic announcement is not in line with expectations. And, if the trading station doesn’t operate to your liquidity expectations.

    The best way to determine if a signal seller can benefit you is to open paper money or practice trading account with one of the better-known forex brokers.

    Be patient, and eventually, you’ll determine whether predictive signaling works for you or doesn’t.

     

    The list of the biggest scammers you can FIND HERE on Traders Paradise’s Wall of Shame

    How to avoid signal provider scams

    I think everyone should learn at least the basics of how to spot Forex scams.

    First, ensure you deal with signal service providers originating from locations you have heard of before.

    Second, if they are authentic, their payment method should be one of the common online payment methods such as PayPal or credit card payments.

    Listed here are some of the attributes to look into before following a signal service:

    The signal should have verified records of myfxbook, FPA, and other credible verification sites.

    The rule is, if the results are not verified, just move on do not waste time or money on unverified results.

    In most cases, you will not know on what basis their decisions are made on, so this makes the verification part very important. Focus on signals with over 6 months record of profit and with over 100 trades. If whatever is being shown as results are for less than 100 trades that means the statistics are not sufficient to make any judgment.

    The result should be sufficient to offer statistical significance to inform your decisions. Again if the results are for less than 6 months, then the strategy could just be lucky and with time it may be proved wrong.

    Make sure the signal operates with drawdown levels you are comfortable with.

    This will vary from one trader to the other. Some traders have a bigger desire for risk some have low. If for instance, you take a strategy with 30% drawdown, that means $3,000 could be in drawdown with an account of $10,000 and you remain comfortable. So work with a drawdown that does not give you sleepless nights.

    Don’t just focus on how much a strategy earns, take a look at its drawdown too.

    Get a signal with reasonable performance or subscription fees. When you are paying to a signal service, also check the fee charged is fair. Unless you are doing this to test the strategy, this strategy will only make sense if you have a huge account.

    As we said before, any forex signal service should offer a certain trial period or money-back guarantee. They should allow traders to test before buying. If that is not the case, move on and don’t do not waste your money. If they don’t trust their strategy, why should you?

    Signals should be showing the current open positions.

    A signal may be showing huge profits yet the current open positions are in huge losses capable of wiping the whole account.

     

     

    Just like in most trading scams, the scam will not only be in the service itself but in the manner in which it’s marketed too.

    Most of these scams will promise you a billion dollars, and one has to stop and wonder why aren’t they millionaires?

    Remember most of these fraudsters know that an aspiring user of forex signals will heavily rely on what other users say about the product. They can hire people to review them well. The rule in this game is, make your search. You should check the firm isn’t a clone firm by asking for their firm reference number and contact details and then calling them back. Never use a link in the email from the firm offering you an investment. Always be careful if someone is contacting you out of the blue. If they pressure you to invest immediately or promise you a huge return. You must seriously consider seeking financial advice or guidance before investing.

    You have to be sure that the firm you are dealing with is regulated. Never take investment advice from the company that contacted you, instead, you contacted them. That may be the scam.

    The bottom line

    As you can see there are plenty of benefits using trading signals in this tutorial Trading With Signals.

    If you trust the signal provider, then you can save a lot of time and keep your focus on other core aspects of your trading business such as risk management principles.

    At the end of the day, all that counts is profit.

    The professional traders will tell you that risk management deserves 20 times the attention that entries and exits normally receive.

    The trading signal can be very complex or very simple. There is no quantification for that. The measure is how good and helpful it is.

    Traders tend to keep things simple by using only a handful of inputs.

    Honestly, it is far easier to manage a simple signal generator and periodically test it. Just to see what components need adjusting or replacing.

    Since markets change over time with great speed, complex strategies could be rendered obsolete before testing is even finished. That is the moment when trading signals step on the scene.

    Why we published this tutorial?

    Traders Paradise truly believes that knowledge is power. And speaking about your money, knowledge is priceless. We have been written about trading signals, what they stand for, their types and appliances in general trading. In particular, we wrote about how to define a top trading signal provider by providing theoretical information, and tips.

    Our intention isn’t to encourage you to utilize signals, but rather to give you an understanding of what is available should you want to include signals in your trading strategy. Remember, however, no matter how many benefits signals seem to offer, they aren’t a replacement for experience and real trading skills.

    Build up your knowledge and gain a real understanding of the trading market before you start to rely too heavily on signals.

    Traders Paradise showed you how to choose the best from all these possibilities we just introduced you.

    We hope that this ebook will be helpful for you and we wish you good luck in your future trades.

    Good luck from Traders Paradise Team!

     

     

    We are preparing a lot of surprises for you.

    See you around!