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Everything posted by Josh

  1. You want to buy your first shares and start stock market trading? Congratulations if you followed the previous advice on how to learn about stock market trading. By this time, we will assume you have taken your time, practiced adequately, and sharpened your skills and experiences for this moment. By now, you already have your brokerage fully set up and ready to begin trading, the next question is how to place a stock trade. Once you have funds in your account, the process of placing a stock can be subdivided into five main steps; Choose whether to buy or sell the first step is to always be sure about what you want to do. You can choose to either buy shares long or sell shares short. As a beginner, it would be simpler and smart to keep things simple by buying shares long instead of selling shares long. Insert Quantity Once you have made a determination of whether you want to buy or sell, the next step is to determine the number of shares you want to buy or sell. You can calculate the number of shares you want to buy or sell based on the money in your account by simply taking the total amount of money in your current account and dividing it by the stock’s last prices. For example, if Company Z is trading stocks at $ 10 and you have $2000 in your account, you can afford to buy shares of stock ($ 2000/$10); that translates to 200 shares of stock. Insert Symbol Once you have bought shares, the next step is to insert the respective company’s ticker symbol. The ticker symbol represents the company you have chosen to trade stocks and is a requirement when reading a stock chart. Choose an Order type Even as a beginner stocks trader, you need to acquaint yourself with the common types of stock order types. The common order types include the market order, limit order, stop order among other types. If you are a beginner; market orders are always a good choice for a start as you gain more experience. Review order and place trade It is always good practice to confirm your order before placing the trade to be sure you have filled in all the inputs correctly. Once you have put in all the basic inputs correctly, the place order button will be displayed along with the summary screen once the order has been confirmed. This confirmation summary page can always be deactivated later once you have become conversant and comfortable trading stocks after some time. As a beginner, these insights will be helpful to you and once you become conversant with stocks trading, you will be able to buy and sell shares without having to think about all these, you will have internalized the process and be able to trade as necessary. Take your time, be patient learn, and be consistent.
  2. Hello Danny, Dividend ETFs aim at investing in several stocks that yield a high dividend. Dividend ETFs in a certain country my contain domestic stocks or the stocks that are used worldwide. Most indexes that come up with dividend ETFs hold stocks that yield a high dividend more than the market liquidity level. Dividend ETFs typically follow a certain index, which means that they have passive management. Stocks of the same class appear on several dividend stock-indexes. The stock indexes mimic companies that are in a similar field. Dividend ETFs are largely diversified and produce a high turnover. Their fees are also lower compared to other forms of investments. The dividend ETFs that an exchange-traded fund receives are put in an account that bears no interest until it is time to pay them out. When it is paying time, the dividends are equally distributed to all investors. Dividend ETFs may, at times, be reinvested rather than pay them out in cash. It will not cost an investor more fees so that they can reinvest them. Though ETFs are seen as an excellent investment alternative compared to mutual funds, this does not exclude them from taxation.
  3. Hello Ryan, Cryptocurrencies are continuing to become popular across the globe because of its many unique features. The secrecy and privacy the cryptocurrencies offer, enable the users' identities and transactions to remain hidden. However, there are many worries about the privacy of cryptocurrencies due to the rising cases of cybercrimes. An investor who is most worried about the privacy of the cryptocurrencies they deal in should look for the ones that offer very high security. Monero (XMR) is one of the best cryptocurrency that keeps the identities and transactions of the users adequately hidden. It grown popularity is because of its unknown characteristic. You can neither trace nor link the transactions that take place with Monero. Dash was the first cryptocurrency whose features emerged as the most private. It uses an anonymization strategy known as Coinjoin to keep transactions anonymous. It blurs transactions by mixing different transactions made by different traders and reckoning them as one transaction. ZCash is another most anonymous cryptocurrency. It applies a tool known as Zero-Knowledge Proof that allows its investors an alternative to conceal their transactions. The zero-knowledge Proof also blurs the amount involved in a certain transaction. Verge (XVG) is also an anonymous cryptocurrency though it does not depend on cryptographic tools. It depends on the technology of The Onion Router (TOR). TOR rebounds the transactions of a user over many networks in different locations, hence hiding the user's identity. Privacy is needed in the crypto world; however, there is a risk of illegal use, such as hacking attempts by fraudsters.
  4. Hello Komu, Cryptocurrency simulators allow you to understand the market trends and therefore know when you should make a profit before putting in real money. The market prices in the crypto market are unpredictable; consequently, it is hard for investors to make a profit. If you know well how to trade in the crypto market, then you can go ahead and invest real cash. Consequently, if you are yet to understand how this market works, you should first learn from the market simulators. Bitcoin Mining Profit Calculator is an excellent simulator, especially if you are beginning to invest in Bitcoin and other cryptocurrencies. It gives you information on how Bitcoin works and the factors that affect its price. Bitcoin Hero is another excellent cryptocurrency simulator, especially for those who already know the basics of cryptocurrencies. You can use Bitcoin without necessarily installing it in your phone. Bitcoin's hero is comparable to the real platforms that trade cryptocurrencies. You can put in a certain amount say $10000 that you can use to trade cryptocurrencies such as Bitcoin and Ethereum. Where Bitcoin Hero ceases to act, Altcoin Fantasy starts to work. Altcoin Fantasy is like a competition where an investor trades in opposition to other traders. eToro is another trading simulator that allows you to trade by providing valuable traders whose risk levels are close to yours, and therefore you can follow their trades implement them. There is an eToro account that allows you to practice without having to risk your funds. CoinMarketGame will also give you the experience of being a cryptocurrency trader. There are many other good cryptocurrency simulators, and if you do not take your time and use them to learn the market, you may end up wasting your real cash.
  5. Hello Danny, A good number of people across the globe are adopting the use of cryptocurrencies. Crypto simulators allow you to safely vend many currencies at the same time without necessarily dealing in real money. A cryptocurrency simulator is a global tool that helps investors learn how to deal with cryptocurrencies. A simulator receives information concerning the transactions, the rates of cryptocurrencies, and the orders taking place during a certain cryptocurrency exchange. A crypto simulator also ensures the possible use of funds. This helps both new and knowledgeable investors design better trading techniques. The transactions in a crypto simulator are entered in a journal that will enable you to check how you have been conducting your trades. The crypto market is highly volatile; it is hard for you to predict the market price. It is one of the reasons why investors find it hard to make a profit. The trading simulators will allow you to test the waters in this market before deciding to put in your real cash. Most times, it is hard for an investor to know the best time to trade. Many traders can make losses for trading at the wrong time. You cannot control market volatility; however, by learning the market trends, you will know whether it is the right time for you to trade.
  6. Hello Komu, Investing in CFD allows you to make a profit depending on the direction the market moves without having to own an underlying asset. When the market moves in favor of you, you will make a profit, and consequently, if it goes against you, you make a loss. Making losses is one of the risks that you are prone to while trading CFD. Avoid developing half trading plans. It would be best if you ensure that your trading plan is comprehensive and caters to the problems you may face while trading. Things in CFD are not easy. As you speculate on how the market prices might move, it is safe to understand that the market cares less about your speculation, and it might be wrong in one way or another. Another mistake you need to cease from doing is on market research. It will be safe for you if you thoroughly research the market before you diversify your portfolio. From this, you will comprehend well what you are about to engage yourself in and come up with better opportunities that will up your chances. Ignoring your risk management strategies is another mistake you should avoid. CFD offer you risk management strategies such as stop-loss orders. There is a likelihood that you will make a CFD loss, and to minimize that loss, you need to make use of a stop-loss order. One big mistake that a CFD trader can do is to allow their emotions to overwhelm them. A trader should know that they can either make a profit or a loss. Making a loss is frustrating, and you should not let this frustration bar you from working harder and analyzing the market well to make a profit next time you trade.
  7. Hello Cedric, One reason why CFD attracts many investors is that it gives you leverage. Trading on leverage means that you contribute just a fraction of the full value required. For the rest of the money, the broker lends you. Leverage is automatic, and therefore you need not ask your broker about it. They are thematic funds that a broker applies to complete the total transaction required. Leverage works silently, and therefore, what the trader borrows will be repaid without necessarily having to input anything. One main benefit of leverage is that it helps boost profits. It is also an excellent tool for minimizing losses for your portfolio. For example, if you have both share and CFD positions in the market and go down on your share positions if the CFD position is profitable, then it will consume your liabilities. You can use leverage both to help offset your losses and also maximize your profits. You can combine its critical characteristics in return to capital which is fast and systematic to give you a good number of benefits while trading CFD.
  8. Hello Danny, Anyone prospecting to deal with CFDs will wonder about the period that will be best for holding a CFD position. In CFDs, you have the advantage of using leverage, which means that you contribute a portion of the funds required, and the broker will lend you the remaining funds with which you will pay interest for each day. Therefore, you need to consider this before holding a long market position carefully. Considering that CFDs lack an expiry date, a trader can hold both long-term and short-term positions in the market provided that they can finance the situation. However, it is good you note that holding a long position will become expensive as time goes by, let us say from four weeks. During this time, you will incur financing charges. Holding CFDs for short term position is, therefore, the best option.
  9. Hello Myles, Both exchange-traded funds and mutual funds continue to experience a considerable amount of growth in the number of investors dealing with them. Of course, as an investor, your main aim is to make profits in such a field. As a new investor, it is most likely that you are not aware of how you can measure how well the fund you invest in traces a benchmark. To measure these differences, you may use a tracking error or a tracking difference. Tracking error is the measure of the deviation of a portfolio's price behavior and benchmark. The measure is done mostly when the ETF creates an unforeseen profit or loss since it did not perform as desired. A tracking error shows the performance of an investment and its stability against a benchmark for a while. It can also be a symbol of a risk level in a fund.
  10. Hello Myles, In a contract for differences, the divergence in the agreement usually takes place by paying cash instead of delivering the physical assets. The returns to your investments may be equal to the value of the underlying asset. This is what attracts most CFD investors. However, this margin trades may not only result in profits, but at times you can make losses. An indicator that though CFDs are an acceptable form of investment, they are also prone to risks. One such chance is the Counterparty risk. A counterpart is a corporation that gives resources in any monetary dealing when vending a CFD, the contract that the CFD contributor issues are the only asset in that dealing. This reveals the trader to other counterparties of the provider. These counterparties may include other clients who conduct business with the provider. The risk associated with this is the counterparty risk. Here, the counterparty declines to meet the financial obligation. Whenever the provider fails to execute the financial obligations, the utility of the essential asset is irrelevant.
  11. Hello Myles, A market order is among the most used type of order in a Forex market. It is a directive by the Forex trader to their broker instructing the broker to effect a trade instantly and at a price that is best at that moment. Once a market order is made, it is called a filled order. As long as the liquidity in the market is enough, a market order is enacted promptly. Investors use a market order when they need to vend at the current market price. A market order has no limit as per the time it will take place; therefore, most traders often choose it since it is easy to conduct trading. Also, a market order often incurs less commission in contrast to other orders. It is essential to note that the prevailing market conditions may affect a market order; therefore, there may be a change in the final price and the price that you had noticed when placing the order.
  12. Josh

    What is market timing in ETF?

    Hello Ryan, The theory behind market timing is always debatable. While some investors strongly believe that its market timing is possible, others believe it is impractical. Market timing is like any other trading technique that an investor can employ. It involves dodging the financial market, depending on how you predict the market will be at a certain time. It may also involve changing the assets that you are dealing with still, depending on how you predict the market will be at a particular time. You may predict the market using various methods. Anyway, every investor has their own opinion on whether market timing is attainable. However, it is undoubtedly hard to know the best time to place your trades in an ETF market. Full-time investors and executive day traders employ economic forecasts and chart analysis to determine the best time to place their trades. Only a few investors have been able to foresee the market movement well.
  13. Hello Ryan, Orders are essential in a Forex market, and any investor needs to understand how they work so that they can know the trading technique to employ. Orders help to maximize the profits as well as protect an investor from the risk of making a loss. A limit order gives a directive to place a trade at a given price or a much better price. A sell limit order states a specific price or higher than that while a limit order to buy states a certain given price or lower. Limit orders give you the chance to be flexible in stating the price you want to trade within the Forex market. However, a limit order does not entitle you to enter or leave your position in a Forex market since if no one meets the price that you state, then what you ordered will not be fulfilled.
  14. Hello Ryan, Trading CFDs and options may look similar. However, there are several disparities among them. A contract for differences is a consensus an agent popularly known as brokers and traders. These parties exchange capital at a certain time, mostly when the trade is opening and closing. In this arrangement, the trader needs not to buy the asset, but he/she can make a profit or a loss; this depends on the asset's market price. An option gives its possessors the chance to purchase am underlying asset at an agreed price on a given date in the future. Though the owners have the right to buy the asset, there is no obligation whatsoever to buy or sell it. CFDs and options are both leveraged tools, and they are also unoriginal. CFDs are usually direct investments in the essential asset. Also, in CFDs, other than the spread and interests, there are no additional costs incurred, which is different in Options. The main difference between options and CFDs is that you pay some extra charge, maybe for a call; this depends on how you prospect the market. If the market price favors you, then you will make a profit if otherwise, you make a loss. In CFDs, you speculate on what the market price will be and depending on that, you can decide to go long (sell) or short (buy).
  15. Hello Ryan, As a new investor, you are always looking forward to making a good profit when you sell your securities. However, you do not consider the fact that the fund in which you are withdrawing cash, you are not depositing an equivalent amount of cash in it. When your pool is undergoing a net outflow of funds, shares need to be sold to obtain money. In-kind redemption in ETF is the basic procedure in which redemptions are produced. When an ETF investor wants to repossess their shares, the dealer will exchange the shares that they want to redeem for a number of securities that the investor has. When ETF fund makes in-kind redemptions, it never sells its securities to get cash. Through this, ETF avoid having taxable gains for non-redeeming stakeholders. ETF also use this mechanism to get rid of capital gains. They also allow non-redeeming partners to their taxable gains.
  16. Hello Ryan, In CFDs, you speculate whether the market price will rise or fall, and from this, you may decide to go long or short on the underlying asset. Either way, you may make a loss. A stop-loss order will help you minimize this risk. Whether you are new in this market or not, it is easy to place a stop-loss order. One key advantage of placing a stop-loss order, especially the guaranteed stop-loss orders (GSLOs), is that this kind of order will occur automatically. You are, therefore, not compelled to stick to your screen to track your market positions. Stop-loss orders will let you check your risks and minimize the possibility of you making huge losses that may occur unexpectedly. They will also enable us to adhere to our trading plan with no worry that we will have to alter the position manually. Stop-loss orders are automatic.
  17. Hello Ryan, Many times Forex investors make profits by buying a stock at a low price and holding it until its price rises when they will now sell it. The profit is the difference in the buying and the selling price of the stock. As a beginner in such a market, probably this is the most usual way you will use to make a profit. You need to understand that you can also make a profit when the price levels are low. In short-selling, you borrow your broker a financial tool and sell it at the present market price, hoping that the future price of it will be lower. When the price if this instrument fall, a trader will buy it on the market and return the borrowed tool to the broker. Here the profit that the trader will make is the difference between the selling price and the buying price. The selling price will be higher than the buying price.
  18. Hello Ryan, Exchange-Traded Funds are easy to possess, which is why they have become popular among the investors. Similar to stocks, ETF involve buying and selling of their units. Any investor must know what constitutes ETF and the risks they will be facing while investing in them. Do be attracted to them simply because you can possess them easily. One major risk of investing in ETF is their liquidity. You can lessen this risk by dealing with ETF, whose liquidity is favorable. Equity Funds are an example of Exchange-traded funds. Most ETF usually follow equity sectors. Fixed-income funds is also an ETF. Financial professionals advocate that you infuse a segment of your portfolio in this fund, such as the bonds or bonds ETF. These bonds reduce your portfolio volatility and also provide another source of income. You can also invest in commodity funds, but before you do so, you need to know why your interest is in commodities. Real Estate Funds and Currency Funds are other Exchange Traded Funds you can deal in. With many different funds you can invest in, it is crucial that you first establish what your portfolio worth is, then depending on those decisions, you choose the ETF that meet your goals.
  19. Hello Ryan, The mining of cryptocurrencies takes place online. This mining is different from that of minerals such as gold and diamond. Gold can be seen and felt while cryptocurrencies such as Bitcoin are invisible and are also referred to as digital currencies. Either way, both of them require energy. It requires approximately the same amount of energy to mine these metals as it is in cryptocurrencies. Mining popular digital currencies such as Bitcoin usually consumes so much energy compared to mining the less popular ones. Real money fulfills purposes such as acting as a storage of value, buying and selling commodities, and acting as a unit of account. Cryptocurrencies also complete some of these purposes. Producing cryptos, however, requires more energy than while producing real money. The people mining the Cryptos use special software and a lot of power to compute what they produce. The energy used to produce the cryptos is usually such extensive thanks to the energy-intensive calculations required to be done by the computers.
  20. Hello Ryan, Financial markets, such as Forex, usually have a spread. A spread is typically the difference in price where the dealer may buy or sell a fundamental asset. A spread is precisely the asking price of a currency pair minus its offer price. A foreign exchange spread may stretch all through the trading day, varying between a high spread and a low spread. Volatility is one factor that may make a spread to run. The more popular currency pairs usually have a lesser spread compared to the emerging ones. These favorite currency pairs usually trade a lot compared to the less popular ones, therefore, leading to lower spreads. A high spread shows that there is a considerable distinction between the asking price and the offer price. A low spread means that the difference between the selling and the offer price is small. Volatility is low when the forex spread is low.
  21. Hello Myles, It is essential that you gain an understanding of the most volatile currency pairs and how you can utilize their price variations. Most of these currency pairs give you an opportunity to gain profit. However, with their high volatility, traders are prone to more risks. Just like the less volatile currency pairs, the more volatile pairs are affected by factors such as the value of the mother country’s exports and imports and, among others, the strength of the economy of the issuing country. The most volatile currency is the Australian dollar in opposition to the Japanese yen (AUD/JPY). The price of the Australian dollar is usually linked to commodities, while the Japanese Yen is the go-to currency when the economy is not doing well. Therefore, there is a varying change in the prices of these currencies depending on how the economy is performing. The New Zealand dollar in opposition to the Japanese Yen (NZD/JPY) is another highly volatile currency pair. NZD’s price depends on the country’s exports of agricultural produce. If the market price of these markets changes, the value of NZD against JPY changes marking this pair volatile. Another volatile pair is the British pound against the euro (GBP/EUR). This currency pair has constantly been volatile.
  22. Hello Kelvin, Forex is definitely prone to volatile conditions. Forex being a 24-hour market, you can trade at any time of the day even on the weekend when the market conditions are volatile. Even though volatile trading currencies may present greater opportunities, you should also adapt to such market situations. One strategy you can use is limiting bias while trading. In volatile conditions, you are not aware of what direction the price is going. You should be willing to trade in any direction in which the price moves. Dedicate more time to find where you will trade and less time to look for entries and placing stop losses. Be ready to take up any new market opportunities that present themselves. Place your trades throughout the important economic news events. Placing your trade before the said event is one way to succeed in trading even when the markets are volatile. You should also look at the market gaps that are there in the market, especially during the weekend, when the market closes and trade these volatilities. Ensure you study the market well and focus on managing your risk. Take up the strategy that suits you best.
  23. Hello Kelvin, Bitcoin is one of the most used cryptocurrency. It is open for usage in most countries across the globe, and many people are investing in it. As usual, before you decide to invest in any cryptocurrency, it is important for you to take time and understand how it works and the risks you are prone to for investing in it. Other than volatility, these digital currencies will always give you a reason why you should not deal with them. While dealing in cryptos, you speculate whether its price will rise or fall. Consequently, this will affect its supply or demand. Your speculation may turn out to be incorrect, and therefore you end up making losses. In any case, you fall for a trap to make any cryptocurrency exchange, and the transaction turns out to be fraud, then you end up losing both the currency and the cash. In such a situation, it will be hard for you to get them back since there are no central systems in most countries that regulate these transactions. Most of these cryptocurrencies have limited use, and most counties do not recognize them as a means of exchange Cryptocurrencies also solely depend on technology, right from mining them to transacting them. Therefore, without digital platforms, these currencies are worth nothing.
  24. Hello Ryan, The difference between cryptocurrencies and stocks is a major topic for discussion. Despite the revolving around exchanges, their trading techniques are usually different. Crypto markets do not operate over a centralized system. They are typically not regulated, unlike the stock markets. One major difference between cryptocurrency trading and stock trading is a proprietorship. Unlike stocks where if you contribute a single unit off, you are at least guaranteed ownership of a part of the company. Cryptocurrency will not guarantee your ownership. It is also much easier to purchase cryptocurrencies than it is to purchase stocks. Though owning a cryptocurrency is much easy, this does not entitle you to legal rights, unlike in stock trading, where you are entitled to legal rights. Another difference comes about in the Howey test. A Howey test will determine whether an asset will be classified as a security or not. A Howey test will determine whether the transaction that takes place will represent an investment contract.
  25. Hello Ryan, Any business or platform that is designated to offer certain services has to be approved. Firms offering a contract for differences are no different. For a CFD firm to be granted such authority, then it must fulfill all the required obligations. A CFD firm should also present all the information called for so that the authority that is approving it can verify that it has all the necessary requirements for it to operate. The registering authority can look at various factors before approving certain CFD firm operations. The authority achieves this by asking relevant questions and answers relating to the CFD firms so that they can gather the information that will help either approve these platforms to operate or deny their requests. Given that products such as CFDs are complex to deal with, some practices need to be observed so that this market operates efficiently.
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