Tag: stock market

All stock market related articles are found here. Educative, informative and written clearly.

A chaotic December in equity markets

2 min read

Image from shutterstock.com

What caused a chaotic December? A chaotic December in equity markets is closing. But, at the end of the year, these were not usual circumstances.

It’s “completely bizarre,” says Stephen Innes, head of trading for the Asia Pacific at Oanda Corp. “It’s incredible just how harmful markets veer when sentiment slides.”

Innes mostly is keeping his money on the sidelines. But he has been taking profit on some winning investments. And, also, from blue-chip stocks whose valuations have dropped in the December sell-off.

Like many other traders in Asia, he’s been watching events play out in the U.S. from a distance, astonished at what he sees.
So, what he did see?

Source: Bloomberg

The S&P 500 Index posted its biggest upward reversal since 2010 on Thursday. Just a day after the largest advance since 2009. Despite this two-day gain, the measure is still down almost 10 percent in December alone.

That’s the largest drop for each key market barometer since 1931, according to data from LPL Research. But those Depression-era losses were much bigger: the S&P 500 plunged 14.5% while the Dow plunged 17%.

Two golden rules have been broken.

First, since 1945, December has produced the highest average gains of any month. But December is the worst month of the year. Second, since the 1970s, the S&P 500 has never slumped when earnings growth was more than 10 percent.

Mark Matthews, head of Asia research at Bank Julius Baer & Co. in Singapore, is planning to ride it out. “I remain invested through good times and bad,” he says. “Not being invested, over the long term, is like betting against the house in a casino.” He is a long-only investor.

The December 2018 chaos is making investors nervous.

This chaotic December in 2018 could have an impact in the future. The investors are worried that the economy could slow in 2019 because of continued trade tensions with China and rate hikes by the Federal Reserve.

The Dow and S&P 500 are both in the red for the year, their worst annual loss since the 2008 Great Recession, and first annual loss since 2015. Last year, the S&P 500 returned 22%.

For the past, eight to nine years never happened the U.S. market dropping at this magnitude and speed.

Maybe the solution is to go overweight cash for the time being. The volatility will continue until year-end until investors get a clearer picture from the holiday earnings season, say experts.

But longer-term, it is unknown if this will prove a “healthy correction”. The investors may find the S&P 500’s low valuations are attractive and earnings come in above expectations. Or it will mark the end of the bull run. Either way, one thing’s for certain, this movement is definitely unusual.

This market turbulence isn’t normal.

Maybe investors should keep away from new trades and tend to the existing investments. Anyway, investors opinion is very bad.

Yes, most of them don’t think that this huge volatility will continue. But also, they are thinking that it is not a quite good idea to trade stock while the market is like this.

The investors can’t hope that the markets will turn around in the year’s final days. They are here and it is obvious that nothing will change.

In the past years, December was usually a very solid month for the market. Professional money managers used to buy top-performing stocks. That made their portfolios look good. This phenomenon is known as window dressing.

There was also the somewhat mysterious Santa Claus rally effect. The market was very well in the final week of the years.
There was some chalk up to light trading volume with so many people off for the Christmas holiday.

But volatility remained this year. Stocks are down.

It is, as we can see, unusual for this time of year. But the people take holidays. They have hope that the U.S. economy is robust and the sell-off will bottom out.

For this time of year, some people are probably a little more focused on the market.

But trying to explain short-term movements in the markets is an exercise in futility because generally, it is pretty random.

Not only stocks, but Bitcoin has also had a brutal 2018.

This chaotic December in 2018 had an impact on cryptos too.

The world’s largest cryptocurrency by market cap is nearly 84% since its meteoric rise topped out at an all-time high of $19,870 in December 2017.

But just after bitcoin (BTC-USD) peaked, technical trader Peter Brandt made a fantastically prescient call. This has recently resurfaced in crypto circles. In January, he called for an 80% retrace of bitcoin’s parabolic advance, predicting a $3,933 price target. Bitcoin is currently trading around $3,600. It was very close.

But as ever, there were different opinions.

The dominant Bitcoin price prediction was that Bitcoin would reach the $14,000 mark by the end of 2018.

However, that prediction is blown out.

Despite some optimists who were hoping that Bitcoin will break through the $100,000 barrier till the end of this year. In fact, Jim Cramer was predicting that Bitcoin will go as far as shattering the million dollar threshold one day.

To do so, market capitalization should surpass 1 trillion USD just on BTC to reach $66,000 per coin, a 10x increase. Well, the entire market cap is at $212 billion. The BTC market cap was $170 billion almost a year ago. Now it is $115 billion and it was at $800 billion in January 2018.

So, who knows what can happen.

Today’s price of BTC you can see here

One thing is certain. After this chaotic December in 2018, next year will be difficult and uncertain. Markets will be full of volatility. Permanent ups and downs.

Anyway, it will be interesting.

Risk Disclosure (read carefully!)

2nd January 2019
Margin Trading Definition

2 min read

Margin trading isn’t without risks involved, so pay more attention to it

Margin trading is simply the process where investors buy more stocks than they can afford to. It also refers to intraday trading in India and various stockbrokers provide this service. It can increase your profits on the upside, but also expand your losses on the downside. Margin trading means buying and selling stocks or some other assets in one single session. This process requires a trader to guess the stock change in a particular session. It is an easy way of making a fast buck. It is now accessible to even small traders.

What is margin trading?

Margin trading is also called buying on margin. It is a method of buying shares that involves borrowing a part of the sum needed from the broker executing the transaction. The collateral for the loan is normally securities in the investor’s account. The trader has to deposit an initial amount of cash or securities into a margin account with the broker. And has to keep a minimum amount of cash or securities in the account as collateral. If the balance of a margin account falls below the minimum maintenance amount, the broker makes a margin call to the trader for the funds needed. Margin balances can be adapted to follow market values by adding or subtracting variation margins.

What is buying on margin?

Buying on margin gives the investor leverage as any capital appreciation or dividend income is on the total amount purchased. Even after the amount borrowed has been repaid to the broker, with interest, the investor could still be better off than if he/she had personally financed the purchase of a smaller amount of shares. That depends on how much the shares gain and how much they yield. There are some risks with margin trading – if the shares fall in value, the investor suffers a capital loss while also facing potential margin calls from the broker.

An example of margin trading

Margin trading is meant for traders who are looking for a simple way to increase their earnings. And also, they have a reasonable level of risk appetite but do not have enough capital.
Let’s say you are 100% bullish for the big company and believe the stock is going to pick up. You want to buy 1000 shares of that company and each share is priced at $200. You would need a capital amount of $200,000 to enter that position.
Assuming you have $150,000 and want to borrow the rest of the capital. With margin trading, your broker can help you with the rest of the funds while charging you a specific interest percentage.

How does margin trading work?

The whole process is quite simple. Margin trading is legal buying stocks or other securities, but instead of your own money, you borrow it from your broker.
Think about buying stock on margin as buying a house with a mortgage. A margin account provides you the financial support to buy more stocks than you can currently afford. For this purpose, the broker will lend you money to buy shares and keep some amount as collateral.
If a trader wants to trade with a margin account, the first requirement will be to request a broker to open a margin account. This requires paying a specified amount of money upfront and in cash. That is so-called the minimum margin. If a trader has a losing bet and ends in losses, and fail to pay the debt, the broker will get it out from the margin account.
When you open the margin account, you’ll have to pay an initial. This is a specific percentage of the total traded value and pre-determined by the broker. Before you start margin trading, you need to keep in mind these important steps.
First, you need to secure the minimum margin (MM) through the trading session. The reason behind this: if the stock is very volatile, the price can fall more than you had expected.
Second, the broker has the right to ask you to increase the amount of capital you have in your margin account. Also, the broker has the right to sell any of your securities if feels its own funds are at risk. The broker can even sue you if you don’t fulfill a margin call or if you are carrying a negative balance in your margin account.

Margin trading if the stock price goes up

This is the best outcome for you. Let’s do some math (I adore math).

Say you bought 100 shares for $4000. But you had $2000 and broker loans $2000. If the price goes to $50 per share, your investment will be worth $5,000. Your outstanding margin loan will be $2,000. If you sell, the total proceeds will pay off the loan and leave you with $3,000. Because your initial investment was $2,000, your profit is a solid 50%. Your $2,000 principal amount generated a $1,000 profit. However, if you pay the entire $4,000 upfront without the margin loan your $4,000 investment will generate a profit of $1,000, or 25 percent. By using a margin, you could double the returns.

The stock price fails to rise

If the stock stays at the same price, you still have to pay interest on that margin loan. You are in a better situation if the stock pays dividends because that money can pay some of the costs of the margin loan if not all. In other words, dividends can help you pay off what you borrow from the broker.

When the stock doesn’t change in price it is a neutral situation, but you’ll pay interest on your margin loan for each day. Margin trading can be a good plan for traditional investors if the stock pays a high dividend. Many times, a high-payed dividend, for example, $5,000 worth stock, can exceed the margin interest you have to pay. For example, if you had $2.500 and you borrowed the other $2,500, which is 50% of stock’s value. But you expect to receive $3.000 as a dividend, so you’re safe.

Margin trading when the stock price goes down

If the stock price drops, buying on margin could work against you. What if the price in our example goes to $38 per share?
The market value of 100 shares will be $3.800. So, your capital will shrink to just $1,800 because you have to pay your $2,000 margin loan to your broker. This isn’t real trouble at this point, but you should be cautious. The margin loan is 50% of your investment. If it goes lower, you may get the margin call. The broker will demand you to keep the ratio between the margin loan and the value of the securities the same as it was when he lends you money. That’s why margin trading can be very dangerous.

How to maintain the balance in margin trading?

When you buy stock on margin, you must maintain a balanced ratio of margin debt to equity of at least 50 percent. If the debt portion exceeds this limit, you’ll be required to restore that ratio by depositing either more stock or more cash into your brokerage account. The additional stock you deposit can be from another account. If you can’t come up with more stock, other securities, or cash, you have to sell stock from the account and pay off the margin loan. For any trader, it means having a capital loss. For you also, because you lost money on your investment.

The bottom line

As you can see, the margin can increase your profits on the upside but also increase your losses on the downside. If your stock drops drastically, you can end up with a margin loan that exceeds the market value of the stock you used the loan to buy. In the bear market of 2000, for example, many people realized stock losses. The majority of these losses came as a consequence because traders did not manage properly the obligations associated with margin trading. To avoid this kind of problems you must have sufficient reserves of cash or marginable securities in your account.
For example, buying dividend yields that exceed the margin interest rate could be the right choice so the stock could pay for its own margin loan. Just keep in mind to set up your stop-loss orders. Your goal is to make money, and paying interest could eat your profits.

14th November 2018
What is a Trade and how to Trade

To understand what is the trade we must have some historical and economic facts in our minds.

By Guy Avtalyon

What is trade? For some of you, this question may seem like nonsense. But, do we all know what is a trade for sure? So, let me explain this. Trade is a basic economic concept that involves the buying and selling of goods and services. Trading points to the buying and selling of securities, for example, buying and selling stock.
Answer to this question could be: Trade is a transfer of goods or services in return for money, services or goods. In other words, trade refers to give and take. In the old days, trade took place with the exchange of goods without the exchange of money. With the invention of money, the trade appeared as an exchange of things for money.

Trade is buying and selling on stock market transactions with the help of stock market brokerage houses. To trade in capital markets, one has to learn technical analysis first. Then apply those learned technical analysis concepts through paper-trading for a few weeks then open a trading account thru a broker and slow start the first real trade.

Everybody knows what the term “trade” means. We are trading in our everyday life, while we may not even register that we have done so. Basically, everything we buy in a market is trading money for the goods we need.

So, what is the trade?

The word “trade” simply means “exchange one thing for another”. We normally get this to be the changing of goods for money or in other words, simply buying something. The same principle is applied when we trade in the financial markets. Let’s say someone trades shares. What traders and investors are really doing is buying shares of some companies. When the value of the shares rises, they will make money if sell them at a higher price. This is trade. You buy something for one price and sell it again for another, hence making a profit or loss.

Why traders trade

Every single trader is buying the shares in the hope that the price will rise. But why would the value of the shares go up? The answer is simple: the value changes due to supply and demand, meaning the more demand there is for something, the more people are willing to pay for it.

Trade is conducted not only for the sake of earning a profit; it also provides service to the consumers. Trade is an important social activity because society needs an uninterrupted supply of goods forever increasing and ever-changing but never-ending human wants. Trade exists from the beginning of human life and will obviously last as long as human life exists on the globe. It enhances the standard of living of consumers. Thus we can say, answering the question of what is the trade, that trade is a very important social activity.

The examples of what is a trade

Trade is when two parties agree on the price of a financial instrument but they perceive it’s valued differently.

For example, say, trader A wants to buy stock with the current market price of $800. So, when trader A buys a stock at $800 there is a seller trader B at the same price. Hence, both of them have an agreement at the price of $800. But the buyer, trader A values is higher than the seller, trader B at that point.

Let’s say that suddenly the owner of another stock comes into the market and has even more stocks to sell. The supply of stocks has now increased dramatically. Now, it’s reasonable to expect the second trader will want to sell that stock at a lower price than the first one to attract the other traders to buy that stock. And such will be right. The other traders would reasonably want to buy at the lower price, why not. Let’s see what happened with the first trader. The first trader will lower the stock price also.
Can you see how the sudden increase in supply has brought the price of the stocks down?
When the asset’s price at which demand matches supply is known as the “market price”. In other words, that is the price at which traders agree on both sides, sellers and buyers both.
Trade is executed with the payment of money, the transaction of goods and services, or virtual currency.

What is the trade of virtual currencies

Those who want to trade cryptocurrency should start by picking a company with a good status that gives an exchange and wallet. The beginners should start by trading leading coins. Currently, we are referring to coins like Bitcoin (BTC) and Ethereum (ETH). In the future, this could change.

Cryptocurrencies are still new to some people, so trading in this novelty can certainly generate good outcomes. But it is important that you know very well what any virtual currency gives and know the features of each coin. It is necessary for you to make trading informed decisions, evaluating carefully the risks/benefits of each coin. Using a reputable cryptocurrency exchange platform could support you in order to take the best possible of cryptocurrency trading.

Virtual currencies

Virtual currencies do not expose holders to foreign exchange risks and provide anonymity between trading partners. Some online resellers provide buyers to conduct their transactions using virtual currencies. If you want to trade cryptos you can also find platforms that convert virtual currencies into gift cards. Virtual currencies are often popular with small businesses, because of the lack of processing fees.

Trading cryptocurrency isn’t hard to start, but there are some basic aspects to understand before you start trading with a wallet-exchange.

The main thing to note is that there are countless options for setting up wallets and trading currency.

The bottom line

When we ask what is the trade we should have some historical and economic facts in our minds. The process of economic specialization and trade leads to much higher levels of production of goods and services. It is this process that creates and sustains the markets of the “free market” system. The development of this system brought about the dramatic and revolutionary improvements in living standards that characterize the modern age.
Free and open trade has fired competition, innovation, and economies. It allows individuals and businesses to take advantage of lower prices and increased choice. As a consequence, millions of people all over the world have overcome the restrictions of subsistence farming and severe poverty that defined the lives of most of humankind during history.

14th November 2018
Who are the most successful investors in India?

2 min read

All those who enter the stock market in India has the same dreams. They all want to become absurdly wealthy like few of the known richest investors in the world. These guys made a success! It is never easy to make money by investing or trading in stock markets. The stock markets are highly volatile and your investments can be at high risks. Many people have lost all their savings in this market. Yes, the rules are the same for all, but the story is not the same for all. Many have gathered good wealth. In India too. We found some beautiful stories about successful investors in Indian stock market.

We want to introduce some of the most successful investors in India. How was their journey, what principles they follow, how long they have been investing? Who knows, maybe these examples could be an inspiration to all of us. For you too!

Rakesh Jhunjhunwala – Stock market investor

He is one of the most successful investors in India. His portfolio is worth over Rs. 20,000 crores / 3.2 billion dollars. His top holding is CRILIS but he holds stocks of Titan and Lupin too. He is known as Indian Warren Buffet.

Rakesh Jhunjhunwala entered the Indian market in 1985. His father was interested in the stock market and boy-Rakesh was very carefully listener during the long conversations among his father and his friends. He attended the Chartered Accountancy course to gain a professional degree and completed in 1985.

After that, he joined the Stock Market and started trading. His first biggest bet was 5000 shares of Tata Tea which he got for Rs 43 and sold for Rs143 in just 3 months. This gave him Rs. 5 Lakh which was a big deal at that time. His next big hit was Sesa Goa. He bought 4 lakh shares and gathered huge profits on it. After that first successes, a lot of stocks made large sums of money for him like Lupin, Crisil, etc.

Porinju Veliyath – CEO of Equity Intelligence

He is one of the most well-known investors and fund manager. Equity Intelligence stock picks like Emkay Global Financial Services and BCL Industries has raised by 200% in their share prices and IZMO and Vista Pharma raised by 100% at their share prices under his hand. But it wasn’t so easy in the beginning.

The story of his life isn’t exactly ‘Slumdog Millionaire’ but he had a lot of struggles in his early days. Porinju Veliyath was born in the lower-middle-class family in Kochi. During his student days, he had to work many different and hard jobs to support his family.

When he moved to Mumbai in 1990 in search of a job, he became a floor trader at Kotak Securities there. He was clever, learned quickly and he became an expert trader. He worked for 4 years there and got a lot of knowledge. In 1994, he joined Parag Parikh Securities as a Research Analyst and fund manager. In 1999, he returned to his hometown Kochi and decided to make money on his own from the stock market. He made his first major investment in ‘Geojit Financial Services’. The stock was trading at a very low value at that time. Proving everybody wrong, this investment gave him multiple returns. In 2002, he started his own portfolio management service firm in the name of ‘Equity Intelligence’.

Vijay Kedia – a successful investor with the origin

He describes success on the stock market: ‘knowledge to find out quality stocks which one can acquire only by reading. If one doesn’t have reading habits, he can’t be a good investor.’

Vijay Kedia was born in the family of stock-brokers. He started his career in the stock market in 1978 not by his own choice but by force after his father died.

He joined the family business of trading and stock-broking. At the start, he was not doing well. But, he did not lose hope. He realized that trading didn’t suit him well and decided to start with investing. But learned a lot about the fundamentals of companies. In the beginning, he owned Rs 35,000 and by his own study, he invested the entire amount in a stock named Punjab Tractor. In 3 years, the stock multiplied 6 times and his Rs 35,000 grew into Rs. 2.1 Lakhs. Then, he invested in ACC at the rate of Rs. 300. After a year, the stock multiplied 10 times and moved to Rs. 3,000 in the second year. He continued to make successful investments in various stocks to create a wealth of 500 crores.

Vijay Kedia is betting now on Everest Industries and Vaibhav Global as multi-bagger stocks for 2018. And still is one of the most successful investors in India.

Nemish Shah – top 10 retail investor

His net worth is Rs 1,300 crore.

Nemish Shah is the co-founder of ENAM, one of the most reputed and respectable investment houses. He keeps himself away from media and publicity. His investment ideas are most sought after. He invested in Asahi India and multiplied his funds to 3.4 times in 3 years. He does not invest in too many stocks. His focus is on limited stocks and highly sector-driven.

Ramesh Damani – well-known investor

Ramesh Dhamani is well-known as Warren Buffet follower as much as because of his investments in listed and unlisted companies. He is picking high-quality stocks and retaining them for a long time. He follows the model for investing that favors companies with strong management credentials and processes. And it is Warren Buffet’s model. That affords him millions of rupee. Also, one of the most successful investors in India.

Raamdeo Agrawal – Founder of Motilal Oswal Group

Raamdeo Agrawal is one of the founder members of Motilal Oswal Group and MD and co-founder of Motilal Oswal Financial Services. He started buying stocks in 1980 and till 1994; he made a portfolio of about Rs. 10 crores. Then, he read Warren Buffet’s tips and worked upon his portfolio to pick quality stocks instead of accumulating bad sticks. In a span of one year time, his portfolio doubled. He has amassed a net worth of over Rs. 6,500 Crore /1 Bn dollars.

Dolly Khanna – the Value investor

Women in the top 7 the most successful investors in India. Value investor Dolly Khanna has been investing in the Indian stock market since 1996. Her portfolio is managed by her husband Rajiv Khanna. She made debut through the fertilizer sector by homing in on a top-quality small-cap stock which enjoys a monopoly position. She has a knack of spotting multi-bagger stocks and knows exactly when to book profits. Emkay Global Financials, PPAP Automotives, IFB Industries, Thirumalai Chemicals are some of the picks form her portfolio.

Bottom line:

If you want to become successful in the stock market, then you should learn from the lives of these iconic stock market investors. How was their journey, what principles they follow, how long they have been investing?

Everyone who enters the stock market world knows about Warren Buffet. The greatest investor of all time and one of the richest person in this world who made his fortune by investing in stocks. But you have to know these guys and their life path.

Both you and they deserve this to know.

Risk Disclosure (read carefully!)

22nd October 2018
Signal Provider – How To Pick Right One?

Picking the good signal provider can be harder than anyone can imagine. Truly nightmare.

By Guy Avtalyon

A signal provider can help you but also ruin you. Many forex traders use forex signal providers’ services to make money. Traders who struggle to make profitable trades in the forex market can leverage off successful forex traders by using their signals in their trades.

Not every forex signal provider out there is authentic and attempting to make sense of which ones are con artists. And ones which are genuine can be an overwhelming assignment.

Finding the right signal provider is the challenge

Finding a reliable forex signal service can seem like a challenge. There are those signal providers that are professional and transparent.

And unfortunately, there are those providers that do not always have their members’ best interest in mind.

It is up to you. You have to do your due diligence. To be sure that you are working with an honest forex signals provider. The one you can trust and have faith in.

There are several things the trader 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. They are 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 an informed and proper judgment.

Another way is by the trader looking at the level of detail contained in the signals provided by the forex signal provider. If he or she realizes that it just entails a few charts with a loss or profitable line, the trader has a reason to think twice before following such signals.

A trader should look for testimonials about various forex signal providers available in the market. A trader should look at what other players in the industry are saying about the available signal providers. This will enable the trader to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered.

What trader should check?

The trader should check the number of TPs the providers have in one trade.

Also, the trader should check how the providers put together the performance statistics.

Check if the providers have a trade by trade statistics.

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.

If you search for forex signal providers on the web, you will most likely be unable to recognize the sites of scammers from genuine suppliers.

Scammers’ sites are so comparative and competitive.

Sometimes you can feel that clueless forex merchants typically get gotten in the scammer’s site rather than the genuine forex signal supplier. When they understood that the signal is not profiting, it would have been past the point of no return.

The scammers had officially taken the cash and it is past the point where it is possible to do anything.

Signal providers will give you entry and exit signals but remember you have no idea how they came up with the entry and exit points, all you have to do is follow.

With all these promises, you will be tempted to subscribe. That is the moment it will dawn on you that whatever you have subscribed to is a pack of lies.

Forex Signal providers are typically separated into two different groups

It is based on how they generate their trading ideas – technical analysis and fundamental analysts.

Technical Analysts 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. All over historical data and in real-time market conditions.

Fundamental Analysts 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? But there is something important also. Do the trading alerts always detail the buy and sell signals, or present 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 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 signal providers offer a 1 or 2 week trial for members.

Join their Email List – Another way to find a provider is by joining their email newsletter. You will find the value that they provide for free. So, you can evaluate whether their premium forex signals service will meet your expectations.

Check their Track Record – Every single reputable FX signal provider will implement 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 with whom you are dealing. Just don’t be one of those naysayers.
Check it, try it, test it, and make your own conclusion.

10th September 2018
Trade signals – What Is It and How To Use?

.

2 min read

Trade signals are simply when someone is making a trade call. Either to buy or sell a security or other asset, generated by analysis.

They show you that it is a good time to buy or sell a particular security.

So if they believe an asset will go higher or lower, they will tell you via some kind of message, email or software. After that, it is up to you to follow or not to follow.

Actually, trading signal is a alert that is based on technical indicators.

Trade signals come in a variety of forms. They can be bull or bear pennants, rectangles, triangles, and wedges, as well as head-and-shoulders chart patterns. Trade signals may also bring attention to abnormal volumes, options activity, and short interest.

There are lots of trade signals

As anyone can make calls, the challenge often is finding one run by an actual trader. These type of services exist in the institutional world as well. They just tend to be a little more accurate than ones you find available to retail traders.

Market Signal is an unintentional or passive passage of information or indication between participants of a market. For example, If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control. Thus instead of equity capita,l it prefers loan capital. It is based on technical indicators. And usually is the sign for when to sell or buy a particular product.

It also brings the attention of users to the other options available, abnormal growth and short-term interests.

Trade signals in volatile markets

Using signals in volatile markets can help to point out opportunities to the investors. Also, they will signal them if they disappear.

There are usually two ways to deliver market signal: send news and activity. The market signal expects to deliver consumer, rivals and outlet member. And the earlier studying of the market signal which is mainly a concentration of signal’s influence.

For instance, it is the price signal where costly products make the customer think it is made of high-quality raw material.

That is a kind of advertisement in which the main aim is to make the customer think that a certain enterprise has more advantage.

Every company doesn’t market in a static environment, the competitor and member of the outlet will make prediction and reaction to enterprises, their decisions process is a dynamic market mechanism.

Trade signals in Forex

In Forex, traders are using trade signals all over the world to aid them in making critical decisions about their trades. They are one of the most important tools a trader has, and almost all traders choose to use them in one way or another.

There are many types of signals systems, some are offered for free while others for a fee but take in mind that a trustworthy service should include information about taking profit and stop loss configurations.

A forex signal is a suggestion for entering a trade on a currency pair, usually at a specific price and time.

Who can generate the trade signal? Human-analyst or an automated Forex robot supply a subscriber of the forex signal service. They are usually sent via email, website, SMS, RSS, tweet.

The majority of signal providers focus on supplying signals based on technical analysis and a minority work on fundamental analysis or price action.

Technical analysis, such as Ichimoku and candlestick charting, show both short and long-term price trends giving the signal provider flexibility in supplying a range of trade options.

The fundamental analysis gives longer-term trade ideas. Price action gives extremely short-term trade ideas, often more suited to scalping.

Trade signal in the stock market

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

A short note about George Lane (1921 – 2004): He was a securities trader, author, educator, speaker, and technical analyst. He was part of a group of futures traders in Chicago who developed the stochastic oscillator (also known as “Lane’s stochastics”). This is one of the core indicators used today among technical analysts. Lane was also President of Investment Educators Inc. in Watseka, Illinois, where he taught investors and financial professionals basic and advanced technical analysis methods. He popularized the stochastic oscillator.

Stock trading signals

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 now and a new buy order can be placed by the trader.

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

An example of a technical analysis price indicator may be a Moving Average or MACD. Traders can receive stock signals on thousands of trading methods.

Trading stocks can be extremely lucrative when you are able to find trading signals that are proven to be effective. Trusted stocks signals help you predict the market investing in stocks. Doing that with live trading signals sent directly to your device, in the app. With this, you will be able to get live rates on hundreds of different assets.

How does it work?

The software scours social media and accumulates posts, comments, etc that include keywords of interest. All this data is then filtered and crunched to produce interesting statistics. Showing the true public opinion using their words, giving an in-depth insight into public minds.

Risk Disclosure (read carefully!)

9th September 2018
What is Speculation? Trading or Gambling?

3 min read

The definition of speculation says:

The speculation involves trading a financial instrument involving high risk, in expectation of significant returns.
The motive is to take maximum advantage of fluctuations in the market.

Who are speculators?

Speculators are prevalent in the markets where price movements of securities are highly frequent and volatile. They play very important roles in the markets. Because they can absorb excess risk. And provide much-needed liquidity in the market by buying and selling when other investors don’t participate.

What is speculation?

Let’s be clear.

Speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more worthy in the future.

Speaking about finance as a field, speculation is also the practice of engaging in risky financial transactions. In an attempt to profit from short-term fluctuations in the market value of a tradable financial instrument.

Rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest.

Not one speculator pay attention to the fundamental value of a security. Instead, speculators are focused purely on price movements. Speculation can involve any tradable good or financial instrument. Speculators are particularly familiar with markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

Why speculators are important?

Speculators play one of four primary roles in financial markets, besides hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who look for profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument’s underlying attributes.

Why wouldn’t we consult history?

The appearance of the stock ticker machine in 1867, removed the obligation for traders to be physically present on the floor of a stock exchange. Since then, stock speculation went through a dramatic expansion through the end of the 1920s.

The number of shareholders increased tremendously. Let’ say, from 4.4 million in 1900 to 26 million in 1932.

Whether speculation has a place in the portfolios of investors is the subject of much debate. Some investors believe the market is always fairly priced. They are thinking about speculation as an unreliable and unwise way to profits. Speculators believe that the market has a lot of variables and each of them is the opportunity for capital growth.

The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators, and academics.

Speculation as higher risk

Some sources note that speculation is simply a higher risk form of investment. Others define speculation more narrowly as positions not characterized as hedging.

The U.S. Commodity Futures Trading Commission defines a speculator as “a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements.”

The agency emphasizes that speculators serve important market functions. But defines excessive speculation as harmful to the proper functioning of futures markets.

Frankly, some speculation is necessary and unavoidable.

Why?

In many common-stock situations, you can find substantial possibilities of both profit and loss, and the risks therein must be assumed by someone.

True?

Many long-term investors, even those who buy and hold for decades, maybe classified as speculators. Of course, excepting only the rare few who are primarily motivated by income. Or the safety of principal and not eventually selling at a profit.

We already conclude the trading is art.

But we have to admit that speculators are real artists.

Yes, we know that some market pros have the opinion that speculators are gamblers. But as we said above, a healthy market is made up of not only hedgers and arbitrageurs, but also speculators.

Economist John Maynard Keynes said that speculation is knowing the future of the market better than the market itself.

And you know who Keynes was. This giant of finance, English economist, journalist, and financier is best known for his Keynesian economics, theories on the causes of prolonged unemployment.

He developed, so-called, Keynesian economics during the 1930s in an attempt to understand the Great Depression. Keynesian economics is a theory of total spending in the economy (called aggregate demand). And its effects on output and inflation.

A Keynesian believes that aggregate demand is influenced by a host of economic decisions, both public and private and sometimes behaves erratically.

Let’s go back to speculations.

Speculation usually involves more risks than investment.

That’s true.

But, everyone has to recognize the price-stabilizing role of speculators. One who tends to even out price-fluctuations due to changes in the conditions of demand or supply. Only because they have better than average foresight.

One of them explained the benefits of speculation. Victor Niederhoffer, in his book “The Speculator as Hero” wrote:

”Let’s consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.”

The art of speculating covers a wide range of trading tactics. Including pairs trading, swing trading, employing hedging strategies and recognizing chart patterns. Speculators are well skilled at fundamental analysis. Including spot over- or under-valued companies, the amount of short interest a company holds. And, analysis of earnings and other SEC statements. A speculator with skills and good performance knows that the short-term movements of the investment markets are largely tied to world events.

According to the Los Angeles Times, baby boomers are trying a new investment strategy for their retirements accounts.
Instead of the passive investment strategy that most employees use, an increasing number of people have turned to speculate. In an attempt to catch up on shortfalls in their retirement accounts.

How to become speculator?

Every trader who wants to become speculator has to spend many years of learning, watching, practicing.

Such one must learn how the market behaves and watch how favorite stocks react to market events.

For many traders, the book, “How to Make Money in Stocks” by William O’Neil, is a value for learning the art of speculation.

This book and many others provide ambitious trader practical tips on trading and risk management.

Speculation popularity is spreading rapidly because of the easy access to world investment markets through online brokerage portals.

But speculation is difficult to master, so you have to learn a lot if you mean to become speculator one day.

After you have a continuous track record of success through both up and down markets, it’s time to consider speculating with real money.

Successful speculating takes a lot of skill, time and experience to master. Most people who work outside of the financial industry don’t have that.

That’s why the speculators are real artists.

Risk Disclosure (read carefully!)

7th September 2018
Scams – How to avoid scams in trading and investing
Scams in the world of trading are not rare, so pay attention to the following situations.

By Guy Avtalyon

The intent of all the scammers is to get hold of your money. Scams come to us with many faces, different forms, but all of them have one goal: to make us poor. They are getting us to reveal our personal details, steal our information, or make us to voluntarily give them cash.

At first, everyone thought the Internet was a safe place. But we all can become an easy target for evil actors who want to steal our personal data.

How to recognize scams?

Criminal minds can reach into our private lives, our homes, and our work offices.

And there is little we can do about it. Attack tactics and tools vary from traditional attacks from malicious software to ingenious phishing scams. They are usually developed in regions where justice can’t easily reach out to catch them.

The forex market involves very active trading of over $1 trillion each day, with futures and currency options, it is closer to $5 trillion daily. The market does not have strong regulation, although things have started to improve recently.
Let’s say, everyone wanting help in making money in the stock market will be interested in finding a trading system.

There are plenty available.

Unfortunately, there are so many humbugs in the trading system.

How to separate the legitimate trading systems from the scammers?

Based on research and experience, here are some good ways to mark trading system scams:
- Do your own research. There is no need to be in a hurry when you have to invest your own money. You should first read up on the steps of investing. Make sure you know at least the basic setups of trading and investing. Be very cautious with online trading.
- Choose a trading system. Successful trading systems can be a hedge fund or mutual fund. If you want to invest in something that has clear systematic knowledge-based information, you have to pick some trusty trading system.
- * Examine a trial period. An investment scam often does not include trial-periods or customer satisfaction. Before you invest your money, you should invest your time in researching the terms and conditions of the item.
- * Check a broker report. It has to be registered, so you may get reports that include information such as qualifications, reliability, and employment history. This can help you to spot any previous problems or concerns before investing.
Cybercriminals will pull you to believe you can make money easy and fast on the internet. They’ll promise you plans and methods of getting rich quickly. It is quite simple especially when someone is in a difficult financial situation.

How do trading scams work?

This scamming method is similar to the romance scam.

Cyberattackers approach to the emotional side of victims. For example, the false posting of non-existent jobs for a variety of positions is one of the online criminals’ methods.

Using different job types, such as work-at-home, the victim is pushed to give personal and financial data with the promise of a well-paid job. Of course, it carries lots of money in a very short time. For sure.

Never share sensitive financial information with anyone you don’t know well. Scammers can reach you out via phone, SMS, or email. They can contact you, pretending they are from a financial institution or government agency.

They could tell your account is compromised or needs to be updated. These criminals are trying to trick you into giving them your credit card number, Social Security number. This scam is known as phishing.

Keep in mind, your bank or credit card provider will never ask you for personal data in that way. If you receive a suspicious call or email, call the credit card provider or bank immediately to check on your account status.

Let’s go back to trading.

One of the challenges a novice forex investor faces is how to determine which operators to trust in the forex market and which to avoid. Signal sellers are a good example. Some analysts propose that many or even most signal sellers are scammers. A frequent criticism is that if it were really possible to use a system to beat the market, why would anyone that has this information make it widely available?

Other analysts distinguish between known scammers and more reputable information sources such as Metatrader, that offer a well-thought-out signaling service.

Behind these views lies a larger difference of opinion on whether anyone can predict the next move in a trading market. The best way to determine if a signal seller can benefit you is to open a demo trading account with one of the better-known forex brokers. Be patient, and you’ll determine whether predictive signaling works for you or doesn’t.

Some forex brokers do not deal fairly with their customers and defraud them. You should trade with a broker that also handles other stock market trades and is subject to SEC and FINRA oversight.

The forex trade itself may be unregulated, but no broker as the subject of such oversight would risk its license for other securities by defrauding its forex customers.

Follow these signals because such scammers are always coming back. With the same or slightly altered face.
5th September 2018
The Barriers to Learning About Stocks and how to avoid them

Be objective, don’t expect the success overnight, have reasonable expectations, think in all probabilities.

By Guy Avtalyon

First of all, never base your decisions on emotions, rumors, or rush to the next hot opportunity. This is one of the most influential barriers to learning about stocks.

You will end up losing money as a result. Some investors despite their problems, continue with the same actions and keep getting the same bad results.
Investors have to remove barriers on their path to success. Otherwise, success will never come. All investors must seek to continuously remove new barriers as they appear.

What kind of barriers to learning about stocks you may have?

Emotions

The fear and greed! Many investors experienced the obscure of ability to rationally consider through an investing opportunity. This leads to poor investment decisions and a loss of money.

For instance, it is in an investor’s best interest to sell high and buy low, investors hate to sell winners and are unwilling to buy out-of-favor stocks. Why so many investors hold winning investments too long? When they fall back, they continue to hold on to them, hoping they will return to their previous highs. They even lie that they will sell if the price returns to the level at which they bought it.

Also, there are investors who hold on to losing investments! Okay, they might be in love but why to hold for so long? They have some hope. If they wait and hold longer, their shares will recover. That might happen never.

They can sell to at least break even, very often such investors become losers. Because their capital is tied up in a losing investment and is unable to produce a return. This reduces account balances and expands stress levels.

Most investors admit that holding investments too long is the mistake that was most detrimental to their success.

Less knowledge

Some investors think if you just buy and sell the right stock, you will always make money.

That’s wrong! Totally mistake! Barriers to learning about stocks!

Sometimes, investors can have less understanding of how markets work. That drives stock prices and successful investing performance.

Also, so many investors tend to overestimate their strength to beat the market. As a result, they take on unnecessary risks. People are often drawn to powerful performance, even when it’s not sustainable.

Many investors follow the hottest sector and don’t have a sufficient understanding of the risks involved.

For instance, investors realize they should not overweight their portfolios with too much money in one investment, but they continue to do so. It isn’t rare that people buy too much stock in the company where they are employed, because the company’s available retirement funds and use of options as a part of their compensation package makes this easy.

Barriers to learning about stocks may leave investors with a portfolio that lacks diversification.

Some other investors don’t understand how bonds work, and they avoid them. Few of them realize that bonds hold a preferred position should a company declare bankruptcy.

Many others don’t realize that when interest rates rise, bond prices go down. When it comes to understanding important concepts such as how a central bank sets interest rates and the yield curve, even fewer investors have sufficient knowledge to make rational decisions.

And more interesting, most investors do not know when to sell a stock that has substantially appreciated. They continue to hold the stock instead of selling part of their position.

In that way, they could capture some of the profit and make capital convenient and available for other investments. They can’t realize that as the price of the stock goes up their portfolio becomes even more unbalanced.

The market has the ability to balance portfolios for investors, sometimes to their astonishment. Many investors are confused by the idea that rebalancing entails selling some of the investments that have performed best and buying more quality stocks that have lagged.

Losing the Bigger Picture

Despite many investors like to say they invest with a long-term perspective, they continue to make decisions based on short-term movements and ideas. Most investors believe that setting long-term goals for such things as buying a home or providing for retirement are important. But still, they fail to establish viable financial plans to do so.

Without these plans, their decisions are decaying. Basing decisions on unpredictable market fluctuations can be very dangerous because there is a good chance that these investors will make the wrong decision. That can obstruct their ability to achieve their long-term goals.

When the investors realize that the market has risen, they pour cash into stocks and mutual funds, trying to grab part of the profit the professionals have realized. When the market puts in a decline, some investors panic and sell close the bottom. And very often, this pattern continues, causing such investors to lose much of their capital.

How to remove barriers to learning about stocks

No matter what your barriers are, it is important to put together and plan to remove them. Here are some steps you can take to eliminate these barriers to your investing success. Experts advise doing this.

* Learn to monitor your performance: Measuring your performance creates a record of what has worked and what has not. This can help you to recognize problems that you repeat. You should record the overall market trend, the sector trend, the reason for making the trade, the exit target, and the trailing stop. Do this for each trade no matter if you sell or buy. This record is very useful in evaluating your investing activities and can be used to identify what barriers you are meeting that obstruct your success.

* After you have measured your actions, you can identify what you have to change: Inspect your past tradings and find patterns that show to barriers to success. Maybe you impulsively buy the next stock without thinking? Does your explanation prove to be wrong most of the time? The key is to identify the investing behavior that inhibits your performance.

Stay focused and avoid barriers

* Stay focused on what you need to change. Like any effort to change behavior, you must remain focused on the actions you take to reinforce the investing behavior you wish to have. If you think you are not focused on how to change your behavior, then take a break from your investing until you recover your focus.

* Determine how you will understand your losses. Keep in mind that losses are part of investing. Learning how to deal with them is one of the most important pieces of successful investing behavior. You have to define what your loss looks like through your stop loss and reasons for the trade. You must accept the loss as part of the trading. Accepting a loss is a trading skill that is a crucial behavior. Making a losing trade ahs to be an acceptable process in your trading strategy, you’ll eliminate the emotion and fear that comes from a loss. You’ll jump to the next opportunity without fear.

* Become an expert at one investing strategy: There are many ways to evaluate the market and select stocks that offer good investment opportunities. Don’t try to understand every perspective on a stock. It is best to get to know one reliable investing strategy. In that way, you will gain confidence in your investing access. This knowledge will form a valid base for your investing. And when you become an expert you can expand your knowledge base by adding a new approach.

Think twice to avoid barriers

* Think in probabilities: The market is in permanent movement. It forces the investor to continually evaluate the risk-reward ratio of each opportunity. You can’t move the market, that’s why you need to rate what is the greatest possibility that will move the market, key sectors and the stocks you are watching. Evaluating what is most possible to happen in the sense of probabilities could help you to make a valid investing estimation.

* Learn how to be objective: Many investors want to believe that the market will do what they think it should do, rather than what it actually does. Any limits you place on the market will usually turn out to be wrong. The market does what the market does. Investors are best served if they maintain an objective perspective. If you are neutral, then you will not feel any pressure to move quickly. You will not be afraid to make an investment decision. And the most important, you will not force your opinion on the market, but rather sense what the market is trying to tell you.

Do not expect this to happen overnight. Removing the barrier is a long-term process. But if you have a defined plan, you will be able to create a program to remove the barriers that keep you from achieving success as an investor.

31st August 2018
How To Start Trading?
Trading the stock market is easy if you know how to start.

By Guy Avtalyon

How to start trading? First of all, never do it on your own. Ask to be advised by some experts. It is always best to access a financial advisor who will tell you how you should invest or trade, established in your financial situation, and risk appetite. Talk to others who invest.
Read books, journals, and newspapers for recommendations. You can talk to your stockbroker for advice but don’t listen to everything he says.
Always take a second opinion as brokers might have vested interests. In the beginning, it is best to go for known brands and big companies that have a good business status.

What do you need to know before you start trading?

Without knowledge, you may feel lost. Let’s make clear the basics because you’ve decided to join the crazy world of trading stocks and shares.
You have to know that shareholders usually have a right to vote at company conferences.

Of course, if you own just one of the three billion Facebook shares don’t expect Mark Zuckerberg to listen to your ideas!
Another thing you need to know is that a company’s shares are indivisible.

You cannot buy fewer than one share.

Shares were pieces of paper that shareholders kept in a safe but since the ‘90s, this all changed to virtual shares. Before you start trading stocks, you have to buy them! You can do this in many different but easy ways.

Some companies allow you to buy their shares directly from them but If you can’t purchase the shares directly or you’re not sure which company to invest in, ask your bank. Also, banks offer an online trading service connected to your existing accounts.

Ask your bank to see if this option is possible. If your bank doesn’t offer a trading service, you can buy shares through a brokerage company. You can find many of trusty brokerages, just do a search. But be cautious. Never pick the first you find, read some reviews, ask around, visit forums.

Brokers buy and sell securities in exchange for a commission. You can set up a simple brokerage account online or hire a so-called ‘full-service broker’ who will trade stocks on your behalf. They can be a consultant or advisor for you. This will cost a little more but it is worth it because you know nothing about shares or stocks or trading or investing.

How to start trading?

So, you want to start trading stocks or CFDs, but you have always remembered three things:
1. Never invest more money than you can afford to lose. With shares and CFDs, there is a risk of losing all the money you have invested.
2. Follow your head, not your heart. Your heart will always pull you towards certain stocks. Stop and think. Only invest in companies that seem able to grow their profits, despite your emotions.
3. Never invest your savings in just one company. ‘Never put all your eggs in one basket,’ as the mantra goes. Place your investments across many different companies.
This way, you’ll significantly decrease the risk of loss, and increase the chance to multiply your investment.

When you set up your online broker account, simply take the leap and make your first trade.

Start with small, 1, 10, or 20 shares that will serve its purpose and bring you in the game.

If trading with real capital isn’t viable, start with a simulator for virtual trading. Numbers of different online brokers offer virtual trading for practicing and learning.

It’s too easy to lose money in a stock exchange, so start with a virtual where the money is virtual, but the stocks, stock prices, are real. Maybe the best way is to start your trading journey with virtual money, understand how they are performing, recognize when you can sell them, is it the right time, etc.

Before you start putting your real money, you would learn the tricks of the trade with virtual money. Take it slow. You’ll need time to understand everything. Not even the most experienced traders know everything. Most important for beginners in trading is to have a trading plan, trading strategy, and to stick to them. Also, never forget to keep up your trading journal. That is an amazing tool. Add to it all your entries, exits, price of assets you trade, at which price you bought it, and at which you sold it. That will provide you a full picture of how successful your trades were. Do it with virtual trading in a demo account, also.
28th August 2018