Tag: trading

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

  • Bitcoin Bear Market Is Far From Over

    Bitcoin Bear Market Is Far From Over

    2 min read

    Anniversary to Bitcoin!
    Bitcoin and the Bear market? Why the bear markets are the best time to be in crypto?

    Recently, Bitcoin made a strong rally. Enough to break past the neckline of its double bottom at $3,600 to $3,700. This can be an uptrend underway. If buyers keep the price above the area of interest, it will be possible. 

    If you apply the Fibonacci retracement tool on the latest swing low and high shows that the 38.2% to 50% levels span the former resistance. That might now hold as support. That means bitcoin could recover to around $4,035 and beyond.

    Analysis indicates that the current Bitcoin price chart entirely mirrors that seen in late-2014 and early-2015, this market’s last moody bear market.

    What happened then?

    2013 marked a very significant year not only in the history of Bitcoin’s bear market but in the history of Bitcoin as a whole. In October 2013, FBI officially shut down the Silk Road. 

    Silk Road was an online black market. It also represented the first modern darknet market. However, Silk Road’s represented the crypto asset’s first form of widespread user adoption.

    The Silk Road closed activity in October of that year. But the price of Bitcoin continued to rally until the end of November before the market had fully systemized the effects of that event.

    It is impossible to know when Bitcoin has reached its peak while events are ongoing. Even more, the media didn’t help paint a clear picture of reality. At the time, even as the price of Bitcoin began dropping, headlines were incredibly optimistic.

    But, during Bitcoin’s reversal period in January 2015, the general sense in media’s headlines was negative.

    These headlines did not provide any positive signals to indicate the bottom of Bitcoin bear market, at that time.

    Let’s go back to 2018! What is happening now with Bitcoin?

    Although many have claimed that Bitcoin, has finally touched the bottom in 2018’s market downturn, data indicates that many investors still see plentiful amounts of value in blockchain-based assets.

    The research group divulged that the 30-day moving average of Bitcoin flow into investors’ wallets has been on the rise, eclipsing the $400 million milestones as of November 1st. Well, $400 million out of Bitcoin’s current $65 billion market capitalization isn’t especially important. In June, this same figure was $300 million. In that period, the price of Bitcoin was approx $6,000. Those days it is about $3,750. November’s inflows should be seen as a bullish indicator.

    The data suggests that investors have sought to accumulate Bitcoin at lower prices. Many investors started to allocate more capital towards Bitcoin, due to their long-term belief in the asset’s underlying value.

    That wasn’t the case only with “personal wallets”. The institutional players via Grayscale Investments saw an increase in Bitcoin balances. It is an investment-centric subsidiary of the conglomerate that is Digital Currency Group (DCG).

    Since the start of 2018, Grayscale has seen its Bitcoin coffers swell by 30,600 BTC to 203,000 total.

    Now it accounting for more than 1% of the asset’s total circulating supply.

    Bitcoin Bear Market Is Far From Over

    As seen in the chart above (sourced from LongHash), the wallets pertaining to Grayscale’s GBTC, a vehicle that allows retail and investors to purchase customized BTC on the U.S. OTC market, has seen month-over-month increases.

    Markets move solely based on the demand from investors. Hence, if investors think a large rally cannot be maintained throughout the years to come, then some of the largest markets can experience steep sell-offs.

    Bitcoin made the recovery and market watchers are pinning it on a number of factors. First is the Coinbase offering of crypto to crypto trading that could boost volumes in the retail sector. Next is the report that Mark Dow, the former IMF economist that opened a major short play on bitcoin after it hit its all-time highs, closed his remaining position also led many to think that he may already be seeing a market bottom.

    Bitcoin could take a longer time to recover than in previous years.

    Because the market is more structured.

    But, it is wrong to claim that Bitcoin could drop to zero because of its 85 percent decline in price this year. This because, in the previous year, it demonstrated a 1,850 percent gain. And a major correction was expected after such a large movement.
    But many aren’t convinced that lines can be accurately drawn. The Bitcoin industry has matured beyond measure in the past year alone, and even more so in the past four. Moreover, others have claimed that the worst has yet to come for crypto assets.
    Vinny Lingham, CEO of blockchain-centric identity ecosystem Civic, explained that trading within the aforementioned $2,000-wide range is likely to continue for a minimum of three to six months, a common timeline in the eyes of Bitcoin’s short-term bears. The entrepreneur added that if a convincing breakout isn’t established by the end of Bitcoin’s six-month range, a strong foray under $3,000 wouldn’t be out of the realm of possibility.

    The Civic chief noted that Bitcoin will likely remain range-bound between $3,000 and $5,000 “for a while.”

    But Fundstrat’s Tom Lee said: ”Bear markets are a ‘Golden Time’ to be in crypto.”

    Bitcoin bear market is far from over, this is the opinion of analytics.

    Risk Disclosure (read carefully!)

  • Position Trading

    Position Trading

    Position TradingWhat are the benefits and disadvantages of this trading style? All explained.

    By Guy Avtalyon

    The position trading is an approach to trading in which the trader either buys or sells contracts and holds them for an extended period of time. It also refers to the longest term trading. You can have trades that last for several months to several years. This kind of Forex trading requires a good understanding of the fundamentals. Let’s say it isn’t for traders without patience. So, why is that?

    What does Position trading require?

    Patience. Fundamentals force the long-term trends of currency pairs. Hence, it is very important that every new trader understand how economic details can affect the domestic financial outlook. In this kind of trading, the trader has to hold the trade for a long time. Stop losses will be very large.

    That indicates that the trader must have stable capital. Otherwise, the trader will get a margin.

     

    What does taking a position trading mean?

    Taking position trading means a position you take when you buy or sell securities. If you buy  a stock, future or option, it refers to a Long Position

    But if you sell-short a stock, future, or option, it is Short Position. In short, the word position describes your action and view on security/shares/futures, etc.

    By taking the position in the stock is something you do to earn money from the stock market.

    Very simple.

    How to earn money in the stock market?

    By purchasing a stock (called taking the position) and then selling that stock (closing the position).

    Or by selling the stock (called taking the position) and then buying that stock (closing the position).

    However, the duration of your position can fluctuate depending upon your strategy.

    It could be for a few seconds, or a few minutes, or a few years, or 20 years. It depends on your personal psychology and goals you want to achieve.

    What is the basic analysis of this trading method? 

    Read the charts or use some fundamental analysis before trading.

    When you buy a particular stock always lookout for high volumes.

    Of course, don’t buy all the shares at once. Buy it in installments. You have to buy at a lower price. So averaging can helps a lot and don’t forget to put stop loss.

    Sometimes market swings beyond our expectations and things may not go well. In that case, you need to exit on time and always make a substantial profit and move on.

    You are not married to the stock, so you can always buy it when it corrects.

    What is position trading?

    Let’s say it again, the position trading, also known as ‘trend trading’, can best be described as a ‘buy and hold’ method.

    If you want to become a forex position trader you must be the independent brain. Sometime you must ignore popular views and make your own presumes like, to where the market is going.

    You must understand fundamentals and have good vision into how they affect your currency pair in the long run. First of all, actually, you must have enough capital to withstand several hundred pips if the market goes against you.

    Long-term Forex trading can net you several hundred to several thousands of pips. If you are too excited being up 50 pips and already want to exit your trade, examine moving to a shorter-term trading style.

    You have to be very patient for this trading style.

    For position trading, historical points of support and resistance are maybe more important than indicators. The most important is to draw straight horizontal lines and use different time frames. The longer the time frame, the more important level. For this trading style, once again, you must have enough starting capital, you must be patient.

    So, what might entice you to try this style?

    Firstly, position trading is very convenient for new traders. The speed isn’t as wild as day trading or swing trading. Hence, you have a bit more time to plan your activities and create a trading plan. On a wider level, position trading can also be more attractive in different types of markets.

    For example: If you are in a bull market where there are strong emerging trends, it can be a good time to engage in position trading.

    You will not see the result fast, it will take time. We are speaking about months and years, not hours or days.

  • Trade Crypto And Stocks / Forex – How To Do That

    Trade Crypto And Stocks / Forex – How To Do That

    4 min read

    Trade Crypto And Stocks / Forex - How To Do That

    • If you understand how the financial markets are structured you can use the same skill and experience to profit in all three.

    At first, we have to define the difference between crypto and Forex/Stock trading because you have to have theoretical knowledge.

    Crypto trading, or cryptocurrency trading, is simply the exchange of cryptocurrencies. Like in Forex, you can also buy and sell a cryptocurrency for another, like Bitcoin or altcoin for USD and Euro.

    The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices.

    Stocks trading is the buying and selling of company stock – or derivative products based on company stock – in the hope of making a profit.

    Let’s go further!

    HOW TO TRADE CRYPTO

    Crypto shows bigger growth than stocks or forex. Honestly, all of these types of investment are risky.

    While Bitcoin is not the only digital currency on the market, it is indeed the first and most popular one and stands as the digital gold within the industry. The technology behind cryptocurrency holds a large part of its value. The secure way to identify a transaction and the way to transfer funds.

    If you want to trade cryptocurrency you need:
    1) A cryptocurrency wallet (or two).
    2) A cryptocurrency exchange (or two) to trade on.

    There are only a few things to know about trading cryptocurrency.

    Trading cryptocurrency is simple to start. Yeah, it’s easy. 

    But there are some essential aspects to understand before you start trading. And this is basic friendly advice to mull over. This not professional investment advice.

    Bitcoin mining, is it profitable

    I’ll explain on the example of Bitcoin.

    There are three ways you can trade Bitcoin:

    1 Buy the underlying from an exchange or online cryptocurrency broker

    For those who are willing to actively safeguard their Bitcoin, owning the underlying is clearly the way to go.

    But prudent steps must be taken to mitigate the risk of Bitcoin theft or loss of private keys.

    Diversifying holdings across wallet types, using two-factor authentication and strong passphrases, can be helpful.

    2 Trade (buy/sell) a CFD (Contract for Difference) derivative and hold cash margin with an online forex broker or multi-asset broker.

    Active traders looking to speculate on Bitcoin over the short or medium term can count that using an online forex broker will provide them with 24-hour trading. And potentially lower margin, and the ability to go either long or short.

    So, it is good!

    Because of counterparty risk, choosing a broker is just as important as finding one with the best trading tools or commission rates.

    3 Buy a publicly listed security related to Bitcoin and hold shares with an online stockbroker.

    For stock market investors, investing in Bitcoin indirectly through a listed security such as an ETF, ETP, or trust may be suitable for those looking at taking a passive position.

    Active traders might find the limited trading hours and potential lack of volume a limiting factor that could hinder their trading.

    Overall, using listed securities that invest, track, or hold Bitcoin can be a viable alternative to diversify away from the risks of margin trading. Or safeguarding private keys when buying the underlying.

    HOW TO TRADE FOREX

    Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade.

    You can trade currency based on what you think its value is. Like, for instance, you think a currency will increase in value, you can buy it. But, if you think it will decrease, you can sell it

    Trade Crypto And Stocks / Forex - How To Do That 2
    All forex trades involve two currencies because you’re betting on the value of a currency against another. Think of EUR/USD, the most-traded currency pair in the world.

    EUR, the first currency in the pair, is the base, and USD, the second, is the counter.

    When you see a price quoted on your platform, that price is how much one euro is worth in US dollars. You always see two prices because one is the buy price and one is the sell.

    The difference between the two is the spread. When you click to buy or sell, you are buying or selling the first currency in the pair.

    Since the euro is first, and you think it will go up, you buy EUR/USD. If you think the euro will drop in value against the US dollar, you sell EUR/USD.

    If prices are quoted to the hundredths of cents, how can you see any return on your investment when you trade forex? Leverage!

    When you trade forex you’re borrowing the first currency in the pair to buy or sell the second currency.

    To trade with leverage, you simply set aside the required margin for your trade size. If you’re trading 200:1 leverage, for example, you can trade $2,000 in the market while only setting aside $10 in the margin in your trading account.

    However, leverage doesn’t just increase your profit potential. It can also increase your losses. If you are new to forex, you should always start trading with lower leverage ratios, until you feel comfortable in the market.

    HOW TO TRADE STOCKS

    Stock markets are places where buyers and sellers of shares meet and decide on a price to trade.

    It is important to know that the corporations listed on stock markets do not buy and sell their own shares on a regular basis. When you buy a share of stock on the stock market, you are not buying it from the company, you are buying it from some other existing shareholder.

    There are many stock exchanges, many of which are linked together electronically which means markets are more efficient.

    The prices of shares on a stock market can be set in a number of ways, but most the most common way is through an auction process where buyers and sellers place bids and offer to buy or sell.

    A bid is a price at which somebody wishes to buy, and an offer (or ask) is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made.

    If there are many buyers and sellers at sequentially higher and lower prices, the market is said to have good depth.

    Stocks are quoted by their ticker symbol, represented by between one and four capital letters. They are often loosely representative of the company name.

    Let’s break down what is the market order!

    A market order is simply an order that instructs the broker to buy or sell shares at the best available price. The market order does not guarantee the price you will get. But it does guarantee that you will get the number of shares that you want.

    When an order is completed, it is said to be filled.

    Stop orders are contingent on a certain price level being attained to activate the trade and your trade will be executed only when what you want to buy or sell reaches a particular price.

    If you understand how the financial markets are structured you can use the same skill and experience to profit in all three.

    In all three you have to buy low and sell high against the crowd.

    There is no difference.

    Risk Disclosure (read carefully!)

  • Automatic Trading – What Is It

    Automatic Trading – What Is It

    3 min read

    Automatic trading - what is it
    Automatic trading, also known as Algo/Algorithm trading is a somehow new field in the financial markets. 

    It’s there since the 90′, but it started to get much more popular in the past few years, for 2 main reasons:

    1.       The technologies are way better to handle that kind of challenges – Dealing with a lot of data:
    2.        Save it (it’s millions of giga-bytes so you need special server farms around the world, and that’s something that only available in the past few years)
    3.      Analyze it – Create an algorithm to go over that amount of data and also issue insights out of the data. This can take millions of years.
    4.       Find a way to keep adjusting the algorithm. In the financial markets – what happened yesterday IS NOT a guarantee that it will act the same today. So, we need to know what happened yesterday, but also find a way to give it the appropriate weight in our calculations
    5.       Many non-legit bodies got into the industry to try and take money from innocent customers, claiming they succeeded to figure it out.

    Our aim, here in Traders Paradise, is to help you, our visitor, in understanding the risks in automatic trading.

    Important to know (and I’m full of hope you’ve learned it by far in life): There’s no profit without the risk.

    We will talk about how automatic trading systems work, under what circumstances you change / diverse strategies, what’s available in the market and why you probably won’t have access to the automatic trading platforms that truly works.

    Let’s start from the beginning – Why is it so difficult to create an automatic trading software.

    The short version of the answer is – the financial markets keep changing on a minute basis.

    What I mean-

    1    In an asset (like stocks) level:

    Say we’re talking on Apple, and they issued an announcement that iPhone sales are going higher than predictions – The price will rise. Now, studies show that in a matter of a few seconds the price will already include the latest news.

    From this point there are 2 options – Either the price keeps going up or it will drop lower. If it’s rising anymore – we definitely know that some people will sell their holdings, as it reached their strategy profit point of exit. So if they’re more than the ones who want to but – price will drop. So it’s kind of a gamble.

    Ways to avoid this – invest in two companies that are competitors, so that when one is dropping the other is rising. This called hedging the investment. 

    2    In an industry (such as technology) level:

    In this level, it’s more tricky, because if an entire industry is dropping (regardless of a specific company) then it can affect our whole portfolio. Several things can trigger it, such as a big player comes with an announcement that affects the whole industry. Like, if IBM (that creates chips for most of the big companies in the world) will announce that we reached a “no way to overcome” scenario. Then all the industry can lose some points. Until someone else will come with some better news.
    Ways to avoid – Diverse your portfolio with serval industries like motor, pharma, and technology.

    3    In a market level:

    This can happen when an announcement or new policy comes out of the main bank or the government, or when a global incident is occurring – The whole financial markets can drop, and then ALL portfolios will lose (except the ones who bought ‘short’ position).
     

    Ways to avoid – VERY DIFFICULT. It happens in surprise and there’s no way to predict it. But you can still avoid some if you add short positions to your portfolio.

    So, those are, in general, the major points we need to look on when creating a portfolio.

    This created an environment that is impossible for short-term predictions.

    Next question is – How do we choose our assets? Or how we create a good portfolio?

    Let’s think about it for a second:

    If I read on the finance news about an asset that is going high. I must think – yes, this is the asset I was waiting to buy. Right?
    Wrong.

    Because there are many other people who read the same news like me.

    Automatic trading - what is it 1
    And if we all buy now, at the top, we’ll all be the “stupid top”, just like the people who bought bitcoin at a price of $15,000 and saw it drops to $5,000. Someone made money in these actions, but some lost a lot! (Never forget the simple rule of – when someone is buying it means there’s someone who’s selling)

    So,

    Do we need to go short on that asset?

    Nope. Short is a VERY dangerous position. Why? Because only in short you can lose MORE than you initially invested

    How’s that possible: When going long – it means you believe that price will rise,

    For the easy example, we say there’s an asset cost $1 per share, and we decide to buy only 1, so it costs us $1.

    Now, this company had been acquired by another company and overnight the asset is now worth $20. Pretty nice huh?

    And if overnight the company bankrupted – then we’d lose that $1.

    Now let’s say we went short on that asset –

    If it bankrupted we doubled our money, but in case the price jumped to $20 – we, then, lost $19 on a $1 investment.

    That’s brutal!

    So, shorts are something we try as hard as we can to avoid, but sometimes it’s the best strategy. We’ll talk about it later in another article.

    Back to the asset we just read is exploding and rising up. What are we doing?

    NOTHING!

    If it’s already on the news – we missed the train.

    So what’s the asset we should buy? It doesn’t matter. Why you probably wondering… And that brings me to the next question:

    So what is automatic trading software trying to do?

    Most people think the purpose is to find either an asset is before or during an explosion and recommend that asset to the user, right?

    But wait…

    I got into a position. When do I get out?!?

    That is the real question.

    See, a good asset position is built on 3 things:

    1.       When to get in
    2.       When to get out
    3.       Which direction we choose (long/short)

    That’s it.

    But, when we start to break it, we see that there’s one of them that is the most important.

    Yes, I know you already know which one it is!

    It’s “When to get out”.

    This is the most important thing in every single trade you will ever do, and what sucks about it is that you’d know if you got it right only on in retrospective look. Never at the same time of action.

    THIS is what good automatic trading algorithm supposed to do, and this is what our algo trade software does. It doesn’t matter which asset you choose nor when you get into a position or which direction you go – It’s ALL a question of when you got out!

    If you were wrong about the direction – you need to get out ASAP, but with a minor loss as you can.

    If you got the direction right – you want to optimize the profit you can, before price bounces back. 

    That’s the whole idea, and that’s what we created.

    How is Automatic trading even work?

    Well, it’s kind of a secret… But we’ll tell you what we can and we’ll let you use it to see for yourself (for free of course).

    But basically how it works is we have many supercomputers that work together on sets of data, to create the most optimized exit strategies for every asset we choose.

    It’s working according to historical data, but it gives the right weight to every piece of data.

    In other words, we, as people, could never understand why the software does what it does.

    We know how the math was created, but this algorithm is an unsupervised algorithm (read more in the previous article)

    It had only one rule to follow: “The more profit you gain, the better this strategy”.

    That’s it. Like when you plant seeds in your backyard, water it, and then you wait for the fruits? Same thing, but way better fruits…

    Want to get access to our software once it’s ready for outside users? Subscribe to our newsletter and we’ll let you know when it’s ready. Also, you’ll get more interesting articles on how we solved this almost-impossible technology and math problem. You can ALWAYS unsubscribe.

    Risk Disclosure (read carefully!)

  • TradeInvest90 – Why Trade With Them

    TradeInvest90 – Why Trade With Them

    3 min read

    Mnogi muškarci se suočavaju s problemima u seksualnom zdravlju koji mogu značajno utjecati na njihov život. Stanje poput ovog može izazvati osjećaj sramote i tjeskobe, te često dovodi do izbjegavanja intimnosti. Važno je da se o ovim problemima razgovara otvoreno, jer su rješenja dostupna na različitim platformama. Na primjer, mnoge pouzdane ljekarne nude pomoć putem pouzdana web stranica ljekarne, gdje se mogu pronaći informacije i proizvodi za liječenje. Za više informacija o dostupnim opcijama, možete posjetiti farm-hr.com.

    La disfunzione erettile può influenzare profondamente la qualità della vita di molte persone, generando ansia e stress. Esistono diverse opzioni disponibili per affrontare questa problematica, tra cui trattamenti farmacologici. Per chi cerca soluzioni, è possibile **comprare efudex online** per un approccio piÚ discreto e conveniente. Ulteriori informazioni e opzioni possono essere trovate visitando ****.

    La disfunzione erettile può influenzare profondamente la qualità della vita di molte persone, generando ansia e stress. Esistono diverse opzioni disponibili per affrontare questa problematica, tra cui trattamenti farmacologici. Per chi cerca soluzioni, è possibile **comprare efudex online** per un approccio piÚ discreto e conveniente. Ulteriori informazioni e opzioni possono essere trovate visitando ****.

    TradeInvest90 - Why trade with them

    • Traders Paradise delves into all aspects of this online trading brokerage.

    ABOUT

    TradeInvest90 is a relatively new and unregulated trading brokerage. The question is how do they compare to the competition and can they be trusted? You will find out in this in-depth review. Traders Paradise delves into all aspects of this online trading brokerage and shines a light on the products and services they provide.

    TradeInvest90 is an international online trading brokerage. It provides innovative trading services to traders all around the globe. The brokerage provides trade, invest and profit from the global financial markets. That include over 1000 top class assets.

    Where and how it originated

    TradeInvest90 was established in March 2017 and is owned and operated by Capital Force Ltd. The brokerage serves the international markets through their online trading platform. They are based out of Oceania with their company headquarters located in Samoa. As TradeInvest90 is an offshore trading brokerage, they have not acquired any sort of regulation from reputable regulatory authorities but claims to operate their services within the means of the strictest regulatory requirements.

    TradeInvest90 Trading Platform

    TradeInvest90 provides its very own proprietary web-based trading platform. The ever-popular MetaTrader 4 (MT4) trading platform is not offered. So, traders will have to learn a new platform. But, the TradeInvest90 trading platform is incredibly easy to learn and use. Their platform has a fantastically designed user interface that is fast and easy to use. That provides traders to trade multiple financial instruments all in one place. That is a great opportunity for traders who like to diversify their portfolio with one trading platform. The platform features a standard charting package with basic features for technical analysis.

    TradeInvest90 - Why trade with them 1
    You can find a variety of technical indicators, chart types, time frames, and drawing and analysis tools. This trading platform is satisfactory for most traders needs. But some of the traders could wish more recognized trading platforms like the MT4 and MT5 trading platforms. For such we have only a few words: TradeInvest90 is simple and easy to use trading platform.

    Very good for beginners

    The custom-made and in-house developed online trading platform has a user-friendly operating interface. That allows users to trade comfortably. Clients are not required to download anything on the PC. Instead, it can be accessed online using a computer connected to the internet. On the other hand, traders can also use the company’s online trading platform on all on-the-go devices. Such as mobile phones, and tablets. The supported versions of the online trading app for Android or iOS-based devices can be downloaded from Play Store and App Store respectively.

    Exchange markets and tradable instruments

    Traders at TradeInvest90 have access to over 1000 world class financial assets across 5 global markets including forex, stocks, commodities, indices, and cryptocurrencies. Traders can trade CFDs on the latter three markets and can participate in forex trading on the world’s most popular currency pairs. A complete list of asset index is available on the company’s official website. Clients can click the following link to access a comprehensive range of asset index.

    See below, a quick overview of the CFDs and Forex markets.

    CFDs

    6 commodities
    6 indices
    Over 100 stocks
    Trade on the leverage of up to 1:200
    Trade both rising and falling markets
    24 hours a day, 5 days a week
    Risk management capabilities

    Forex

    Trade Majors, Minors & Exotics
    Nearly 70 currency pairs
    Trade on the leverage of up to 1:200
    Trade both rising and falling markets
    24 hours a day, 6 days a week
    Risk management capabilities

    Types of accounts

    This company offers a standard account only. The minimum deposit is $250. All you need is to open an account at TradeInvest90 with the company’s recommended broker to get started. The broker offers Forex, binary options and CFDs trading all in one account. It has fixed spreads in place. It charges zero commission.

    TradeInvest90 - Why trade with them 2
    Clients can expect their investment to grow by 400% over time. It has state of the art trading facilities available for clients wishing to invest more than $250 including customized trading analysis and charting tools. It also provides its account holders dedicated customer support round the clock, six days a week.

    Fees and commission

    TradeInvest90 offers its traders zero commission trading by incorporating the fees into fixed spreads. The fixed spreads are higher compared with most of the competition. For instance, the fixed spread on the EUR/USD currency pair was 3 pips which are 1.5 pips higher than the industry average. Also, traders have to pay an account maintenance fee of $7.50 per month. Also, traders incur a profit clearance fee. Here are the profit clearance fees associated with the number of profits cleared.

    250$ or less = 1.5$
    $251 – $500 = 2.00
    $501-$1000 = $3.00
    $501-$1000 = $4.00
    $1001-$2500 = $4.00
    $2500 or more = $5.00

    Other penalties

    If traders account is inactive for longer than 31 days, they have to pay.fee of $10.00 per month. Honestly, this time frame could be too short. Withdrawal fees are of 3.5% and a minimum withdrawal fee $30. We have to say, the fees on traders by TradeInvest90 are pretty much high. But, clients can withdraw their funds as and when they wish to. The company offers a wide range of deposit and withdrawal methods to its clients including debit cards, credit cards, payment via e-wallets (Skrill, Neteller), bank transfers, web money, and other local payment methods.

    Tradeinvest90 customers can withdraw their funds and benefits whenever they need to when they pass the compliance procedures. It could take 5-7 business days to process the withdrawal request.

    Demo account

    Unfortunately, the company doesn’t offer any demo account. We do hope that in future it will begin offering demo accounts as well.

    Customer support

    It looks like this broker is created with great intention to be helpful to traders who just started. The broker understands the importance of excellent customer service which is excellent for novice traders. It offers 24/6 dedicated customer support to its clients. The company ensures the availability of professional and competent staff round the clock to assist its customers.

    Clients can contact the company using a telephone line. This is wonderful because of the opportunity to talk with a real person. Inquiries can also be made through email at [email protected]. A live web chat feature is also available on the company’s official website to facilitate clients on a runtime basis.

    The bottom line

    We made a very careful review. TradeInvest90 is one of the best online brokers available in the market. It’s user-friendly and award-winning trading platform. It definitely states of the art trading tools make it stand out of the crowd. It provides excellent customer support to its clients round the clock. Recommended for novice traders as well as for advanced.

    You can also find more companies we recommend in our wall of fame, and be aware of the ones inside our wall of shame.

    Risk Disclosure (read carefully!)
    Screenshots from website www.tradeinvest90.com

  • Mining with GPU versus CPU

    Mining with GPU versus CPUBoth CPUs and GPUs are inventions made from billions of microscopic transistors packed on a small piece of silicon. But they have some differences.

    By Traders-Paradise Team

    To find the answer, we must first look into how mining works. A computer guesses a string of characters and puts them through a hash function to try to reach an expected hash output. However, the computer has no way of knowing how to get to that output. Let’s say the output needed is “6”. The computer doesn’t know what calculations are used to generate the output; it could be 3+3, 5+1, 6+0, 3×2, and a nearly limitless number of other functions. Once the computer has found an input string that works, it can be easily verified by the other computers.

    Go back to CPU and GPU!

    A CPU is great for multitasking, such as saving documents, editing video, deciphering instructions, running the OS, and much more. However, because it needs to figure out what to do each time, it is a lot slower than a GPU. Think of a Swiss knife. The knife itself may not be very useful, but it has a lot of different tools attached.

    What is CPU

    The CPU, or central processing unit, is the part of the computer that performs the will of the software loaded on the computer. It’s the main executive for the entire machine. It is the master that tells all the parts of the computer what to do – in accordance with the program code of the software, and, hopefully, the will of the user. They are designed to perform very complexly, and often changing in the mid-stride, operations. Most computers have multi-core CPUs nowadays (which is almost the same thing as having multiple CPUs in a single physical package), and some computers even have multiple CPUs.

    The CPU is usually a removable component that plugs into the computer’s main circuit board, or motherboard and sits underneath a large, metallic heat sink which usually has a fan, and few are cooled by water.

    What is GPU

    The GPU, or graphics processing unit, is a part of the computer for the video rendering system. The typical function of a GPU is to assist with the rendering of 3D graphics and visual effects so that the CPU doesn’t have to. Powerful GPUs are needed mostly for graphics-intensive tasks such as gaming or video editing.

    These days, miners are moving quickly to GPU because when GPU was discovered it was said that, it could offer more hash power compared to CPUs, its cost is lower and can save electricity.

    Why mining with GPU

    A CPU is designed primarily to be an executive and make decisions, as directed by the software. For example, if you type a document and save it, it is the CPUs job to turn your document into the appropriate file type and direct the hard disk to write it as a file.

    CPUs can also do all kinds of math, as inside every CPU is one or more “Arithmetic/Logic Units” (ALUs). CPUs are also highly capable of following instructions of the “if this, do that, otherwise, do something else”. A large bulk of the structures inside a CPU are concerned with making sure that the CPU is ready to deal with having to switch to a different task on a moment’s notice when needed.

    Differences

    A GPU is very different. Yes, a GPU can do the math, and can also do “this” and “that” based on specific conditions. However, GPUs have been designed so they are very good at doing video processing, and less executive work. They are designed to do a high number of simpler operations than CPU and to do them quickly.

    GPUs have large numbers of ALUs, more so than CPUs. While CPUs can have up to a handful, modern GPUs have between 1.500 and 2.800 ALU. As a result, they can do large amounts of bulky mathematical labor in a greater quantity than CPUs.

    That, in a nutshell, is why GPUs can mine Bitcoins so much faster than CPUs. Bitcoin mining requires no decision making, it is repetitive mathematical work for a computer. While CPU can do these calculations one or a few at the time, GPU can do more than a thousand at the same time. The only decision making that must be made in Bitcoin mining is, “do I have a valid block” or “do I not”. That’s an excellent workload to run on a GPU.

    GPU can mine much faster than CPU. In order to mine Bitcoin, you must have at least one GPU installed on your computer.
    Also, GPU has the ability to mine different coins such as Ethereum, Bitcoin Gold, and many others besides Bitcoin.

    Why mining with GPU?

    GPU is very good at complex computation, is easily sourced, is standardized hardware, has high resale value.and is easily upgradeable. A GPU is great at doing the same thing over and over again: producing graphics. Normally, this involves performing a mathematical equation with two or more numbers that give an output that is rendered as a pixel. Sounds familiar?

    That’s because it is. This task is exactly like mining – putting a set of inputs through the same function. Because of GPUs when mining has to do this one thing, they can do it very fast. And can do a high volume of these operations, just like drawing a high number of pixels on your screen.

    The choice of CPU in a crypto mining setup doesn’t matter that much because it is only doing telling everything what to do, which isn’t that much of a workload.

     

    The GPUs are the ones doing the heavy lifting. The choice of which GPUs to use is important because you want the best hashing performance.  And you are limited as to how many GPUs you can connect in a rig as each GPU requires at least a single PCIe slot.

    Thus it is important to choose the motherboard carefully as they can come equipped with between one and six PCIe slots.

    Luckily, those slots do not have to be of the x16/x8 kind, and x1 suffice well enough. Hashing performance is often rated at hashes per watt given that electricity is your largest cost after the initial investment in a mining rig.

    Why mine with CPU?

    At the point when Bitcoin was begun, the only way to mine was utilizing Central Processing Unit (CPU) on PC and Bitcoin core wallet. Intel and AMD were the famous names in CPUs. When bitcoin was released you could dig only 100 coins a day using CPU. But it is impossible today to CPU mine bitcoin because of much higher difficulty which gave rise to ASIC (Application Specific Integrated Circuit). Specially designed chips just for mining of a one or the other cryptocurrency.

    CPU was designed to switch between different complex tasks. Hash required proof of work in not very complex mathematical calculations.  And CPU has less arithmetic logical units. So, when it comes to performance in the large calculation CPU is relatively slow. CPU has the ability to mine different coins such as Zcash, Nexus, Hold coin, Reicoin.

    Advantages of CPU mining: there is no specialized hardware required, a very good starting point to enter mining, invaluable educational experience. And it is fun to mine with CPU.

    The bitcoin network hash rate is really high, so in CPU mining there is no longer a guarantee for profit. During the mining process, the miners use fast running hardware to try to solve blocks. And slow CPU hardware can only make a certain amount of hashes in a given time frame. You need very good and fastest hardware for faster hashes.

    Both CPUs and GPUs are creations made from billions of microscopic transistors crammed on a small piece of silicon.
    Trying different hashes repeatedly is a very repetitive task suitable for a GPU. Each attempt varying only by the changing of one number (called a “nonce”) in the data being hashed.

    That is why GPUs can mine Bitcoins so much faster than CPUs. Bitcoin mining requires no complex decision making because it is repetitive mathematical work on the same set of numbers. The only decision making that must be made in Bitcoin mining is, “do I have a valid block” or “do I not”. That’s an excellent workload to run on a GPU which can do a high number of these calculations at the same time.

  • Artificial intelligence and machine learning we can apply on the financial markets

    Artificial intelligence and machine learning we can apply on the financial markets

    What is artificial intelligence and machine learning and can we apply it on the financial markets?How can we apply artificial intelligence to the financial markets

    By Guy Avtalyon

    What is artificial intelligence and machine learning and can we apply it to the financial markets?
    It took us 3 and a half years of research and development until we finally reached a point we can trust our software.

    Obviously you can find all sort of information on the internet about machine learning and AI, like these articles on Wikipedia for example, but the concept is quite simple: You run an algorithm (there are many) on the set of data, and once the algorithm is finished, the software will know how to run by itself on new sets of data, even if it’s never been seen.

    There are 2 types of algorithm methods –

    1.       Supervised – Similar to training a dog: if it does good you pet them, if it does wrong you scold at them. After a while, they will learn how to behave
    2.       Unsupervised – This is the most interesting algorithm out there. This means you give the algorithm a set of data but you DO NOT tell it what is wrong and what is good. It does it by itself.

    So, can you apply those algorithms in the financial markets?

    First, let’s start by learning a bit about how ML (Machine Learning) and AI (Artificial Intelligence) work and its purposes.

    To create simple computer software, we need to insert some scenarios we want it to handle, we add the way we’d like the software to act, and let it run.

    A “stupid” software will ONLY KNOW HOW TO WORK according to the scenarios we entered and taught it.

    An AI software will take the same scenarios we entered and ways to behave we told it to, and will be able to do it NOT only on the ones we told it to but also on SIMILAR scenarios.

    This is basically why AI and ML are the future in any way you can imagine – Because it’s not limited to what the programmer writes in the code, but also it can adjust and act to things that aren’t inside its code and also, over time, will be smarter in handling situations only by itself.

    OK let’s go back a bit

    Scenarios? Ways to behave? WHAT??

    Say we got a lifetime doctor’s records of some people. They are anonymous, of course, because we don’t care who they are. We only care about their DATA.

    Now we want to find something, like, maybe, can we find cancer disease BEFORE the person knows it’s happening – or in other words – Can we predict cancer?

    We can check – are they the cigarette smokers? If yes, how many had cancer?

    This has been the way until now.

    You probably can already guess why it’s not merely enough.

    If they don’t smoke – does that mean they won’t have cancer? We already know it’s not true.

    And sadly there’s a variety of cancers to almost every organ in the human body (cancer is when some cells of our own body stop dying unlike the other cells and the body starts to attack them. Basically, nature makes our body suicide from inside).
    So what can we do if we want to predict cancer?

    It’s simple – We take into consideration as many parameters we can. Like:

    Age, gender, place of living, place of working, family history, doctors’ appointments, and medical record, food and drink habits, etc.

    Those are the objective data.

    We need also subjective data such as happiness in life, the scale of pressure, type of person, etc.

    Once we have ALL this data for every person, we need to do 3 things:

    1.       Check which one of the parameters can, in fact, be some kind of prediction to cancer
    2.       Run a statistics machine learning algorithm (like Naïve Base)
    3.       Use the results to solve a worldwide problem  

    We wish, right?

    Now we get on to the problems of artificial intelligence (AI) and ML:

    1.  Data

    Data is extremely difficult to collect, and then to manipulate. In our example to get these data, we need to cooperate with medical services to get their clients’ data, create a questioner, and send it to all the clients and analyze the data. Though there is such cooperation around the world, it’s still not easy to also get subjective data.

    1. Analyzing big data

    Big data has become a known word around the world.

    There was a time companies said they work with big data and clients threw the money at them.

    But it’s not that simple. Every data you add for the algorithm to learn from – increases exponentially the time for the software to analyze…

     

    Inefficient software may take a very LONG period of time to run.

    Funny personal anecdote, our first AI software we developed to learn how to predict price changes in the stock market looked so genius at first, but after we started running that artificial intelligence and measuring the time it will take to finish, we saw it will take no less than 27,000,000,000,000,000 years from now(!!) Obviously, we couldn’t wait, and in future articles, I will explain how we lowered it to only a few hours running time.

    Let me give you an example of the difference between Big Data and just simple data with a game:

    I chose a number between 1-1000. You have to guess which one is it. But there’s a catch – you need to find the number in as little time possible. How would you do it?

    Think about it for a second.

    Got a solution?

    If you guessed that you should ask me “Is it higher than 500?” and then according to my answer (If I chose the number “990”), the answer is yes. Then your next question will be “Is it higher than 750″… You get the point.

     

    That’s easy, right?

    What if you got a number with 80 digits? Then it might take a long long time until we break this number, maybe even months. And that’s only one running time. What if we need it to create strategies for trading and investing and we need it to go over millions of possible strategies?

    It will take a lot of time.

    As humans, we can’t really comprehend really big (or small) numbers. Like these two questions, I like to ask people once I talk about large numbers.

    1.       If 1 million seconds is 12 days, how much time is 1 billion seconds?
    2.       And, if your salary is $100,000 each month, how long will it take until you reach 1 billion dollars (say you can save all of it each month)?

    You can easily calculate it, but it’s an intuition question, not a math one. Think for yourself, what’s your intuition answers are? The answers will be later on in this article.

    So we’ve talked about what’s machine learning algorithm and a bit on big data problems.

    Now, can we apply artificial intelligence to the financial markets?

    In short, yes.

    But it’s easier said than done.

    It took us 3 and a half years of research and development until we finally reached a point we can trust our software.

    Because other than the ML and big data problems, we face a whole different problem in the field of financial markets, since they act like in a chaotic environment it makes predicting a lot harder.

    And, (and it’s the most important and) because of the spread whenever you enter a position you face an average of 56% against you.

    That’s probably the time to say there are two kinds of players in the financial markets:

    1.       Investors – They invest their money for years ahead and they gain the average rate the market makes (around 8% a year). By the way, according to decades of studies, there’s one stock that if you’re an investor you should put all your money on, and that’s the S&P500 stock (Symbol SPY). In another post, I’ll prove this fact.
    2.       Traders – They usually use time limit (options) or profit/loss lines (if it reaches +X get out with a profit and if it reaches -Y get out in a loss)

    We are on the traders’ side.

    We want to gain more money, faster, and more chances of getting out in time.

    But unlike investors who buy now and then forget about it, as traders we must beat not only the commissions our broker offers us but also the spread (the difference between the lowest price a seller is willing to sell and the highest price a buyer is willing to buy). The spread is usually set by the broker and it’s one of the best ways for a broker to gain profits.

    So, we also know that like in gambling the house always wins, so as in the financial markets – the broker’s always gaining profits.

    Back to our financial algorithm – we found a broker service that lets us collect the financial data, and we’re saving it. Now, we need to analyze it to find patterns. But how?

    In an everyday changing environment, how can we rely on anything? 

    We solved that problem by relying on our algorithm on behavior analysis. We figure that even though the market can change, the forces that control it (the investors and traders) will stay the same (Obviously, they change too, but way slower).

    So we’re talking about collecting on average millions of data and parameters a day for each stock. Once we try to collect 1000 stocks for a few years time you can imagine how much data is inside, so it’s just a matter of creating a super-fast unsupervised machine learning algorithm with only one rule: The most money you can make is the better – and let it run and find the best way to trade by itself.

    Creating artificial intelligence

    In conclusion, it is possible to create an automatic software or some artificial intelligence to trade for you in the financial markets, but it’s EXTREMELY difficult. You need to overcome many problems in serval fields in order to do it. And after you do it, it’s unlikely that you will let anyone use it.

    But we’re different. We will let our subscribers use our algorithm for free, just to have a sense of how it works.

    Subscribe now to get more information about artificial intelligence in the financial markets and to get informed once our algorithm is ready for outside users.

    Our software will let you choose which assets you want to buy, and when – and it will tell you when to get out. Simple, yet important.

    By the way, the answers to the question before are:

    1.       One billion seconds are 32 years
    2.       It will take 830 years to gain one billion dollars if your salary is 100K per month

    Was that your intuition?

    Sign up below to our newsletter for a free test drive on our trading algorithm! Find more about artificial intelligence.

    Top Image Credit: Photo : iStock/MF3d



  • Capitulation of Bitcoin?

    Capitulation of Bitcoin?

    2 min read

    BITCOIN MINING EXPLAINED: HOW IT WORKS, HOW MUCH ENERGY IT USES AND WHAT NEEDS TO BE FIXED
    The bear market has seen the price of bitcoin decline more than 75% from all-time highs set in January. It is defined as a period of depressed activity and sentiment. A total of $60 billion has been erased from the value of all cryptocurrencies over the last week. That’s why many are wondering if the ongoing bear market for the asset class has finally come to an end.

    Bitcoin makes up more than 50% of the entire cryptocurrencies market, in terms of total capitalization. Our prediction is that the bear market may end when bitcoin bulls refuse to cede more ground.

    In the same period, traditional assets were down too. DOW had worst Thanksgiving week since 2011, oil is down 30% in 7 weeks, FAANGs (Facebook, Apple, Amazon, Netflix, and Google) is down almost 40%.

    But somehow, for many people, FAANGs get more attractive as they fall and Bitcoin gets less.

    Markets reverse

    Markets can be reversed in three ways: by the following capitulation, by following a strong trend-setting upwards break, by slowly rolling over reversal which is the hardest.

    Alex KrĂźger, economist and trader tweeted:

    ”Bitcoin crashed hard in the last month, yet the market has not seen capitulation yet. Market direction is uncertain.

    Trying to figure where will the market stops falling, its bottom, is beyond fruitless. Those charting and calling bottoms are best ignored.

    Capitulation of Bitcoin?
    BTC has extremely well-defined resistance areas.

    Books are so empty and volume so low that a whale can make a >5% pop/drop within a few hours.

    I’d expect more 2-way action now and still lower lows eventually.

    Wouldn’t be surprised to see 8200 within weeks.

    A $BTC ETF will launch, making crypto go viral again.

    Security tokens will go mainstream.”

    What is capitulation in the market?

    Capitulation is marked by extreme panic selling, consisting of extreme selling over a short time period. It is backed by high volume that builds momentum until an eventual “bottom” is found. The bottom is a price level where the asset looks too cheap or undervalued to investors for them to allow it to fall any further. In order for a true bottom to be found, many claim a capitulation needs to take the place because it is traditionally the last stage of a prolonged bear market. It’s difficult to consider something to have officially capitulated until after it has occurred. By looking at previous capitulation stages and market bottoms for bitcoin, there are a few similar signs traders and investors can watch out for. That may refer to an official market bottom. 

    Market conditions aren’t the same as they have been in past years. Bitcoin’s 2017 boom has brought new attention. Traders and investors who are left wondering if the asset can ever return to its former glory.

    Such an event can be measured and understood in real-time. But in order to predict bitcoin’s future, taking a look at its price history is perhaps the best place to start.

    It’s not an exact science, and there’s no guaranty history will ever repeat. That said, observing the bitcoin’s past price action yields three possibilities for potential market reversal worth of being discussed and considered.

    If there’s no bitcoin ETF approval, one could argue there’s no reason for bitcoin to resume its bullish uptrend until a market bottom occurs like it did in 2014-2015.

    Bitcoin falls under $4,000

    After days of stagnating at the $4,200 price level, on Saturday afternoon (EST), Bitcoin (BTC) suddenly fell under $4,000, a highly-touted level of support for the cryosphere’s foremost asset. It wasn’t clear why this bout of selling pressure occurred.  But within minutes, sell-side orders pushed BTC (on Coinbase) under $4,200, then $4,100, then $4,000, all the way to $3,800, where the digital asset is situated at the time of writing. Of course, this is worrying. It seems that a temporary floor has been found at $3,800. Crypto traders mentioned this key level before. It is unclear whether there was a catalyst that triggered this sudden loss of support, sending BTC plummeting into its third freefall in a week’s time.

    This rapid 10% loss can be caused by a number of supposed catalysts: the aftermath of the Bitcoin Cash’s November 15th fork, an influx of institutional selling orders, the Bakkt Bitcoin futures vehicle delay, regulatory measures from the SEC, and, arguably the most convincing, the final bout of capitulation from crypto’s “weak hands”.

    Many traders exclaimed that they didn’t expect to see BTC foray under $4,000 ever again.

    The fact of this most recent move downward is that many believe crypto’s bear market isn’t done yet. At least not until a bottom of $3,000 is reached, which is claimed by many traders, including Tone Vays, Anthony Pompliano, and other lesser-known yet knowledgeable industry analysts. That could mean that the $3,000 zone would be a good time to start accumulating.

    The bottom line

    If the current ascending trend line breaks, the price may not find its “bottom” until reaching the high of the prior “mega” bull run, which in this case lies in the $1,200 area. If prices fall to this level, the last hope will be to find new rising support for the entire “bull cycle” to repeat.

    Risk Disclosure (read carefully!)

  • Cryptocurrency Market – How It Works

    Cryptocurrency Market – How It Works

    Cryptocurrency Market
    This market is in permanent growth, its volatility and unpredictable liquidity are a reality.

    By Guy Avtalyon

    The cryptocurrency market has been segmented into mining and transaction, based on the process. In the mining process, there is a greater necessity for hardware than it is a case in the transaction process. Therefore, the market for hardware for the mining process is larger than that for software. Furthermore, a miner can take part in this process with a small investment.

    Cryptocurrency is used for various applications, such as trading, remittance, and payment. These applications drive the market for cryptocurrencies.

    Trading the cryptocurrency market

    Cryptocurrency trading cover exchanging fiat currency with crypto. Also, it refers to exchanging, buying, and selling of cryptocurrencies. It meets some similarities of foreign exchange or forex wherein fiat currencies we can trade 24 hours a day. The number of cryptocurrencies has increased exponentially; currently, there are more than 1,500 cryptocurrencies available. Some of these coins can only be vested using major cryptocurrencies such as Bitcoin or Ethereum. To contribute to initial coin offerings (ICOs), one needs to perform trades or use a blockchain company’s services.

    A large number of players are investing in developing payment gateways and platforms for the payment process of their currencies. When a customer makes a purchase using a cryptocurrency as payment, the transaction often goes through the payment gateway at a fixed exchange rate. It automatically converts to traditionally recognized fiat currency so the merchant can avoid the volatility of the cryptocurrency markets. The payment through cryptocurrency has several advantages. Enhanced transactional security, protection from fraud, decentralized system, low fees, quick international transfers.

    Why invest in the cryptocurrency market?

    Volatility and unpredictable liquidity are a reality of the cryptocurrencies market. You could have made tons of money if you had invested in bitcoin earlier but you would’ve lost a lot of money if you had started investing in the last few months. Because when investing in cryptocurrencies, many traditional assumptions fall flat. Managing risk in financial markets is a well-established discipline. Whether investing in equities, bonds, or currencies usually practices protect market practitioners when they are buying, selling, or intimidating. Risks are typically aligned into different categories. Market risk, credit risk, and operational risk, and complex formula are used to determine how much capital should be kept in reserve to absorb losses. The historical progress in bitcoin has increased risk appetite both for existing and newer traders. It comes with the realization that even a small exposure to cryptocurrencies could turn out to be lucrative.

     

    The cryptocurrencies market is still developing. There are concerns about the potential for fraud and market manipulation. So, investors must take the necessary precautions. These individual risks are much more difficult to measure and manage when investing in cryptocurrencies.

    Institutional demand for digital currencies 

    So far, most institutional investors, including banks, insurance companies, pensions, and hedge funds, have avoided cryptocurrencies. But, that attitude is beginning to change and institutional investors will soon be entering the market in a major way.

    This year (2018) has been challenging for crypto investors. Global market capitalization fell amidst worries over fraud risk, escalating token issuance, and ever-shifting cyber-security threats. Accusations of market manipulation and concerns around potential naked short selling are also doing little to lessen institutional investors’ concerns about cryptocurrencies.

    The effect in the market

    Every big trader can exploit market illiquidity and shifting margin rules and contract limits at inexperienced cryptocurrencies exchanges. This causes a domino effect in the market and institutional investors rather stay away. The complexities and shy institutional uptake for the new cash-settled bitcoin futures products demonstrate that. But the industry must move towards a futures contract that is settled with proper warehousing standards.

    Counterparty risk and custody provisions are even bigger worries for institutional investors. Although cryptocurrency exchanges are significant new platforms, they have been largely designed by the younger generation of developers. Financial institutions care more about the return of capital rather than return on capital. They are wary of the professional indemnity behind these platforms. We believe that now’s the right time for institutional investors to look seriously at making investments into cryptocurrencies. They should take part in the cryptocurrencies market.

    Cryptocurrency market – potentially unlimited upside

    The unpredictability of risk and the potential for high returns is the main characteristic of cryptocurrencies market. The most intelligent approach for new investors might be to hold a very small proportion of their portfolio in cryptocurrencies. This would give some exposure without excessive risk as the market continues to mature.

    By the end of 2017, a lot of portfolio managers had to explain to their clients why they had only achieved single-digit returns in traditional asset classes. At the same time, some crypto funds had earned up to 2,000 percent from volatility. This shows, there is a little downside from investing 1% of the portfolio in cryptocurrencies, but the potential upside is almost unlimited.

    The cryptocurrency market continues to attract new participants and liquidity should improve. This will take the time that’s the truth. Within a couple of years, cryptocurrencies will become a standard part of a diversified portfolio.

    The stock market has a rich and mature history. It has seen many bubbles, market crashes, and economic recoveries. The growth of the cryptocurrencies market continues. If traditional stock exchanges continue to keep away from cryptocurrencies, they’ll miss out on a growing and profitable market.

    Finally, the financial crisis of 2008  actually gave birth to Bitcoin.

  • Margin Trading Definition

    Margin Trading Definition

    2 min read

    Margin Trading Definition
    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.

    Margin Trading 1
    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.