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Everything posted by Brandon

  1. Hello Ryan, Forex scalping involves buying or selling a currency pair and holding it for some time to make a profit. Like any other trading technique, some risks come with scalping. While scalping, you can make a considerable amount of profit within a short time. Consequently, your losses can easily accumulate. You need to know the trading strategies to employ to avoid making losses while scalping. In scalping, you place many trades at the same time. From this, you may make a small loss from each trade you place, this small losses when combined are significant. A forex scalper needs a trading account whose commission fees are less. These trading accounts should also enable them to place orders at the price that they want. These features are however, only available in ECD forex accounts. These trading accounts enable you to select the price you wish to trade with. The chance you will succeed as a Forex Scalper may be nearly impossible if the commission you pay in a trading account is high. The countries that own the currencies used in a Forex market often give changes related to these currencies, therefore, affecting the volatility of these currencies. The prices of these currency pairs fall during this time. It is, therefore, not easy to set a stop-loss order that will help minimize the risk of making a loss. Scalping is not easy, especially if you do not know the market well. Consider knowing the market well before you scalp in a Forex market.
  2. Hi Kelvin, A trailing stop-loss order is a particular type of stop-loss order. It is almost similar to the basic stop-loss order; however, the significant difference with it is that it goes after a certain price as this price is moving in a favorable direction, unlike a stop-loss order that remains at a specific price. As a trailing stop-loss moves in a certain direction, it helps to spot where you can make a profit and therefore acts accordingly. It cages a profit while keeping the trade open until the trailing stop level is reached. The trailing stop-loss order is set at a specific distance from the original point so that when the stop-loss level is reached, a stop-loss order is activated, and the market position is closed. A trailing stop-loss follows a favorable direction. If this direction changes and the market starts moving in an unfavorable direction, the trailing stop loss will reverse. In a trailing stop-loss, once you reach the stop-loss price, your trade will close; hence, you avoid making a loss.
  3. Brandon

    What are altcoins?

    Hi Ryan, Altcoins are other cryptocurrencies that came up after Bitcoin was successful. By 2020 there were over 5000 altcoins. They are termed as a better and an alternative option to Bitcoins. When Bitcoin became successful as a peer-to-peer digital currency, it leads to the invention of the other cryptocurrencies. An altcoin needs to be better in many ways so that it can have better popularity and broader usage than Bitcoin. Most altcoins mimic how Bitcoin operates. The costs of transacting with the altcoins are usually smaller and efficient compared to Bitcoin. Altcoins came up in various categories, such as stablecoins, mining-based cryptos, security, and utility tokens. Mining-based cryptocurrencies generate coins by tackling challenging problems related to the unlock blocks. An example of an altcoin is Ethereum. These cryptocurrencies are more like Bitcoins as against other altcoins. Security tokens mimic traditional stocks. You can get some dividend payments for owning security tokens. Utility tokens are sold as an initial coin offering (ICO). Filecoin is an example of a utility token. Stablecoins mainly aim at being less volatile than Bitcoin. The coins' value is, therefore, tied to existing currencies. Libra is the most popularly known altcoin.
  4. Hello Kelvin, Keeping your crypto safe as an investor is usually your responsibility. It is, therefore, essential for you to learn how to keep them safe before you start investing in them. This is generally different from the standard currencies since the government and other institutions are responsible for protecting them. One way you can protect your crypto is by using two-factor authentication (2FA). 2FA plays a crucial role in protecting your crypto wallet. You are required to record two identification layers so that you can access your account. In case a hacker gets one of your passwords, they will still be required to provide another one so that they can access your account. It would help if you also considered using other types of wallets, such as the hardware wallet to store your cryptocurrency. Most cryptocurrency investors use online and mobile wallets to store their cryptocurrencies. These wallets are prone to cybercrimes. Hardware wallets are a good option since you can access your funds even when you are offline and highly protected. It would help if you also comprehended the differences between cold and hot wallets. These wallets will give you different security levels. Cold wallets offer you better security since they are not connected to the internet. On the other hand, hot wallets are connected to the internet, and therefore, they are more prone to hackers. You can also use a strong password to protect your cryptocurrencies. It would be best if you didn't share your password with anyone and also avoid using the same password for different logins. Allowing only the permitted devices to access your wallet is another way you can strengthen your crypto wallet security. Cryptocurrencies are decentralized, and therefore you owe yourself your security.
  5. Hi Kelvin, Both CFD and warrants get their value from an underlying asset without necessarily owning it. However, in CFD, you may have the option of buying the asset, unlike in CFD, where you can not possess it. Same as ordinary shares warrant trade in the London stock exchange. This is also similar to the listed CFD. In the London stock exchange, you have the opportunity to follow up on the market prices. While trading in either CFD or covered warrants, you aim to profit from the underlying asset. The contract for difference is an agreement to reimburse or get the difference in the opening and the closing price of an underlying asset. In covered warrants, if you speculate that the value of an essential asset will rise, you purchase a call warrant. On the contrary, if you suppose that its price will fall, you buy a put warrant. The prices of a warranty vary since the market makers issue them. A warrant guarantees you the right to trade the underlying asset at a given value before it expires. However, this usually is not an obligation to buy or sell the asset. In covered warrants, if a trade goes against you, you will pay a premium. In CFD, however, if the market moves against you, you will lose your money. If a trade favors you, you will make a profit instantly, and therefore you need not pay for premium. In CFD, the chances of losing more than what you invested are high anytime the market fails to favor you. In covered warrants, however, the premiums you pay limit the losses that you may incur. You can also make a considerable amount of profits for small price changes in covered warrants.
  6. Hello Ryan, Both exchange-traded funds and futures offer the investors with several instruments that they can trade. These two financial instruments have many similarities. However, there are major vital differences that separate them. Futures is an agreement to trade a certain commodity at a given price and a certain future date. Exchange-traded funds, on the other hand, is an investment instrument that trades like stocks. ETF are several securities that track a fundamental index. You sell ETF through brokers on an exchange market. Both futures and ETF are excellent methods of investing; however, their differences should make you select one that you think is best. In exchange-traded funds, you have to pay management fees, unlike futures where you do not incur such costs. According to how long they trade, exchange-traded funds cannot be sold all through the trading day. In futures, however, you can trade for 24 hours each day for six days. Some ETF typically have a considerable amount of tracking error, unlike futures where the tracking errors are small. Futures are more capital efficient compared to Exchange-traded funds. In terms of tax efficiency, the taxes you pay in futures are usually far less than those in ETF. From this comparison, futures seem to be a better investment option relative to exchange-traded funds.
  7. Hello Kelvin, Many exchange-traded funds use options in their trading. There are varied ways in which you can utilize options so that you can profit. ETF options are good instruments for investing, and they help to diversify your trading portfolio. Selling a call option is one way you can make use of a choice in ETF. While selling a call option, you desire that the price if the ETF will fall. Selling an option is a better trading tactic that purchasing one. When you sell an option, the selling price is the maximum profit you will get. The risk you will also get when selling an option is unlimited. This is different when you buy an option since the payoff you get is infinite, and the maximum risk you will get is from the buying price. Another way you can make use of the ETF option is by buying a call option. Before a call expires, you can purchase the underlying ETF at a specific price. The price of a call option differs depending on the prevailing market price of the ETF. Therefore, you decide whether you want to shield or reveal yourself to the upside by buying the call. You can also purchase a put option when you want to either expose or protect the downside of an ETF. Buying a put option is a safe thing if you aim to protect the risk that may come with an ETF declining in value. Typically, a put option allows you to sell an ETF at a given price. Selling a put option is another way you can utilize an ETF option. Selling a put option allows the purchaser to sell an ETF at a specific price before the ETF expires.
  8. Hello Myles, Cryptocurrencies have recently become popular among many people. And a good number of countries have been adopting the use of cryptocurrencies. These digital currencies can either be used as a form of investment or even purchase products online. Bitcoin, for example, has been attracting many investors due to its varying price, which has recently been on the verge of recovering; this has not only made investors invest in it but also has the urge to mine their Bitcoins. Coming up with a cryptocurrency is not as simple as just printing coins and note as it is usually like for other fiat currencies. The way to come up with these digital currencies is by mining them. When you buy or sell a cryptocurrency, a blockchain will record this transaction. A blockchain is a public ledger whose aim is to keep up with cryptocurrency activities and report any transaction. The users of this network, however, need to verify these transactions so that they are valid. The mining of cryptocurrencies involves issuing the network users with the coins for verifying these transactions. A node, which is usually the miner, typically gathers the transactions that are taking place and sorts them out into blocks. Any time a transaction is made, the network nodes will receive the transactions and check if they are valid. The minor nodes will then assemble the transactions and assemble them into a candidate block. The mining process introduces new coins among the existing ones; this is one essential element that allows cryptocurrencies to operate without a third party.
  9. Hello Ryan, The cryptocurrency market has become popular recently. The number of people who are dealing with this digital money has been increasing, and some states allow its citizens to use it. It is hard to buy a cryptocurrency such as Bitcoin; however, when you decide to sell your digital currency then, it ought not to be that hard. Before you sell your cryptocurrency, you need to examine certain things such as the finances you have, the reason you purchased that crypto, and the tax repercussions you will face. The Crypto market is different from the stock market since you can sell your crypto at any time. This market never closes. Before you sell, check whether you have achieved the goal you had set. Sell the crypto at a price higher than when you were buying it so that you can make a good profit. You can also sell the crypto when you feel that you can make more money trading somewhere else. Of course, the main reason people trade is to get profit, and if dealing with cryptos is not profiting you, then why not sell it? Be vigilant on the market prices of the digital currency you are dealing with. If according to the market trends, the cost of the cryptocurrency is falling more often, you should sell it; this will save you from making significant losses from this investment. If you decide to sell that cryptocurrency, make sure you check on all factors that will push you to do it.
  10. Hello Kelvin, Cryptocurrencies, also known as digital currencies, have increasingly grown in demand over the past few years. These currencies can not only be used to purchase goods and services but also to invest. These currencies are decentralized, and therefore neither the government nor the banks influence them. Cryptocurrencies are more or less like other traditional currencies. There is a need to determine their value, and there are various reasons that may result in rising or falling of value of these currencies. Determining the node count of a cryptocurrency is an excellent way to show you the value of this currency. Node count typically involves measuring the number of active wallets that exist on the network. You can also check the entire market capitalization and compare these two factors with those of other currencies. The rising demand of the cryptocurrency also determines its value. The higher the order, the higher the value of the digital currency. Also, the production price of a cryptocurrency will determine its value. Bitcoin, for example, incurs a lot of costs while producing it, and consequently, its value is also high. If many people in a state adopt a certain cryptocurrency, then there is a high possibility that the government will regulate it. As a result, its price may rise. Any investor needs to note that the value of cryptocurrency may change with time. Therefore, they should analyze the market well and understand the risks they are prone to while engaging in a certain cryptocurrency.
  11. Hello Myles, A contract for differences is an excellent way to profit by trading in stocks in this market. In CFD, you make use of leverage, whereby you only contribute just a fraction of the amount required. Short-term trading in CFD is the most efficient way for you to make more gains. Here, you only hold trades for a short time, maybe a few hours or a couple of days. You should place your focus on only a few markets to succeed in trading for a short period. You also need to understand the price movements if these markets. Immediately you spot a certain market trend; then, you need to trade using this trend up until it shows slowing down signs. Also, you can place many trades at a particular trading session. The focus of this is to take off profits that are small for that small price. Day trading is another technique that you can employ. It will require you to sell off the position you have in the market before the trading closes.
  12. Hello Ryan, A contract for differences has become a widely known form of investing too many upcoming investors. It is a platform that enables a trader to make gains by speculating whether the cost of a fundamental asset will rise or fall without necessarily owning that asset. Price changes are what is essential in this market. Just like any other market, a CFD market is usually affected by various market conditions. Since you are gambling on whether the market prices of capital such as shares will rise or fall, then it is more than probable that you will be affected by much weighty market conditions. Any small underperformance in the CFD market will result in losses since CFD are usually affected by leverage. More so, if you are trading CFD at a time when the future outlook of the economy is unpredictable, then this trade is risky and may result in significant losses. It is usually impossible for even expert traders in this market, to predict the price movements no matter how stable the market may be looking.
  13. Hello Kelvin, One major difference between CFD trading and share trading is that in CFD, you gamble on whether the market price will rise or fall and therefore decide on whether you will buy or sell an underlying asset. Here, however, you do not own the underlying asset. While trading shares, however, you own the underlying asset. In CFD, you make use of leverage; this means that you will only contribute only a part of the whole amount for the trade known as the margin so that you can get exhaustive market exposure. While trading shares, however, you will suffer the whole amount for you to get full market exposure; this will be great for you since you hardly lose more than what you infuse. CFD is more suitable for short term trading. Share trading, on the other hand, is most suited for long-term purposes. In CFD, also you have to pay the price for you to keep your position in the market, which is not the case in share trading.
  14. Hello Myles, Volatility determines how often a currency's value will change. A coin may be highly volatile or less volatile, depending on the extent to which its price will drift from the standard value. When a currency is more volatile, then the risk of trading with it is also high. This means that its price will also rise, therefore attracting more investors. It is hard to know whether a currency is volatile since, by nature, volatility is usually uncertain. Volatility may be either implied or historical volatility. Historical volatility is one that has already occurred, while implied volatility is an estimation of a traders' future expectations depending on the future price. You need to understand currency volatility to decide which currencies to trade and how you will trade them. Volatility will help you determine which currency pairs to trade with.
  15. Hello Ryan, Percentage in point (pip), otherwise known as price interest point, is the slightest arithmetical price move in the foreign exchange market. That change in price during an exchange is what is known as a pip. Generally, pip usually the fourth decimal point of a quoted price. For example, in $0.0001, the pip here is one since it is in the fourth decimal place of the stated amount. While determining the value of a pip, you need to note that its price will depend on the currency pairs you are trading. It will also depend on the currency you will be using as your base and counter currencies. By determining the value of pip Forex traders can tell how the equity in their trading account will vary depending on how the market currency moves. Each currency is usually attached to a particular market value. Therefore it is essential to determine the worth which a pip holds for every one currency pair.
  16. Hello Kelvin, When looking for good trade opportunities, then it is crucial to check on market volatility. Volatility helps to determine the price changes over a particular time. One way you can use to check on the market volatility is the moving averages. Although this is a simple way to check on the volatility, it usually provides inaccurate data. Moving averages typically measures the par market movement for a specified period. You can also use the Average True Indicator(ATR) to measure volatility. This method can be used to measure the difference between two given points, no matter the direction of these points. Bollinger Bands is another indicator that can be used to measure volatility. These bands are generally two lines drawn one above and below in a moving average for a given amount of time. These bands are vital, and they will involuntarily contract with low volatility and expand when there is high volatility.
  17. Hello Kelvin, A tracking error checks the difference between the actual performance of a fund and that of the index. The difference in the returns most times varies mostly due to differences in the management fees. One other reason why an ETFs returns may be different from that of its index is currency hedging. When a currency is at risk, the ones controlling it may obstruct it using a futures contract. If there is a massive change in the currency movement during the contract, this can show as a tracking error. Keeping additional cash available so that you can pay stockholders who repossess their units may also result in tracking error. A poor sampling of the stocks which need to be held in the funds may also lead to substantial tracking errors. Such may occur when, for example, you decide to hold just a fraction of the stocks in the Exchange-traded funds. Securities lending may also result in tracking errors. Several index funds lend securities such as stocks so that they can get an additional income. It is usually not a bad idea; however, the index funds need to ensure that the tracking error is less than the management fee.
  18. Hello Kelvin, As an investor, you have so many fields that you can invest in. More often, you will have more than one choice, out of which you have to select the best option. The profit you will get while dealing in CFD will be higher than that of options. As the market price rises, CFD trade is likely to make a good profit since the profit comes from its change in value. Options are only profitable when the amount of the underlying asset increases more than its premium. Options are more flexible than CFD. In CFD, your profit depends on the direction of the prices. In option, you can alter your state until you make a profit. CFD are easy to understand and trade, unlike options whose trading strategies and their pricing are complex. CFD access many financial instruments that you can trade with, which means that the opportunities for you to sell are many, which is usually not the case in options. The value of CFD is usually direct to that of the underlying shares; thus, their prices have a close relationship with the essential assets. One major difference between these two that makes the CFD a better option is that you can easily understand what you are trading. Options are known to be more challenging to understand. One main problem of using options is that you cannot hold them as long as you can. They have expiration dates. A good trade may prove an option worthless because it may expire. Since options are involved both in their prices and understanding, then this is a drawback to trading them. And since CFD imitate the stocks which they follow, the information needed to deal with them is little. Choose the one that suits you best.
  19. Hello Kelvin, By placing a market order, you inform your broker to trade at the prevailing market price. One advantage of placing a market order is that you have the assurance that this order will take place as long as there is a market-ready vendor. In a Forex market, you get to see the trades that are taking place, and therefore you can enter the market quickly and inform the broker to place exchange for you. When placing a market order, you pay the stated rate at the time, and there are times when the stock may vary. Remember, this is a highly volatile market. If the prices go up instantly, the potential traders may fail to take up the trade. The prices at the time of placing the trade may be different from the final price due to the high volatility in this market.
  20. Hello Myles, Exchange-traded funds are still growing to be an excellent form of investment. However, due to natural selection, some of these funds can be done away from the market. An ETF can liquidate maybe due to lack of interest in them, when they are not performing well or due to any other reason. When ETF closes, the ETF contributor makes a statement on when the ETF will cease trading. The provider will also state when the funds will be terminated. The communication normally lasts for roughly 30 days. Investors, therefore, have sufficient time to look for an alternative form of investment and adjust their trading tactics. Although the ETF will continue to trade normally from the time the announcement is made to when it will liquidate, its trading price and volume are likely to be affected. This time is mostly given so that the investors can sell their current positions, gauge their risks, and find safeguard other trading chances until this time expires. Once this period comes to an end, the ETF will take some time before it undergoes the liquidation procedure. The investor whose funds are being liquidated will get an amount comparable to the value of the asset the moment the liquidation is taking place. Before the actual implementation and the last bell, there is usually a lapse. Therefore, there could be some differences in price. Meaning that the prices of the bond in your fund may rise or fall during this time gap. Be keen on your funds so that immediately such an announcement is made, you have enough time to alter your trading strategies and know which other investment options you will take.
  21. Hello Kelvin, Exchange-traded funds are close counterparts to exchange-traded notes. However, these two have some major differences between them. Investors should, therefore, study both of them critically and understand their pros and cons before deciding on what they will invest. Exchange-traded funds are a market-linked investment that is provided as a senior note or debt. ETF, on the other hand, portrays interest in a fundamental asset. ETN are usually not secured, which is why they perform just like bonds. ETF investments are taken into a fund that carries the properties it traces just as it does with stocks and bonds. ETN has credit risk, while ETF, on the other hand, roughly lacks credit risk. However, ETF posses tracking risk, which means that the returns of ETFsand its underlying asset will probably differ. In terms of tax treatment, ETN pursues its essential indexes less their annual expense. Different from ETF, ETNs do not track errors. Stockholders should view ETN as liquidated agreement. Therefore the differences in buying and selling should be taken as capital gains. ETN result from long-term capital gains and should, therefore, have a more favorable tax treatment in contrast to ETF that result from short-term capital gains.
  22. Hello Myles, A stop-loss order acts as an insurance policy, and they help to control risks that may occur when you place a certain trading technique. It is typically an uncertain order that starts to operate after the price of a particular asset progresses to a given extent. When you decide to go long in CFD trading, your aim is to benefit from a price increase. In such a situation, what triggers a stop loss is a fall in price. In case you decide to go short so that you can benefit from a fall in price, which may activate a stop loss is an increase in price. If a certain trade obstructs you, a stop-loss order will stop you from losing your profits all at once. Always remember that a stop-loss order depends on the offer and the selling prices of the underlying asset.
  23. Hello Kelvin, Just like any other financial trading, while dealing with CFD, you have the risk of making losses. A trader can use a stop-loss order to limit the losses they may make while trading. When you decide to go long or short in CFD trading, there is a possibility that the market may move against you. You can, therefore, place a stop loss that will determine the degree in which you are ready to let the loss either increase or decrease. Placing a stop loss in CFD trading is untroublesome. What mostly matters here is the place where you set it up. Before you place it, however, you need to know how to calculate it. Depending on how you have well, you have studied the market, always place a stop loss at an insightful level. You may decide to close a trade when you speculate that you are going to make a loss. You may do this without taking into consideration the plan you had set up for your trade, mostly due to fear of making a loss. It is, therefore, essential that you place an involuntary stop loss for your trade. A stop-loss will ensure that we follow our trading plan. To know a stop loss while trading, you may look for things to assist you. This is an indication that our trading scheme is not going as per our plan; therefore, it is invalid. You should, therefore, spot the close price levels when the market moves against you so that you can establish your stop loss. Typically when determining a stop loss, you will be looking for the extent in which you want the market to come back to normal and the maximum loss you are willing to make.
  24. Hello Kelvin, Choosing a good broker in a Forex market is essential. Forex brokers will not only give you a good platform for you to place your trades, but they will also guide you in the course of your trading. The knowledge of how Forex brokers make money will help you choose the right one for you. While dealing with any broker, you pay so many charges; this money is what the brokers use to make their money. The brokerage fee is the main source of income for brokers. Brokerage fees may include commissions or the spread between the offer and the asking price. Brokers mainly make money by possessing the spread charging a certain fee per turn. Some even charge for both. Some brokers also earn by charging their clients for services they offer, such as educating them on how and when to place their trades. Forex brokers also make money from trading platforms. The trading platforms may come with additional features that may help you make more profits. Forex traders will get money from these additional features by charging extra fees. Other additional services such as which you may decide to pay for. These services may include getting more tradable tools, trading signals, and getting in-depth information about the market.
  25. Hello Myles, Before you start dealing with Forex, you already know that you have to involve brokers. And before you go for any broker, you need to know the different types of Forex brokers that exist. The two leading types of Forex brokers are the Dealing Desks (DD) and the No Dealing Desks (NDD). A Dealing Desk broker, also known as a market maker, normally make money from spreads. They also provide liquidity to clients. Dealing Desk brokers create a market for their customers. They fulfill both the buying and selling orders of their clients. The no dealing desk brokers, on the other hand, do not support the trades of their clients since they join two groups together. NDDs may charge a small fee for trading. They may also place a markup by moderately increasing the spread. The No Dealing Desk brokers may further be classified into; Straight Through Processing (STP) and Electronic Communication Network + Straight Through Processing (ECN+STP).
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