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Everything posted by Bazinga

  1. Before you start placing your trades in the stock market, you need to resolve how actively involved you want to be in the market. When can I be available for trading? What objectives do I want to achieve? These are examples of questions you need to cudgel your brains with before you settle for any trading technique. Once you figure out this, you will know the best trading style for you. The two main trading styles you can use in the stock market are the swing and day trading. There are vital variations in these two trading techniques that you want to look at before selecting the one that suits your expertise and personality. However, like all other trading techniques, a similar concept in these trading styles is that they all aim at making profits, and significant earnings for this matter. In day trading, you will place many trades throughout the trading day and for each day of the trading week. The profit you will make will come from the differences in price. You can hold any market position depending on how you will study the technical analysis tool. It will be your guiding tool on the entrance or exit of a market position. As a day trader, you will trade securities, and you are not required to hold a position overnight. If you decide to conduct swing trading, you will buy and hold securities for quite some time, usually between two days to several weeks. In swing trading, your trade may take a good while to yield to you the fruits you want and, therefore, the need to hold a market position for some time. Day trading is like a full-time job where you look to make a profit at the end of each trading day. The case is different in swing trading. In swing trading, you only need a small amount of capital to start trading, unlike day trading, where you introduce money each day you decide to trade. The best trading technique to use will depend on your trading style. As long as you are able to meet your goals and you are able to comfortably place trades, then go for that technique that helps you to do so.
  2. Bazinga

    What are Penny Stocks?

    A small public company may have that ordinary share that they trade at a low price. It is what is known as a penny stock. How you define a penny stock in one country will be different in another state depending on the lowest prices that the shares in that country will be traded. However, in most countries, for a stock to be termed as a penny stock, it is exchanged for less than 1 Euro. Typically, the market cap of a penny stock is usually below $250 or $300 million. Such a penny stock a microcap stock. Most penny stocks will trade over-the-counter while others trade on big exchange platforms like the NASDAQ and the NYSE. The Securities and Exchange Commission describes a penny stock in its way. It describes a penny stock as a share from a small public company that trades below $5. If a private company has these shares and has no active market, then such is included here. These shares are also sold over-the-counter and are so illiquid. Also, the pricing of stocks is a challenge since it is hard to obtain the estimated price. Before you invest in a penny stock, you need to keenly study about it and be careful while investing in it. A good reason for considering it is because it is highly volatile and has low liquidity. Also, penny stocks are prone to fraudulent activities such as pump and dump techniques where the stock promoters tamper with the prices. Penny stocks trade over-the-counter; therefore, they have low liquidity. The inferior liquidity may make you not trade the penny stock at the needed time and can also lead to low trading volumes. Therefore, you can carry out a small transaction that will produce large price swings. Penny stocks are mostly found in small companies that have inadequate historical information. Such companies do not have accurate records of things such as the operations, assets, and revenues; hence it can be dangerous for you to invest in such a company. You may also lack enough resources to make you invest in the small companies that deal with penny stocks. This is because such companies need not compile their reports with a regulatory body, and also other professional analysts do not cover the penny stocks. Many other drawbacks come with the penny stock, and you need to think once again before investing in them. However, penny stocks are an excellent investment tool.
  3. Hi Elvis, The amount of leverage should be considerate of your capital and preferences. Leverage is referred t as the borrowing of funds, which is used by traders to invest in their business transactions. Some people argue that the best leverage for you is 1:100 to 1:200 This implies that with $500 in your account you can control assets worth $50000 Choosing the best leverage is based on your capital and your plan. If you go for high leverage, you will be able to control a lot of assets, but the risk of your money is also high. If you opt for a lower hold, your capital will be safer, but you will not be able to control a lot of assets. That is if a trades go against you. So the basis of choosing leverage should be based on the risk of your capital. Some say that the best leverage should not pose more than a 3% loss on your investment capital. If a leverage goes to 20% on your money, it should be reduced by these measures. Going for the lowest risk possible will keep you longer in the trade market. If you are a beginner and don't have a lot of experience trading or you are conservative of your capital, it would be best for you if you went for lower leverage let's say like 1:5 to 1:10 You will be exposed to little risk rates as compared to high leverages. You can also deploy trailing and limit stops. These stops will help you reduce the number of losses if a trade goes wrong. Humans are subject to developing emotions, and if you let them get the best of you when trading, you could be heading towards failure. That is why you need to limit yourself is in case a trade goes wrong; you will not keep adding on it in an attempt to save it. Leverage is beneficial since it gives traders more power to invest in the forex market. The strategy you are using when trading should also be considered when choosing leverage. If you are a scalper, you can go for moderately high leverage, which you are comfortable with because you are trading while holding trades for short intervals, so the exposure to risk is not that high. You are also not exposed to overnight risk when changes go against you while you are not aware. This also applies if you are using day trades because trades are closed before the day's ends, and a deal is a short term. If you are using a long term strategy, it would be best of you if you took up smaller leverage since the exposure to risk is very high. Your trades take long periods and are exposed to overnight risk. Taking high leverage while scalping gives you the power to invest more, and since your sole purpose is to make small amounts of profits frequently by quickly entering and exiting trades, there will be a lot of capital. CFDs give investor leverage, which helps them get more capital for trading. Choosing the best leverage cannot be the same for all trades. Initially, companies used leverage most, but now even retail traders can. Your capital should not be exposed to a high-risk rate by choice of leverage. Always go that which gives you the lowest risk rate. You should ensure that a single trade does not take up more than 3% of your capital. It will help you reduce the losses in case things do not work out as you expected. New traders should remain conservative until they learn the fundamentals and gain experience.
  4. Hi Stella, As we progress with our normal lives, it is evident that we make mistakes. Making mistakes is not a crime, but failing to avoid these mistakes is. When forex trading, there are several mistakes traders make, which at times end up leaving you frustrated. Beginners with little knowledge about trading mostly find themselves in a tight spot because of errors that could have been avoided. It is best for you if you familiarize yourself with the mistakes which traders do and figure out how you can prevent them. Lack of a plan. When doing anything in life, all of us usually come up with a plan. Failing to plan is planning to fail. Before you start trading, do some research an analyze your data to come up with a well detailed and eligible plan. Your plan should have in it the strategy you will use when trading, how you will get capital, and the software you will likely use when trading. Any business or investment requires a well laid out plan to succeed; you cannot just wake up and start selling. Lack of Stop loss Even if you are sure that you will 100% gain profits, it is always advisable to set a stop loss. The forex market is highly volatile, and even the smallest new can cause drastic changes in the market prices. You can never know when this can happen, and therefore you should always have a stop loss to ensure that you do not suffer when things suddenly go haywire. Adding on to a losing trade When traders see that a trade position is going to be lost, they tend to add more funds to it so that it does not work in a loss. This practice is not healthy since you can end up making decisions hastily since you are under panic. Your judgment is overcrowded at the moment, and you end up making chaotic decisions, which will inevitably lead to even more significant losses. Always stick to your initial choice and if a trade leads to an injury, study the cause so that you can learn from your mistakes. By doing so, you will have saved yourself the stress and shock after realizing that you have been adding on an unprofitable trade, which has, in the end, made you lose a lot of money. Life promises better outcomes if we learn from our mistakes. Lack of risk management Traders who only think of profits and don't set up risk management protocols can end up losing everything. Do not allow yourself to feel only of benefits and lack a plan for risk management. Always stick to the rule of 1% risk in each trade. If you manage to reduce potential risks, you can stay in the game for longer and make more profit from forex trading. Greediness Trading newbies have a cultivated culture that they can at least earn 20% profit within one year of trading. This, however, is a fairy tale. Setting unrealistic goals will see you fail all the time. You should hold your nerve while trading and bite that which you can chew comfortably. For you to realize this kind of profit, you must be an exceptional trader with years of experience in a trading education background. Not paying attention to the latest news This is what is destroying people when they are trading. Always read the latest news release so that you do not make decisions which have been overruled without your knowledge. Keeping yourself updated will allow you to make correct trading decisions, and you will be taking a step closer to successful trading. To wrap things up, traders should equip themselves with a plan before trading. Try doing a demo before the actual trading. Issues of risk management and setting stop-loss parameters should also be adhered to. Avoiding these mistakes ensures that you make money stress free and efficient.
  5. Hi Earnest, Manual trading at times can be tiresome especially if you are not used to it. Beginners without proper guidance can find themselves making loses over and over. You also want to spend less time on your phone or computer and at the same time make some profit. Manual trading requires you to have a detailed report on the market situation. You can just start trading without a clue of how the prices are shifting. This all has been simplified when trading software came in existence. Some of these programs have the ability to open and close quotes automatically. They are much more efficient than manual trading since you only need to run the software and it will do the rest for you. If you are a beginner and you have little knowledge about trading, you can install a software on your phone or computer and start making money. This software is also for the pros who are looking for advanced tools to assist them in in trading. Your success is however not fully dependent on the software but requires effort from both sides. As a result, the rises the need to get the best forex trading software if you want to get the best out of this field. A top-notch software should be able to accommodate both beginners and pro traders. It should have simplicity to cater for the needs of beginners and also advanced options for the pros. You should go for a software that gives you live data, custom indicators, flexible and comprehensive charts and not forgetting fast response or as traders prefer calling it rapid fire. Plus500 is the top most rated forex trading software which many traders choose to go for. The platform was launched in 2008 and has progressively upgraded since it is now available for android and iOS devices, not forgetting the desktop version. It can also be accessed via web. The features it offers makes it standout rom other platforms. The platform is considerate of beginners since it offers simple and flexible charts including charting tool. Charts are the graphical representations of prices in the current time and the past. If you are not used to forex trading, this software is user friendly and will assist you get a tighter grip of the trading field. For those who love doing stuff fast without delays, this software is here to cater for your needs. As a trader you want to make money as fast as possible. Plus500 offer one-click trading which allows you to place orders fast. You will not find yourself waiting ages on your screen to complete transactions. Plus500 has an inbuilt back testing and optimization feature which allow you to test your plan against past price movements by simply keying in the opening and closing trades of the subject period. Apart from the factory indicators, you can be code your own custom indicators for better analysis and trading. Of all the well-known platforms, Plus500 offer the lowest spread-out ensuring that you get maximum outcome from your investments. As for leverage, Plus500 gives its traders 1:300 which implies that you can hold assets worth $30000 for just $100 Plus500 additionally gives traders protection against negative balance where in the occasion that a currency pair falls, all transactions are closed and your money is saved. You don’t have to worry about making loses with an automated forex software when the market is at its lowest. Lastly, Plus500 has a demo account which you can use for practice before going to real trading. This will be a relief to beginners who don’t have a clue of what they are getting themselves in. It is secured by SSL and you will be receiving push notifications about the market. If you are looking for a software that can help you whether you are a beginner, you should go for Plus500 sine it is use friendly and has several advanced options and tools for the pros.
  6. Hello Stella, In our lives, we are required to have strategies that we deploy to succeed—the same works for forex trading. You cannot just start trading without a plan; otherwise, you will end up doing zero work. There are several trading strategies which all work for different people depending on your needs. An approach can work for you correctly and, at the same time, destroy a different person. All you need to do is research and analyze all the strategies and come up with the ideal method to deploy. Methods of trading vary depending on the duration which you hold trades, all of them have their pros and cons. Examples of ways you can use when trading is swing trading, scalping, day trading, position trading, and trend trading strategy. Swing trading is one of the most used methods, which is a medium-term trading strategy where traders gain profits from short-term price patterns. A trader is required to refresh the bars every one or two hours. The main activity here is keeping a close eye on the top and bottoms of bars and choosing to enter or exit long or short term positions. You will need to use oscillators and indicators to pick out optimal entry and exit times and positions. Pros  Profitable  Adequate trading opportunities  You don’t have to leave you fulltime occupation Cons  You cannot handle significant trends  You are prone to overnight risk if currency pairs go down  Require strong technical analysis Day trading is another strategy you can use for forex trading. Under this method, traders make trades are usually closed before the end of the day. This means that you can create multiple trades in one day, but the deals will close before the day ends. The recommended time frame for this method is 5 to 15 minutes. This method is suitable for those who rarely trade at night since you will not have to worry about being affected by big moves overnight. Pros  No overnight risk  Reduced opportunity cost Cons  Most of your daytime will be used up  A lot of technical analysis is required. Scalping strategy involves concise term trade held for a few minutes. This method is aimed at making small profits at regular intervals, which is achieved by opening and closing multiple trade positions in a day. This method, however, is not suitable for the retail trader because it entails a lot of transaction fees, which will end up eating up your profits. So if you are a beginner and you have limited funds, refrain from using this method. Pros  You can make a healthy income  Has most trading opportunities compared to all other strategies Cons  You will have to spend a lot of time on your screen I a day  The endeavor is highly stressful. Position trading. This is a long term method where traders hold trades for weeks or even months. You primarily rely on fundamental analysis, but you can use technical analysis as a tertiary option. This method does not allow you to open and close multiple trading positions since it is a long term engagement. Pros  Less time investment  Favorable risk reward  Less stressful since you will not be trading regularly Cons  Requires you to have a lot of knowledge on the fundamentals driving the market  Few trading opportunities  Substantial capital investment is required Choosing the best strategy is fundamental if you want to have a successful trading endeavor. A person can use an approach, and it proves to be helpful but end up messing up another person. It would be best if you familiarized yourself with all the strategies so that you can weight them all ad choose the best for you.
  7. Bazinga

    Can I use scalping in CFD?

    Hi Njau, When you are planning your entry to the word of forex exchange, you always have to choose the best strategy that will help you get profits. In the process, you must have come across scalping. Many questions pop up in your mind, one of them being the issue of using scalping when the trading contract for difference. CFD have been on the limelight for the enormous profits they bring to traders and do not require a lot of capital. Experts say that using scalping while trading CFD is one of the best strategies since their features sync easily. A scalper aims at making small profits at frequent intervals in one trading day. This makes it the best approach since you are not prone to overnight risk. A scalper can benefit from CFD because of the leverage it offers. You will be able to hold small trades with a large amount of investment. While scalping, you hold trades for very a very short frame time, so you are not exposed to the risk involved with drastic changes in the prices over time. You can enter and exit trade very quickly when it is convenient for you. If you are a trader who is looking for fun and action, scalping should be your buddy. Scalping is all about leverage, and who offers the best leverage? That's right, CFD. Since scalping has very few risks, you will not have to worry about making losses from borrowed money. Some people say that scalping is the best for CFD due to its flexibility and low financial costs. However, this strategy is not suitable for beginners since it requires high levels of technical analysis to come up with top-notch risk management plans. A scalper ultimately looks at making small profits by holding short trades with a large amount of investment. So you have to come up with the best risk management plans so that you can minimize your losses and enter and exit trades as quickly as possible. So if you do not have a high-speed internet connection, you might want to consider using other strategies. It will help if you remain vigilant, always keep a close eye on the latest news. By doing so, you can easily anticipate that the latest release is going to affect the market, and that is what a scalper is looking for—a slight movement which can benefit you in a short period. A shift in the chart can favor you and can as much destroy you. That is why you need to minimize your risks. Trading gurus always aim at reducing risk to lower than 1% per trade. It is also advisable to always stick to your plan. If you intended to hold trades for 1 minute, do not extend the time frame. Also, do not add on to unprofitable business. Close it an analyze what went wrong so that you cannot make the same mistake. Trading CFD using scalping requires you to be patient and disciplined. If your actions are not adequately analyzed and backed with reliable data, you will end up making losses. Nevertheless, if you do it right, you will be guaranteed of spontaneous profits from every trade you make. Scalping id proper since most trading platforms virtually run throughout the day. So you can trade at your convenience. Scalping gives you freedom of choice; it is entirely your decision to start selling. It is worth noting that not all scalpers are frequent high traders. However, all high-frequency traders are scalpers. For you to be a scalper, you merely need to trade once in a trading day. This is one of the pros of scalping CFD, and you can trade any amount you want.
  8. Hi Stella, The cryptocurrency industry has been full of surprises where investors have been able to generate a lot of profit and also losses, especially where there was fraud or scamming. You may be a potential developer, a startup founder, or an investor who is looking forward to investing in a new project which has uncertainties or is not yet tested. Regardless of all these positions, you are required to accurately determine if a coin offering has all that it takes to be successful. When choosing an ICO, your choice should have vast scale potential. There are a lot of ICOs emerging in the market, and due to this, competition is becoming stiff. A good ICO should be able to adapt and keep up with the game. An ICO should be able to attract investors. A large number of investors are young miners who have made millions with bitcoins an are in search of better block-chain opportunities and are not interested in financial profit or stock ownership. These people clearly understand the technology behind the project and will invest if there is a notable positive outcome. For you to succeed in ICOs, you should ensure that you have a well-detailed whitepaper and that you have a reliable team. The team you are working with paly an essential role in the success of a project. Make sure that your team has evidence that it is committed and disciplined, do not just make claims with no solid proof. Investors are required to always do due diligence before going into a new investment. Take a good look at the whitepaper identifying any shortcomings associated with the project. A well- written whitepaper is not guaranteed that a project will be successful, but a shoddy paper is proof of inevitable project failure. Go ahead and conduct your research about the project and only consider it as an investment option of you are entirely comfortable with it.
  9. Hello Earnest, Gold exchange-traded funds are ETF which are based on the price of gold. Exchange-traded funds act like individual stocks, and they trade in the same way. So you do not own gold since these commodities are gold plagiaristic contracts that are supported by gold. It is worth noting that once you redeem a gold ETF, you don't receive a valuable piece of metal but instead obtain cash. Many investors use gold ETF to keep an eye on the price of gold in the market. Though the assets in the fund are supported by gold, it is not the intention of an investor to invest in gold. This ETF gives the investor the ability to get an idea of the performance or shift in the price of gold. Typically, gold's value tends to be more reliable when the US dollar is weak. So if you have assets which are affected by the dollar, it is advisable to purchase a gold ETF to counter the effects when the dollar is on its downside. Therefore, a gold ETF is an exchange-traded fund that is used to offset the risk associated with commodities or also gain exposure to the price movements of gold itself. Investors can also use this ETF if they want to familiarize themselves with the gold mining industry. So it is right to say that the gold ETF acts as an industrial ETF. This fund can be used to offset the risk associated with operating in foreign countries or to acquire knowledge of the overseas market. Investors may use this fund in countries that solely rely on gold as a source of revenue as protection if they have assets in their investment portfolio, which are at high risk in that country. If you are an individual looking to own gold, this ETF is not the thing for you. You do not get any gold bars coins or medallions.
  10. Hi Earnest, ICO is used to denote Initial Coin Offering. This is the latest method of generating capital for all new blockchain-related projects. They usually put in to use freshly obtain crypto tokens to purchase coins such as bitcoin, Ethereum, other cryptocurrencies, and sometimes fiat. Therefore, on the occasion where a project is launching a new currency, they use ICO to gain more investors. Companies that are using ICO can make millions of dollars within a short period. Recently ICO have shown a lot of potentials as derived from the stats making it accessible among investors. They give the most straightforward way for DAPP makers to obtain capital for their projects. Any person can invest in projects by purchasing coins related to the particular DAPP and actively take part in the project. ICOsare similar to stocks but have utility for a commodity offered or a software service. To purchase ICO, you need to be having a digital currency and also knowing how to use cryptocurrency wallets. When investing in ICO, you are required to be cautious and highly diligent as they are not regulated. When a project wants to generate capital from ICO, they draft a whitepaper that explains what the project is all about; they want it will satisfy upon completion, the number of funds needed, what type of money will be used, and how long the project will run. The campaign is unable to come up with the expected amount of funds, the investments are returned to the investors, and the project is deemed unsuccessful. If the funding required is met within the specified time, the funds generated are used to realize the goals of the project. It is advisable to issue a limited amount of tokens, so ss to ensure that the ICO has an objective. When the supply of tokens goes down while the demand rises, the value of these tokens also increases.
  11. Hi Earnest, Gold exchange-traded funds are typically derived contracts based on the actual price of gold. So you will not be precisely owning gold bars or coins. This fund is multipurpose since you can use it to do quite a several actions. You can use it to track the price of gold and gain exposure to the market shifts. You can also use it if you want to make investments in the gold mining industry or obtain information about the industry. You can also use it as insurance to your assets if you are an investor in a foreign country that relies on gold as a source of income. Apart from having multiple uses, the fund also has other advantages such as the fact that trading is secure as an investor is required only to buy one unit of gold or more, which is equivalent to 1 gram of gold. Buying and selling these units is similar to equities. Trade is possible through fund managers or stockbrokers. This makes transactions easy since you can buy and sell these units from any part of the country in just a few steps, and the disparity of gold prices because of GSTs will not affect the price. There is also guaranteed open trade since the price index of gold is available to everyone in public. Gold ETFs are economical since there is no entry or exit system; therefore, there are no extra costs, but the only thing you pay is 1 percent of the brokerage fee. You also enjoy tax benefits since there is no transaction tax or wealth tax applies to this fund. Unlike real gold, this ETF is a safe option since there is no risk, such as theft, and there are no storage costs incurred. Gold rates seldom fluctuate so one can use them as insurance for your assets at risk.
  12. Hi Stella, As the name speaks for itself, this model allows the trader to have direct interaction with the physical market. This is the distinguishing characteristic between it and market maker brokers. Direct market access brokers allow the CFDs trader to interact with live order books which is a market spread globally. Therefore, it is the best model if you are a trader who is set at getting the mere reflection of the prices in the market. Initially, only the big financial institutions used to reap the fruits of direct market access. This has, however, been altered due to vast advancement in the world of technology, allowing it to benefit even the retail investors. The trader can take part in the transaction opting to hit the bid button or wait in a queue. This means that the trader has a chance of entering the market at a lower cost the using the market makers. It also implies that the trader is the sole bearer of any risk associated with making a transaction. On the other hand, the trader will reap the maximum profit on the CFD sales. The brokers play no part in influencing prices. The only get commission on the transactions made during sales. They act only as a medium between traders and the live market. The model, however, requires live or real-life interaction which in turn affects the liquidity of the market. There are a lot of delays associates with this model when completing transactions. Direct market access is highly decentralized as it is noted that information about the prices is available to all. Benefits of direct market access:  Transparency  A wide range of markets  Active participation in the market The only shortcoming is that there is a lack of market liquidity due to delays as traders and the live market are required to have an active presence for transactions to happen.
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