Category: How to Start Trading – Beginners

Leverage Trading Stocks – The More Leveraged the Better

3 min read

Leverage trading stocks is a concept that can enable you to multiply your exposure to a financial market without committing extra investment capital.

However, you need to understand leverage trading to help fully immerse yourself in the stock market.
The idea behind leverage trading stocks is to increase your potential payout on a play. However, it doesn’t always work out the way you want, and it can prove dangerous for your portfolio and trading account, especially when you’re new to the stock market.

Leverage is the ability to trade a large position with only a small amount of trading capital. We are sure you already find the articles that suggest that trading using leverage is risky. Also, you can find that new trader should only trade cash-based markets, like individual stock markets, and avoid trading highly leveraged markets.
Well, we disagree with this in full. Trading using leverage is no riskier than non-leveraged trading. Also, for certain types of trading, the more leverage that is used, there is the lower the risk.

What Is Leverage Trading Stocks?

In the stock market, leverage trading stocks are using borrowed shares from your broker to increase your position size in a play. So you can potentially make more money on the other side. Options trading, futures contracts, and buying on margin are all examples of leverage trading. But buying on margin is maybe the riskiest.

When you buy on margin, you’re essentially financing your position in the stock.

Actually, it’s just like buying new furniture. For example: Say you want a new kitchen and you talk the salesperson down to $25,000. You don’t have $25K in cash, so you put $2,000 down and finance $23,000 over five years. Every month, you pay the lender your furniture note. That includes the principal, which is the amount financed, and the interest, which is money paid to the lender in exchange for financing you.

People do this every day with i.g. cars and other physical kinds of stuff.

Well, it doesn’t sound so dangerous.

But even a furniture purchase can leave you in financial trouble.

Let’s say you put $2,000 down on your new kitchen and drive it off the lot. A few days later, you lost it in a fire accident. The insurance company pays the kitchen’s market value, which has already depreciated below what you paid for it. In other words, you have to keep paying off your kitchen note even though you don’t have a kitchen.
That’s what usually goes wrong with leverage trading.

How Does Leverage Trading Stocks Work?

Leverage trading stocks work by allowing you to borrow shares in stock from your broker.

For one example:

Let’s say you have $2,000 to invest. This amount could be invested in 20 shares of Microsoft stock. But in order to increase leverage, you could invest the $2,000 in five options contracts. You would have 1000 shares instead of just 20.

Instead of investing in options contracts, you can buy a certain number of shares. Leverage is always expressed as a ratio, such as 2:1. In that case, you could double your position size by borrowing twice what you actually buy.

When you exit your position, you’re responsible for paying back the broker for the shares you borrowed. Whatever you have left is your profit, minus your own initial investment in the shares.

2:1 leverage example

2:1 leverage means you can borrow twice the amount of your investment from your broker.

For example, you want to invest $50,000 in stock, but you only have $25,000 in your trading account. Using leverage, you could buy on margin at 2:1, giving you $50,000 to invest.

It doesn’t come free, of course. You have to make an initial deposit or down payment to your broker for the privilege of buying on margin.

But what happens to your investment?

Let’s say you bought $50,000 worth of stock at $50 per share. The stock climbs to $55, and you sell.

At that point, you have to return the borrowed shares or money to your broker. The brokerage firm extended $25,000, so you owe that back, plus any interest required. The rest you keep as profit.

If the stock price drops, though, you’ll still have to pay back your broker. Plus, you’ll have to cover any losses your broker incurred during the trade. And your own, too.

The Leverage is Incorrectly Considered Risky

Leverage can be highly risky because it can boost the potential profit. But also the loss that trade can make. For example, you make a trade with $1,000 of trading capital but has the potential to lose $10,000 of trading capital.

This is based on the theory that if a trader has $1,000 of trading capital, they should not be able to lose more than $1,000. Therefore should only be able to trade $1,000. Leverage allows the same $1,000 of trading capital to trade perhaps $5,000 worth of stock, which would all be at risk.

Well, this is theoretically correct. But it is the way that an inexperienced trader looks at leverage, and it is, therefore, the wrong way.

Leverage Is a High-Risk Strategy

There are no secrets, investing risk increases with reward. The higher the potential payout, the higher your risk for great losses. This is especially true when you’re trading with leverage because you’re playing with the house’s money.

Brokerage firms require margin account holders to maintain a certain minimum balance. Your cash and owned securities serve as collateral for whatever you’ve borrowed. It reduces the risk for the broker. Though, it increases your risk, because if you borrow too much on a losing position, your account can get wiped out instantly.

The Real Truth About Leverage Trading Stocks

Leverage is actually a very efficient use of trading capital. The professional traders value it because it allows them to trade large positions. Such as more contracts, or shares, etc. And with less trading capital. Leverage does not modify the potential profit or loss that trade can make. Contrary, it reduces the amount of trading capital that must be used, thereby releasing trading capital for other trades.

For example, you want to buy 1000 shares of stock at $20 per share. That would require maybe $5,000 of trading capital. So, the rest of your initial leaving the remaining $15,000 available for other trades.

This is the way that a professional trader looks at leverage. Therefore, this is the correct way.

The bottom line

Leverage trading can be a slippery slope.

On the other hand, the more leverage the better. Professional traders will choose highly leveraged markets over non-leveraged markets every time. Telling new traders to avoid trading using leverage is essentially telling them to trade like an amateur instead of a professional. Every time that pros trade a stock, they always use the highest leverage they can. They would never trade a stock without using leverage.

The next time that you are making a stock trade, consider using a leveraged market instead.

risk disclosure

29th January 2019
PENNY STOCKS – How much does it cost to invest in

3 min read

Penny stocks sound cheap, don’t you think?

Yes, because they are. They are also called micro-cap stocks

Penny stocks describe shares of a company that trades for low amounts. It is usually between $0.01 to $2.00. But some institutions count a penny stock is anything that trades for less than $5.00 per share.

They’re not expensive, so what’s the catch?

So why trade penny stocks?

Everyone who entered the stock market knows that penny stocks equal a bigger risk than regular stocks.

The reason for inflated risk is simple. The companies that hold penny stock typically have no profits and minimal operations.

Many of these companies are speculative because they are thinly traded, usually over the counter instead of on major exchanges like the New York Stock Exchange.

They usually trade on the pink sheets or on FINRA’s over-the-counter bulletin board (OTCBB) and are not required to file with the Securities and Exchange Commission (SEC).

These stocks have low liquidity due to a lack of buyers and sellers. Hence, orders may not be filled right away or even at all. Moreover, volatility tends to be high among OTC (Over-the-counter) stocks, and bid-ask spreads are frequently large.

Investors in penny stocks should be prepared for the possibility that they may lose their whole investment.

Plus, penny stocks are notorious for being part of so-called pump-and-dump schemes. The scammers buy up shares and then promote it as the next hot stock on blogs, message boards, and e-mails. Once the stock price is unnaturally pumped up by all the gossips, the scammers sell their stake. The investors stay with big losses.

But…

Where penny stocks have the advantage is the low cost.

Also because of the simple math of penny stocks. If you buy shares for $0.40, and if the stock goes up by $0.20, then your profit is at 50 percent. That’s the pie-in-the-sky scenario.

However, it’s just as easy for your $0.40 share to go down by $0.20 and lose 50%, instead.

So, a $1,000 investment could lose value pretty quickly.

Of course, not everything is so dark.

Several years ago, CNN published a story about a young man who made his first million dollars from trading penny stocks.

He decided to begin with his life savings of $1,500. And 3 years later his portfolio was worth more than $1 million.
See how worth it was.

So, how to trade penny stocks?

We warned you but, yet you still want to trade penny stocks.

It is possible to trade penny stocks successfully.

If you trade penny stocks successfully, they really can offer the greatest risk-reward ratio of any investment type. But take care, the odds are not in your favor if you don’t understand what you’re doing. The must is, you have to learn. You must have the knowledge, education, in order to understand the market to successfully trade penny stocks.

And you must stay far away from scammers. Read the fine print on any email or ad you see on social media and in emails. If you find a disclaimer at the bottom of a social media post or an email, be cautious.

That means that someone’s getting paid to post an ad.

YOU WOULD LIKE TO READ The awesome thing is that you can invest in stocks online for free. See HOW!

It’s possible to profit when you understand the game, but the odds are against you when you don’t. And worse: manipulators and scammers often run the penny stock game.

For investors who can’t afford shares of Apple, for example, the potential gains from trades like this are too good to pass up.

So penny stock trading prospers. With a relatively small investment, you can make a nice return if the trade works out.

So, if you spot an advertisement that promises dollars from your pennies just remember these several rules:

Never trust the sweet stories

You must not believe the penny stock stories that are touted in emails and on social media websites.

And you have to say no. Let’s say, you can’t invest in penny stocks as if they were lotto tickets.

Unfortunately, that’s what most people do, and they lose over and over. Think of penny stocks as people that you can’t trust.

Instead, focus on the profitable penny stocks with solid earnings growth and which are making 52-week highs.

Read the disclaimers

Penny stocks are sold more than bought. They come as tips in emails and newsletters.

Remember, the free penny stock newsletters are not giving you tips out of the goodness of their heart. Read the disclaimers at the bottom of the newsletters. And you will see. They are getting paid to pitch a stock because their investors want a presentation for the company. There is nothing wrong with that, but almost all penny newsletters make false promises.

YOU WOULD LIKE TO READ Online stock brokers make investing easier than ever

You have to know something. There is a difference between stocks making a 52-week high based on an earnings breakout and stocks making a 52-week high because three newsletters picked it. The disclaimers at the bottom of the email or newsletter, which the SEC requires, reveals very often a conflict of interest.
They are being paid to pump up the stock, but they rarely tell you when to sell. Usually, it’s far too late.

Sell your penny stock quickly

The charm of penny stocks is you can make 20% or 30% in a few days. If you make that kind of return, sell quickly.
Never get greedy, aiming for a 1,000% return. The penny stock is getting pumped up, take any profits. And move further.

Never trust company management

Don’t believe what you hear from companies in this penny stock’s world.

The companies are trying to get their stock up so they can raise money and stay in business. That’s okay, but there is no reliable business model or accurate data. So, most penny stocks are scams that are created to enrich insiders.

There are large circles of the same people run promotions using different press releases and companies.

Never sell short

Don’t do it.

Penny stocks are too volatile. If you’re on the wrong side of the trade, you could lose 50% or more on a short squeeze. Another problem is that it’s difficult to find shares of the penny stock to short. Leave shorting penny stocks to the pros.

Focus on penny stocks with high volume

Stay with stocks that trade at least 100,000 shares a day. It could be difficult to get out of your position if you trade stocks with low volume.

Traders Paradise suggests that you trade penny stocks that are priced at more than 50 cents a share. Penny stocks that are trading less than 100,000 shares a day and are under 50 cents a share are not liquid enough to be in play.

Don’t trade large positions

You really need to be careful with position sizing. Never learn the hard way not to trade big. Famous traders rule is not to trade more than 10% of the stock’s daily volume.

The limitation of position size will provide you to get out of the stock faster.

The bottom line

If you want to invest in penny stocks you have to learn.

By the way, learn from Timothy Sykes, who is famous for turning his Bar Mitzvah gift money of about $12,000 into millions by day-trading penny stocks while in college. For the past years, Sykes has been teaching his strategies through the sale of instructional newsletters and video lessons. You can find his lessons very easy.

28th January 2019
Online stock brokers for beginners

2 min read

It is easier than ever to find good online stock brokers. The benefits are numerous. You can learn and invest in the comfort of your own home. The research team at Traders Paradise made some research. We tried to find the options on the market that are good for you. So, we wanted to find the best online stock brokers for beginners and super investors alike. We had to deep into the financial world with stock experts.

And we hope that this research will help anyone get started.

The popularity of index fund investing and robo-advisors is rising. It may seem the trading of individual stocks is lost. But, it isn’t the truth.

Millions of investors continue to trade individual stocks and other securities. Because online stock trading sites make investing easier it’s important to do so using the best online stock trading sites.

Investors should know the best online stock brokers to trade with. They have the right to know. Some online stock brokers are known for their award-winning customer service. But the others are known for low-priced stock trades or powerful trading tools. Traders Paradise-Finance wants to highlight some of the best brokers available today. Actually, we want to give you some tips for choosing a broker.

Criteria for the best online stock brokers

The best online stock brokers offer low fees, great customer service, and smart research tools.

Discount brokers charge as little as $4.95 for online trades. Compare that to the $100+ that many full-service brokers charge. It seems like a no-brainer choice to choose the discount broker. But, you must know how to pick the right one.

Trading online is a self-directed practice, and you need the right broker backing you up.

But it is a stormy time for online stock brokers.

Between significant cuts in commissions and a few major acquisitions, the competition is fierce.

YOU SHOULD READ Stocks Online for Free – How to Invest

So, let’s like this, there is no one best online stock broker. But each one has different strengths and weaknesses. Our aim is to spotlight them and help you find the best one for your investing style.

Every trader should care about cost. A few of the fees we analyzed include:

Cost per transaction:

Commissions are typically an investor’s biggest cost base. For example, in 2016, a usually unassisted transaction fee averaged about $8. But early 2017 brokers decrease their commission. Fidelity, E*Trade, and TD Ameritrade, also did that. Now, you can trade for as low as $4.95. No matter what the price, though, for us, transparency is key. We wanted to see affordable pricing structures.

Account minimums:

Seeing your wealth shrink due to a tough market or bad strategy isn’t fun. It’s worse if you’re also getting dinged by your broker’s minimum account balance requirement.

Charges for data and tools:

The best online stock trading sites have quality market data like real-time quotes, educational resources, and stock-screening tools built right into their platforms. But some, we have to say, like Fidelity and TD Ameritrade, stand out for also providing top-shelf resources. And it is totally free of charge.

Extra costs:

Executing a trade over the phone, for example, can increase an $8 commission fee to $25 or more. Some platforms offer free education on sophisticated strategies but require an upgraded platform with an annual fee. Besides cost, we valued educational material, reports and tools, and the usability of the platform itself.

After Traders Paradise conducted this research, the following to be our top picks:

The best for cheap trading is Ally Invest. But beginners would like E*Trade. Speaking about the platform the best has TD Ameritrade. Best research and tools have Fidelity.

Why use a discount broker

A discount broker costs you much less money per trade. You won’t have the steep commissions that full-service brokers charge. What this means is more cash in your pocket and the opportunity to make more trades.

The main reason is cost.
But here we will break down who would do better with a full-service broker and who could get by with a discount broker.
Because cheaper isn’t always better.

Let’s see in this way.

Do you have a large number of large investments?
Or you not have the desire nor the know-how to handle your portfolio?
Can you afford high commission fees?
Maybe you not have time to manage your portfolio effectively?

If your answers are “yes” to each of these questions, a full-service broker might be the best option for you.
But, if you want to save money on each trade made or like to be in control of your investments, the discount broker will suites you better.

Because you don’t want to be pressured to take other investments and you want to make frequent trades.
The other things to consider when you have to choose your online stock brokers are:

Minimum deposit/balance:

Some brokers require a minimum deposit to open the account. Others don’t have a minimum. Yet others require a minimum average balance over the life of the account. Determine what you can afford to keep in the account if choosing accounts with a minimum requirement higher than $0.

Customer service:

Take a trial run on any broker’s website that you are considering. Check out the support they have readily available on their website. But you should also email and call them with questions. See how long it takes to get an answer.
A discount stock broker can save you a lot of money and save your portfolio. But they aren’t for everyone. Here are a couple of other choices you may want to consider:

Robo-Advisors: If you are familiar with a completely “hands-off” approach, robo-advisors can save you even more money. The automated system uses an algorithm to invest your money for you. After you input your risk thresholds and investment goals, the computer does the rest.

YOU SHOULD READ Automatic Trading – What Is It

Peer Lending: This is those who want to stay away from stocks and bonds for now. If you are one of them, consider peer-to-peer lending. You decide how much money you want to invest and what type of risk you want to take. The minimum investment is often about $25. You can break your investment up into as many loans as you want. This helps diversify your portfolio.

Full-Service stockbroker: If you have a lot of money to invest or need that in-person advice, a full-service stockbroker is for you. You’ll find them at your larger brokerage houses, but keep in mind that their commissions are higher than discount brokers. In the most common situations, you will have to pay $100 – $200 per trade versus $4 – $7 per trade.

The bottom line

Using a discount broker is a great way to trade and keep your profits. Choose your broker wisely by paying attention to hidden fees and understanding account minimums. A discount broker is a great way for beginning and experienced investors alike to invest in their future.

To find which online brokers suits you the best, you should read Traders Paradise’s WALL OF FAME.

Risk Disclosure (read carefully!)

25th January 2019
Stocks Online for Free – How to Invest
Why invest in stocks online for free, where to find broker, is it really free? Read this post to the end.

By Guy Avtalyon

Technology is making it easier than ever to invest in stocks online for free. However, some places still are charging outrageous fees and commissions to buy stocks and ETFs online when it’s possible to invest in stocks online for free.

Some of the firms that advertise “get started with just $5” can charge you huge fees as a percentage of what you invest. Truth is, we saw some really dishonest financial advisors charging thousands!

We can offer this: everything held equal, the less you pay in fees, the better your returns.

Where to find stocks online for free

Gratefully, we live in the 21st century, and there’s never been a better time to be a small investor.

For 95% of people, that’s fine. For those who want to buy individual stocks, there are still places that allow you to buy stocks online for free.

You have only a few ways to buy stocks online for free.
Thanks to developing technology investing is cheaper. More and more companies are lowering their fees and commissions.
It is possible that they will continue with costs reducing in the coming years due to competition. So, it’s reasonable to expect the cost will drop more.

Fees don’t have to stop you from making wise and lucrative investments.

And now, in today’s mobile world, investing is becoming easier and cheaper than ever. Buying and selling stock investments is not as easy as watching TV series but don’t worry it is not rocket science either.

Today you can enter your stock trades from stockbrokers websites for stock trading apps. It’s very convenient. Just read reviews of the best trading apps and you can find the best selection for you.

Some of them you can find on Traders Paradise’s Wall of fame, like E-trade, TD Ameritrade or Fidelity.

We can suggest you these 3 the best stock trading apps for beginners.
- TD Ameritrade
It is the best for ETF trades. You’ve probably discovered Exchange Traded Funds (ETFs) and you want to cut fees, but you want to maintain a well-diversified portfolio.

ETFs maintain a tax-advantaged structure. They usually offer lower fees than comparable mutual funds. But, most brokerages charge you to buy and sell ETFs. Well, this broker, TD Ameritrade, don’t do so.

TD Ameritrade offers over 100 commission-free ETFs from industry giants iShares, Vanguard, and even more. Because of the diversity of no-load ETF funds, TD Ameritrade is, in Traders Paradise’s opinion, top broker for the people who want to consider tax-loss harvesting on their own.

Moreover, TD Ameritrade also has no minimum and no maintenance fee IRAs.

TD Ameritrade’s mobile app also offers research, information, and portfolio analysis that makes free investing that easier. But we have to say, TD Ameritrade charges for some ETFs, mutual funds, and equity trades. Our suggestion is, filter for no-load ETFs before you buy.

TD Ameritrade has about 4,120 no-fee funds.
- E-trade
This broker offers thousands of mutual funds with no transaction costs.

Mutual funds are the old-school ETF similar principle from the diversification angle. Like ETFs, they hold many individual investments. Hence, investors get some level of diversification in a single fund.

Unlike ETFs, they are priced, they aren’t traded with a commission but with a transaction fee charged by the broker. That’s because they are bought and sold at the end of each trading day.

That fee can be pretty big, sometimes almost $50. But many brokers have a list of no-transaction-fee funds.

Of those that do, E-Trade put up the best showing, with about 4,440 and 4,350, respectively. This is why this broker tops our list of best mutual fund providers. That means you can buy funds on those lists with no charge. Though as with ETFs, investors in these funds will pay expense ratios.
- Fidelity
It is the best for Free ETF Trades & No Minimum IRA. Fidelity allows you to invest for free. This is surprising for most people because most people don’t connect Fidelity with “free”. But, Fidelity offers a range of commission-free ETFs. That allows the majority of investors to build a balanced portfolio.

Fidelity IRAs have no minimum to open, and no account maintenance fees. Let’s say, you could deposit just $5, and invest it for free. That makes this a much better deal compared to some other companies. Furthermore, Fidelity just announced that it now has two 0.00% expense ratio funds. And yes, they are free.

So, you can not only invest commission-free, but these funds don’t charge any management fees. This is truly free investing. But to make it a prime app, it has to have a great app, and Fidelity has it. Fidelity has a great app, so that makes them the top broker.

Fidelity’s app is the easiest to use out of all of the investing apps we’ve tested. All their features work brilliantly together, and they have tones of them. Plus, they are the all-in-one option. With them, you have a full service investing broker. And that is more than just free.

Why invest in stocks online for free

Investing in stocks is supposed to be about building wealth. Well, paying trading commissions can slow your progress..Small fees on stock trades might not seem like a big deal. Most online brokers charge $10 or less for each transaction. But keep in mind that’s per transaction. If you are just starting out as an investor, or if you have only small amounts to invest, even a small fee can take a big bite out of your profits.

But now, you know how you can invest in stocks online for free.
24th January 2019
Blue-Chip Stocks – Investing in them can be a profitable decision

Blue-chip stocks are popular because they can provide a safer position during economic downturns.

By Guy Avtalyon

Investing in blue-chip stocks may have a reputation for being boring and even a bit outdated. But think again, is it an accident that they are preferred by wealthy investors and rock-solid financial institutions?

Anyone would like a part in businesses they understand and that have a demonstrated record of extreme profitability. The blue chips certainly go along with this description. According to generations of investors, blue-chip stocks have brought money for owners. For the one wise enough to hang on them through good times and bad times, inflation and deflation.

And it is well known. The blue chips stocks are always there. They represent companies that are the core of the global business. The firms with the past, with history. Their products and services are present in nearly every part of our lives.

So, why they are almost entirely ignored by smaller, poorer investors? But, at the same time, the blue-chip stocks have been supreme in the investment portfolios of retirees, non-profit foundations. Also in the portfolios of the top 1 percent of the capitalist class.

This puzzle gives the greatest example, a spectacular glance into the problem of investment management.
Even more, it requires some discussion of behavioral economics.

Blue-chip stocks don’t belong exclusively to the world of retirees and insurance companies. Here’s why.

What are blue-chip stocks?

First of all, the blue-chip stock is a nickname. It describes the common stock of a company that has several quantitative and qualitative characteristics. The term “blue-chip stock” originates from the card game, poker. You know that the highest and most valuable playing chip color in poker is blue.

But there is no general agreement on what, precisely, makes up a blue-chip stock. Hence, there are always individual exceptions to one or more rules. Anyway, blue-chip stocks have several common characteristics.

They are not new, they have history and profitability. They have official data of stable earning power over several decades.
Also, they have long data of continuous dividend payments to stockholders.

They reward shareholders by growing the dividend at a rate equal to or substantially more than the rate of inflation. So, the owner’s income is increasing at least every twelve months even if the shareholder never buys another share.

Blue-chip companies

They have high returns on capital. Also, a solid balance sheet and income statement. Especially when measured by the interest coverage ratio and the geographic and product line diversity of the cash flows.That kind of company repurchases stock when the share price is attractive relative to owner earnings.

They are larger than the classic corporation. Measured by both stock market capitalization and enterprise value, they are among the largest concerns in the world.

It is difficult to unseat market share from them. Sometimes, it comes in the form of a cost advantage achieved through economies of scale, or a franchise value in the mind of the consumer, or ownership of strategically important assets such as choice oil fields. That giant companies issue bonds that are considered investment grade with the best of the best being Triple-A rated.

They are included in the component list of the S&P 500 index, speaking about the USA companies. Many of the blue chips are included in the more selective Dow Jones Industrial Average.

Why wealthy investors prefer blue-chip stocks

Well, one of the reasons wealthy investors prefer blue-chip stocks is because they tend to compound at acceptable rates of return. It is typically between 8% and 12% with dividends reinvested. To say that, holding blue-chip stocks isn’t smooth by any means. They may drop by 50% or more during the period of several years. But over time, the profits perform their extraordinary power.

Presuming that the shareholder paid a reasonable price, it shows up in the total return of the shareholder.
Even when they paid high prices for the ”Nifty Fifty”, 30 years later, investors beat the stock market indices despite several of the firms on the list going bankrupt.

By holding the stock directly, the wealthy can pass them to their children using something known as the stepped-up basis loophole. One of the most incredible, traditional benefits available to reward investors is that all of the deferred capital gains taxes that would have been owed are forgiven.

For example, if the investor, your mother or father at the same time, vested $500,000 worth of blue-chip stocks and held on to them.

Can the blue-chip stocks offer a safer position during economic disasters?

It isn’t a pleasant moment, but, just, for example, they died after they had grown in value to $5,000,000. The successor could arrange that estate in a way that the capital gains that would have been owed on the $4,500,000 unrealized gains ($5,000,000 current value – $500,000 purchase price) are forgiven. The successor would have never paid them. Their children will never have to pay them.

Don’t you think it’s better compounding at a lower rate with a holding you can maintain for the decades? Better than trying to flit in and out from position to position, always chasing after a few extra percentage points? Yes, it is.

Another reason blue-chip stocks are popular is that they offer a safer position during economic disasters. The less experienced and poorer investors don’t think about this too much because they’re almost always trying to get rich too quickly.

They are looking for that one thing that will instantly make them rich. It never ends well. Markets can collapse. You will see your holdings drop by substantial amounts no matter what you own.

Are Blue-chips safe investments?

Don’t let the other people deceive you. One of the reasons blue chips are relatively safe is that dividend-paying stocks tend to fall less in bear markets due to yield support.

Moreover, profitable blue chips sometimes benefit over the long-run from economic disasters. They can buy, or drive out, weakened or bankrupt competitors at attractive prices. The blue-chip stock sets the stage for much better results decades down the line whenever there is a market collapse.

As a conclusion, wealthy and successful investors tend to love blue-chip stocks because the stability means that the passive income is hardly ever in danger. Especially if there is broad diversification in the portfolio. If we ever get to the point that premier blue-chips are cutting dividends en masse across the board, then we will have much bigger things to worry about than the stock market. We’re most likely looking at a civilization disaster.

And if it comes, who will care!

21st January 2019
A Diversified Stock Portfolio – How to create?

Building a diversified stock portfolio is just the beginning but an important part of investing. Here is how to do that.

By Guy Avtalyon

We already mentioned a diversified stock portfolio.

‘Don’t put all your eggs in the same basket’ is probably the most popular saying telling investors about the importance of portfolio diversification. Otherwise, how to spread and reduce risk?

The major advantage of the diversified stock portfolio is its ability to protect your entire portfolio from the volatility associated with different asset classes.

In this article, we look at ways to protect your portfolio by spreading your risk across several different asset classes. Also, some of the many different assets in which you can invest, each with different risk characteristics.

Where is the advantage of the diversified stock portfolio?

The risks attributable to assets cannot be avoided. But when they are managed as part of a diversified portfolio, they can be reduced. Individual assets have a bearing on the overall level of risk you are exposed to.

And the association between the assets has even greater importance. This article considers how a well-constructed investment portfolio should be diversified in a variety of ways. Including overall investment style, a number of individual asset classes, the spread of geographical allocation, and the approach of the fund manager.
The key is to build a diversified stock portfolio with a mix of different investments that make sense for your attitude to risk.

A balanced investment portfolio should hold a mix of equities: stocks, bonds, property, and cash.

Yes, we know. For some of you, the world of investing is complicated. There are mutual funds, exchange-traded funds, target-date funds, a variety of bonds and fixed-income products and then, of course, individual stocks.

These days more and more investors are turning to low-cost ETFs. And necessary, there is the question: is it worth taking the time to build an individual stock portfolio? Yes, it is.

But you have to put in some time and research.

There are various advantages to individual stock ownership.

We believe an individual investor has an advantage over professional investors. But only if you are willing to do the homework necessary to understand the company, management, and the industry underlying each individual stock.

How can you start picking the companies that go into their stock portfolio? Building a solid stock portfolio requires some time, research, and homework.

What is a well-diversified stock portfolio

The diversified stock portfolio should have 10 to 30 individual stocks.

There are 10 stock sectors classified by S&P Dow Jones Indices. These include energy, materials, industrials, consumer discretionary, consumer staples. Also, health care, financials, information technology, telecommunication services, and utilities.

A general rule is to own two to three of the top companies in each main sector.

Stock rankings, screeners, and lists can help individual investors in their quest to find the best stocks for their needs. The rankings can slice and dice stock market members up by returns, market capitalization, dividend yield, price-to-earnings ratio, and other criteria.

Investing in research doesn’t have to be for professional portfolio managers. It is for individual investors too.

How to diversify a portfolio between growth and value stocks?

Or between dividend stocks and those focused on plowing their profits back into their operations.

Diversification is a beautiful thing because it can lower risk without lowering the expected return of a portfolio. This is more or less related to magic by Wall Street standards. Use your research and logic to weed out the stocks that you do not like. Or the companies that have historically lost money due to the competitive pressures.

It will be good for you to understand the behavioral psychology and economics at play behind the companies you hold in your portfolio.

For example, knowing the demand elasticity, or how much a change in price will impact the quantity demanded, can be useful in understanding a company or industry’s prospects.

If the price of gas went up 15% tomorrow, it’s very unlikely there would be a corresponding drop in demand. People need to drive, of course.

How to establish an investment time frame in your diversified stock portfolio?

Since you are going to own individual stocks you need at least three to five years. The longer the better. In order to reduce certain volatility.

Hence, to be successful in individual stock investing, you must do your homework. But more importantly, you need to have a steady temperament and be confident in your own convictions and analyses.

Building your diversified stock portfolio may be just the beginning. But, for the interested and dedicated investor, the payoffs could be well worth the work.

Picking good stocks requires research, time, and the ability to evaluate many parameters for the stock, industry, and overall economy.

And while buying a few dividend stocks should earn you some healthy interest income. Your real dividends will be the long-term gains you rack up as you watch your picks grow.

20th January 2019
How to structure your stock portfolio?

The structure of the investment portfolio depends on many factors but risk appetite is maybe the most influential one.

By Guy Avtalyon

How to structure your stock portfolio? The answer to that question depends on your attitude to risk. Here are three sample portfolios.

What is the best structure of a portfolio?

Laith Khalaf, a senior analyst at UK wealth adviser Hargreaves Lansdown suggests this model of your stock portfolio structure:

Adventurous investor
20%: JPM Emerging Markets
20%: Legal & General International Index
20%: Man GLG Japan CoreAlpha
20%: Threadneedle European Select
20%: Standard Life Global Smaller Companies

Balanced investor:
20%: Invesco Perpetual Tactical Bond
25%: Newton Global Income
10%: Stewart Investors Asia Pacific Leaders
25%: Legal & General UK Index
20%: Baillie Gifford Managed

Conservative investor:
25%: Newton Real Return
20%: Investor Perpetual Tactical Bond
10%: Legal & General Global Inflation-Linked Bond
20%: Threadneedle Equity Income
25%: Troy Trojan

How you will structure your portfolio depends on are you a defensive, middle-of-the-road, or aggressive investor. This will partly determine where you invest.

What is a portfolio structure?

The portfolio construction is the process of organizing your investments as a whole, rather than piecemeal.

How can you have the best chance of constructing a portfolio that meets your investment goals?

At a broader level, portfolio construction should be about structuring your portfolio in a way that stands the best chance of meeting you have stated investment aims within your acceptable level of risk.

But be careful, well thought out structuring of your assets will have an enormous impact on your long-term wealth creation. Conversely, the wrong structure could cost you in both ongoing charges or unexpected tax liability.

What factors do you have to consider in deciding on the combination of stocks, bonds, and perhaps commodities to use in building up your retirement portfolio?

Let’s say that the further one is from retirement, the more risk one can take. Thus at 30, you might have a portfolio of 70% stocks, and 30% bonds. At 50, the ratio might be half stocks and half bonds and at 70, 70% bonds and 30% stocks.

This model of stock portfolio structure allows for a more predictable and more stable income from bonds. But it does not take into account the characteristics of the individual or the nature of the stocks and bonds. Moreover, not all stocks are equal.

Structure of the stock portfolio based on risk tolerance

Find how the structure of the stock portfolio matches your risk tolerance.

If your stock portfolio at 30 or 50 is loaded with, for example, half small caps with no dividends, mining stocks with low dividends then the need for bonds is higher. Or if the bond portion of a portfolio is loaded with high-yield bonds subordinated debt, the fixed-income portfolio needs to be rebuilt for security.

As we move from working years during which it is possible to raise savings and make up for investment losses into retirement, the need to cut volatility grows. A mixture of short and long government bonds and corporate bonds can’t compete with the potential of small companies’ stocks to rise. But it does have fundamental security.

But you can implement some other model of structuring your portfolio. For example, you can buy stocks from developed and emerging markets around the world. And you can own real estate through a low-fee fund as a part of your portfolio.

If you live in the USA, Treasury inflation-protected securities, or TIPS are a very good choice. Some of these parts will possibly increase and drop and increase again. It will happen at different times and at different rates. So you can rebalance at least once a year to maintain your target allocation in your portfolio.

David Swensen, chief investment officer, Yale University suggests this, take a look at the image below.

How do the fees influence the structure of the stock portfolio

Fees can make terrible damage to your investment returns.

Even if you hold the higher-risk, but also, higher-return asset classes. In case of, for example, stocks, you can expect high but one-digit or low double-digit returns over a long time. In fact, Swensen said you can end up losing more than half of your returns. The math is simple, you’ll have to pay 1% for your financial advisor, the additional costs are mutual funds fees which are approximately 1-2%. Finally, you’ll have to adjust your returns for the percentage of inflation.

The odds, he said, are in favor of index funds. In his opinion, very-low-fee index funds make the most sense for individual investors.

When it comes to investing there is no such thing as one size fits all.

Speaking about how to structure your stock portfolio, your portfolio has to be well-diversified, equity-oriented for long-term investors, and efficient in the sense that it is as good or better than other alternatives.

Portfolio structure depends on how long you want to stay invested

When you’re investing for the long run, for example, 20 or 30 years, you are expected to make more money holding a fairly large part of your portfolio in stocks or some other assets that have a high rate of return. That’s because historically, stocks offer greater returns than safer alternatives over the long term.

But in the short term, stocks tend to be much more volatile. So as you approach retirement age, investment advisers suggest moving more assets to the “safer than stocks” class.

Let’s say the stock market crashes and you need to spend money out of your portfolio as income in retirement. So, you don’t want to lose 20 – 30% of your savings and to sell your stocks at a lower price. If you’re younger and market crash, you can just stay invested and wait for the market to recover.

But it isn’t all about age

How to structure your stock portfolio is also about the appetite for risk. Risk tolerance is different for each investor. Risk-averse investors will prefer to hold a mixture of the stock portfolio and cash. Cash could reduce overall risk. When wealth increases, it could happen a tolerance for risk to increase also. But when you grow older, tolerance for risk could decrease. Each investor needs to find his/her own stock portfolio structure that suits their risk tolerance. That’s the main point.

18th January 2019
The best stocks to invest during the inflation

Investing in stocks can be the best move during inflation. What are the best stocks for such an environment?

By Guy Avtalyon

So, stock markets aren’t going away anytime soon. But let see how stocks act in the period of inflation. They remain a driving economic force in every country in the world. Analysts aren’t quite sure what the future holds for the stock market.

We will likely see stock markets continue to merge over the coming years. Some have even thought that we’ll see a single global stock market. This appears to be unlikely. Frankly, stocks are not good short-term protection against rapidly increasing inflation, but bonds are worse. But for long-term investors, stocks can be an excellent hedge against rising prices.

Inflation has been creeping up on the world economy. It isn’t the first time. During the history, we had so many inflations.

Inflation tracks the rise in the price of goods and services, which in turn shrinks the money’s purchasing power. When inflation rises, people can buy fewer goods, input prices go up, and revenues and profits go down. The result is, the economy slows down.

But the good news is that you can make money on the market by investing in stocks. Earnings come even in times of inflation.

How?

Well, the truth is that too much money chasing too few goods is one classic definition of inflation. Many studies have looked at the impact of inflation on stock returns. Most studies conclude that inflation can positively or negatively impact stocks. That depends on the investor’s ability to hedge. Also, it depends on the government’s monetary policy.

The most important is knowing how to invest in that environment.

Should you be concerned about inflation and your investments? If you have a substantial portion of your portfolio in fixed income securities, the answer is a definite yes.

Inflation erodes your purchasing power, and retirees on fixed incomes suffer when they can buy less each passing year. This is why financial advisers caution even retirees to keep some percentage of their assets in the stock market as a hedge against inflation.

The consumers will not hold cash because their value over time decreases with inflation. For investors, this can cause confusion.

High inflation can be good, as it can stimulate some job growth.

What can you do in periods of inflation? You can stay invested and not pay attention to the short-term fluctuations. Sometimes this can be hard.

One common misconception about a buy-and-hold strategy is that holding a stock for 20 years is what will make you money. Long-term investing still requires homework because markets are driven by corporate fundamentals. If you find a company with a strong balance sheet and consistent earnings, the short-term fluctuations won’t affect the long-term value of the company.

In fact, periods of volatility could be a great time to buy if you believe a company is good for the long-term.

Companies that raise their prices in line with inflation tend to fare better than others when the cost of living is increasing.

Energy companies, for example, may perform well in an inflationary environment as they can raise their prices in line with inflation. Infrastructure companies such as those responsible for toll roads, or hospitals, may also do well. They often have long-term government contracts in place with payments linked to inflation, which encourages private-sector investment.

Generally speaking, cash would be the worst asset class to hold in a high inflationary environment. However, stocks would be a better choice. This is because a company’s revenue and earnings should grow at the same time as inflation. Companies usually pass rising costs to the consumer to maintain their profit margin.

The concern of rising inflation has recently surfaced as strong employment numbers have caused fears of wage growth. In January, the average hourly pay, for example, in the US jumped 2.9 percent in a year. This is the largest jump in 8 years.

Companies may increase the prices for goods and services in order to pay for these increased salaries. This element is causing concern for investors. Higher salaries for some can bring a higher cost of living.

So, what can you do, where to invest, which stock to buy in the period of inflations?

Oil Stocks

There is a positive connection between the price of oil and inflation. The consumer price index helps measure inflation in the economy by tracking a basket of goods and services by households. Energy costs in households are part of the consumer price index. When the oil prices increase, it directly affects the energy costs spent by consumers. This leads to an increase in the CPI index and then inflation. Oil stocks always do well in high inflation environments.

Utilities

Utilities are defensive stocks. People will need utilities even in a high inflation environment. When operating costs rise for energy companies, in the final instance the consumers will pay them.

So, the companies will maintain their profit margin. Consumers will have no choice. They have to pay for the newly inflated cost if they want to receive electricity, for example. Demand in utility companies will still be strong even in high inflation periods.

Healthcare as best stocks

Healthcare is also a defensive stock. They are considered safer investments as people will always need healthcare. Even when consumer budgets are poor. During the inflationary period, investors will sell out high-risk stocks. They will prefer to buy into low-risk stocks because these are considered safer. People will always need medicine and medical treatment. They will give priority in spending on healthcare as opposed to less crucial goods and services.

Gold Stocks

When investors notice high inflation in the economy they want to turn to safe-haven investments such as gold stocks.

Gold traditionally is an investment held during the economic instability. High inflation causes investors to want to safeguard their investments by buying gold stocks.

Of course, holding cash in bank accounts is a bad idea in a high inflation environment. Because the purchasing power of cash is eroded by inflation.

Basic goods/consumer staples

For instance, companies with higher energy costs from increased transportation costs or higher operating costs will pass these costs to the consumer. Good and services will become more expensive. Consumers will become more selectable when purchasing goods and services because they have less buying power. But, basic goods or consumer staples will still be in demand in a high inflation environment. Even if the costs increase, people will still buy bread and milk. Even if such companies increase the price of their goods, consumers will need to buy it. Consumers will not buy non-essential goods and services such as a new car or furniture. They will only spend what is necessary. That kind of company is a good opportunity.

During the period of inflation never invest in discretionary stocks.

Material Stocks

Basic materials companies are involved in the exploration, development, and processing of raw materials. Hence, many times target specific resources, such as gold, silver, and crude oil. This sector also includes companies that run refineries and plants to develop refined materials. The dividend yields within this sector are above average in comparison to the wider market.

If you’re looking to invest in dividend-paying basic materials stocks, you may also be interested in dividend-paying basic materials exchange-traded funds (ETFs). These funds offer a diversified dividend payment based on a basket of basic materials stock holdings.

What we want to show is that there is no solution to inflation, but there’s the reason for hope. And for profits and returns of course.

You might find these interesting too:

>>> Cryptocurrencies a Powerful Tool Against Hyperinflation?

>>> Are we in an overpriced market?

>>> How to improve risk management in trading?

>>> How to trade stocks during recession

>>> How to Find a Stock Worth Trading?

14th January 2019
Forex Trading Program – How To Choose The Best
2 min read

Forex trading program must help you to raise your trading results to a higher level. How to choose the most useful Forex trading program can be very tricky.

Hence, we will talk about tools with which you can raise your trading results to a higher level. You will find out how to make the information more efficient, how not to forget anything, how to quickly learn and how to not spend too much time solving the simplest tasks that the trader faces daily.

Forex trading program – Forex Expert Advisor (FEA)

It is the Forex trading program for analyzing testing advisor results.

First, we will talk about programs that make it possible to better understand the results of testing advisor, Expert Advisor.

The Forex Expert Advisors program for the MetaTrader 4 platform, for example, is written in the MQL4 programming language. This programming language is specially developed for writing an “expert advisor” program.

Expert Advisors are very flexible pieces of software that can take any information into account that is available on the MetaTrader platform. They are written in their proprietary programming language called MetaQuotes Language Version 4.

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So, a trader can easily and simply use the program in his trading system, in online mode 24 hours a day.

If you are a beginner, you can think that trading with software programs is a sophisticated thing. However, it is not. Try to use FEA for a month, and for the trading system you’ve previously developed. It will be quite enough to get expert consultants experience.

Where do I get the FEA?

Well, there is more than enough choice on the Internet, but it’s best to seek advice from your consultants because they will have the best solution for you.

Forex trading program – SQ EA Analyzer

First of all, let’s emphasize that this Forex trading program is not free, it costs and is called QuantAnalyzer. However, there is a demo version that does not, of course, have some of the “most sophisticated” features. But allows a detailed analysis of the results of the adviser you received through the terminal, as well as the creation of portfolios from them. Also, the program enables various tests of stability and reliability.

They do have a visual interface. With StrategyQuant you run a generator for strategies, and it comes with some entry rules such as RSI7*MACD/MA13, or any other combination that it found.

StrategyQuant is one of many algorithmic trading software.

Algo trading is the only programmatic version of your strategy of trading. If you have a strategy, you can create your own EA or hire somebody to develop a strategy for you.

However, High-Frequency trading is the strategies which human could not perform or computer program perform better.

Forex trading program – Report Manager

This is a completely free trading program, with extremely simple features. In fact, this program can only combine several test files EA into one resulting file.

No additional parameters, no tests!

It is suitable for those who want to see the ultimate balance of adversarial work on all couples together or can serve as a quick test adviser for all tools!

Good, isn’t it?

Report Manager is the web-based application included with Reporting Services that handles all aspects of managing reports.
Why bother with using Report Manager?

The best answer is that those who develop reports may not have the necessary permissions to deploy all reports to the production server. When a report is ready for deployment, you may need to hand it off to a person who has the permissions to deploy to the production server and that person doesn’t want to use BIDS. Most admins are not developers and what they want is the ability to script out deployments or at least use a tool that isn’t developer-centric.

Report Manager provides the capability to deploy data sources and reports by using a simple browser-based interface.

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Information technology and management science staff members often are key partners with financial managers and financial analysts in the development and maintenance of management reporting systems.

In many cases, however, management reporting systems are constructed and maintained strictly using desktop computing.

They have built-in Excel spreadsheets and running on personal computers. Rather than programming in mainframe environments.

The development of management reporting systems often faces hurdles related to key analytical issues, such as:
- Internal transfer pricing methodologies
- The attribution of corporate overheads to individual products or clients
- Disaggregating changes in client assets into the separate impacts of changes in market prices (i.e., investment performance) and of net deposits and withdrawals
In most cases, these analytical challenges are amenable to multiple methods, each of which has drawbacks of its own, and is not demonstrably superior in all situations.

Forex trading program for manual testing strategies

We can say that it is generally accepted that traders in financial markets can be divided into two groups: supporters of good old-fashioned manual testing and amateurs – fans of automatic trading. However, although when traders know their trade strategies, they must first test by hand.

Luckily, for manual testing supporters, there is the Forex trading program that allows testing their systems on historical data.
Also, programs of this type work perfectly as simulators for the rapid development of trading skills.

Manual testing has to be exploratory. A lot of teams prefer to script manual testing so testers follow a set of steps and work their way through a set of tasks that are predefined for software testing. This misses the point of manual testing. If something could be written down or scripted in exact terms, it could be automated and belongs in the automated test suite.

Real-world use of the software will not be scripted, thus testers must be free to probe and break things without a script.
Software testers are always learning but we cannot always quantify it.

There are many aspects to software testing. It does not always involve using the product. It is not just about finding bugs. Testing can start around the requirements stage.

Thinking about what the product should do, where risks could be is all part of testing.

Forex Tester

This brilliant program is very similar to the MT4 terminal. It allows the manual test system to run. If you are just trading online – in that case, press a couple of buttons, place the commands and proceed further. In that case, you can stop, accelerate or slow down the timeline. At the end of the test, you will get the result of your store.

The only disadvantage of this program is the complexity of using copyright indicators.

The fact is, there are classic indicators, different graphical setting tools. But if you use an external indicator, you need to overwrite it in the programming language.

Another disadvantage is that this Forex trading program is not free – it costs about $ 100. But it isn’t too much.

How does it work?

Forex Tester simulates the Forex market with unequaled realism. You can test strategies and train your trading skills on years of data in just a few hours. This strategy tester works with the recorded price movement of the real Forex market. Like a recording of music, you can jump forward, pause or jump right to the interesting moments. You can go back to any point in time.

Also, you can restore all your open trades, trade history, and account balance in this simulation.

You can keep a trade journal and export your trade log for analysis on Excel or other programs.

There’s no need to rely on estimations.

One important note, amateurs have to rely on assumptions and believe what others tell them. Professionals, however, make their decisions based on facts. Forex Tester delivers the hard facts about your strategies. If a strategy is not profitable, you will find that out quickly with Forex Tester.

Remote Management Software

Nowadays, watching market movements over a tablet or phone is not at all difficult. These devices have enough memory and processing power to install special applications or use web accounts that are used by virtually all brokers.

Remote desktop software is really useful for lots of situations.

Generally, remotely accessing a computer requires that a piece of software be installed on the computer you want to connect to, called the host. Once that’s done, another computer or device with the right credentials, called the client, can connect to the host and control it.

Don’t let the technical aspects of remote desktop software scare you away. The better free remote access programs require nothing more than a few clicks to get started. No special computer knowledge required.

However, this is not always the most appropriate.

For example, sometimes you must have instant access to your home computer to disconnect automatic trading due to instability on the stock market. In this case, salvation lies in a program called TeamViewer.

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This Forex trading program is available both on PCs and on smartphones. You need to install the program on all your preferred devices and get something like a network of work machines with the ability to access each of them via your smartphone.

The bottom line

If you want to succeed in a tough business such as trade in financial markets, you will have to spend a lot of time, among other things. It increases the chances that you will finish the race successfully. For this very reason, we suggest you pay attention to the presented Forex trading program and consider them in order to choose the one that suits you best and with which you feel the most comfortable.

Risk Disclosure (read carefully!)
7th January 2019
Investing In The Forex Market

How to Forex investing? It isn’t a get-rich-quick scheme but it is full of potential to become wealthy

By Guy Avtalyon

Investing in the Forex market is growing and people from all around the world, especially from, India, are choosing to invest in Foreign Exchange markets, after the regulation of brokers’ work and their massive presence on the market.

In this regard, investing in the Forex market can be a good alternative for all those who want to make a high return on invested money.

Nevertheless, regardless of the many advantages of Forex, many investors are quite skeptical when it comes to investing large amounts of money. The reason lies in numerous myths, rumors, and misinformation that can often be found on the Internet, and they are referring to the Forex market.

In the shortest, it can often be heard or read that the Forex market is a dead end, an ideal place for losing money, a fata morgana in the desert, and so on.

For this reason, investors instead of developing the right trading strategies, are often subject to rumors. Hence, they do not make the right decisions or completely abandon or omit to invest in the Forex market.

On the other hand, there are completely different myths.

There are people who believe or have heard the myth that they can get rich overnight without one day of financial education. So they believe that Forex is the right place for that.

What is investing in the Forex market?

Someone would say, instant win with minimal or almost no investment. But this couldn’t be more wrong. It is true that behind any desire for quick rich is the lack of experience, the uncertainty, and the lack of a properly defined strategy. Success on the Forex market comes slowly, step by step, through education, practice, and only if it is based on realistic expectations.

Often another myth can be heard. The is investing in stock markets is nothing more than a pure game of happiness. This is certainly far from the truth and such myths are the result of a lack of financial education. Forex is not gambling. Anyone who has read something about the Forex market, if they really wanted, could easily understand the mechanisms of price formation on the market.

Here’s one myth more about investing in the Forex market. Money can be earned on Forex, but that means a lot of nights without sleep with a computer in front. And many hours of night trading on a trading platform.

That’s another untruth about investing in the Forex.

Any standardized financial education or course in this area will teach you to invest in a minimum amount of time. Practically, from the computer, you will only read the latest news. Making a strategy and making decisions is not something that is done every hour. It has a longer-term character. Not to mention mid-term and long-term investments, where you can almost neglect any day-to-day operations.

In the case of unforeseen news, whether good or bad, you certainly can make a change in the investment portfolio. But this is not something that happens every hour or every day.

Is Forex worth investing in?

Discipline is the basis of every success and it comes in combination with solid knowledge. It comes with a great role in patience and significant experience.

Successful investing in the Forex market is only a consequence of well-planned and executed trading operations.

That involves taking into account all important economic events, permanent informing, and essential understanding of price graphs.

Finally, for all those who do not have adequate education in this field and recognize Forex as a good place to invest, the first thing they need to do is find the right provider of financial education. They have to choose mentors and plan personal development goals. The mentor is one who will propose to you the appropriate type of training, course, etc. And that one will be your guide through the first practical operations.

The Forex market is a very complex mechanism. The undeniable fact is that it generates various controversies.

However, the main cause of these controversies is ignorance. If you want to take advantage of the opportunities for earning in this field, you must break all the prejudices, myths, and misconceptions surrounding it.

If you are dealing with a trader’s job, you will probably be interested in the so-called “Robo-forex” ie robotic/automated business on the forex market.

How to Forex investing?

In other words, can you actively trade without moving a small finger?
It’s possible but you’ll have to do something. You’re the one who has to give instruction, you’ll have to specify inputs. Then, how is it automated, you may ask?
It’s about a program called “The Forex Expert Advisor” (Forex Expert Advisor) and can be used within the Trading Platform.
This program works independently, although based on the instructions you specify. But it does not require your direct participation in the execution of trade orders or any other market activity.

So, robo-forex executes all tasks independently, meaning automatic.

All you have to do is set the target through an online trading platform that is linked to a broker server. Then the Forex Expert Advisor will start trading according to the given instructions. It is important to note that forex market experts are necessary as advisors especially if you’re a beginner. In this way, you don’t have any responsibility for decision making and, practically, you’ll trade without stress.

What’s more, in that case, you don’t have to be an expert or have a deep knowledge of technical and fundamental analysis. These jobs are contained in the Forex Expert Advisor Add-on – Trading Program.

So, this means that you can practically be away from the computer because your “advisor” will monitor and process all trade signals in case of your absence.
So, it’s possible to invest in Forex and trade this market with a little effort and engagement.

Forex as investment

You have often had the opportunity to hear that investing is not a sprint but a marathon.

This means that if you want to succeed in a tough business such as trade in financial markets, you will have to, among other things, spend a lot of time on it.

To run in the long run, you do not need the 500-euro sneakers. You can run in the old one. The point is that you can start investing in Forex even with a little money but you’ll have to do so in a way that is suitable for you.

The price is not the most important issue when you investing in the Forex market. The most important is to feel comfortable as much as you can. Because it increases the chances that your race will end successfully. So, take advantage of this growing market. And stay tuned, follow Traders-Paradise. You’ll find plenty of valuable suggestions and examples from real investing and trading.

4th January 2019