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EXPERT'S ADVICE

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  1. Hi Myles In forex trading, ranging market is when the market price is not stable and keeps on getting to its extremes .that is, it is moving to the highest rate of the moment and also hitting the lowest of the day repeatedly. It can also be defined as a market that is bound, indicating that it is not going above a specific high price and also not going below a notable mark. Having understood the ranging market lets shift our focus to the indicators of the market There are several ways to identify a ranging market. Here I will discuss the tools that shall incorporate the Use of Algo. Here Algo is the abbreviated version of the name algorithm Algo is the commonly used method of analysis. Use of the Average Directional Index (ADX) ADX or Average Directional Index is a tool used to indicate the trend in change of price in either direction. Here the device will show a high value if the price was always moving up or down. This tool does not choose the path but indicates constant change. For example, the device will show a high figure if the price is continually moving down and report the same value when the price is on a constant upward trend. One can identify a ranging market using the tool. When the reading is low (25and below), it is interpreted that the market price is moving horizontally, indicating a ranging market. This tool is commonly added into the Algo to give the desired filtered results Use of a Relative Strength Index tool The relative strength index tool is technically a programmed tool used to indicate how strong the price trend is. When the device suggests a high figure, this shows how strong the instrument of trade is moving, and when the picture is to a notably low number (below 30) figure, the vice versa is true. Therefore a ranging market will have a value that is near the midpoint. The power of the down word movement neutralizes the strength of upward change as a trader one should be able to identify the ranging market by any figure between 40 and 60 in the relative strength index. By Use of The Average True Range tool The name indicates that one will assess the trend by Use of the average range. The average is the differences between the highest price and the lowest prices hit at that specific period. It is a tool that has been used for a long time to indicate the trends in the market. When the average figure is high, it suggests that the market had a fair share upward or downward movement. If the value is low, this indicates the price was ranging around the same figures for that period. The above tools have been accessed and have proven to give accurate indicators of a ranging market. As a trader, the ability to incorporate these tools in your daily market research has proven rewarding. It is therefore advisable beyond doubt that an Algo with these tools gives better analysis than one without
  2. Hi Linah, Forex is a global market where traders all over the world exchange currencies. Every day several million to trillions are changed to different currencies. Due to its vast size, it is conducted online in a market known as an interbank market. As the online market is the norm nowadays, many local investors are moving to Forex trading for several reasons highlighted below 1 It Highly Flexible Forex trading has attracted a good number of investors due to its availability 24hrs a day, five days a week. It is the only market where the business is during the day and even at night. Investors are busy people during the day and will enjoy trading at ease. Being online does not limit one at a particular location to trade, therefore one to merge it with another form of business or even job. 2 It Is Worldwide It is the largest market in the world since several companies, such as hedge funds and multinational institutions, will require foreign exchange to facilitate their daily operations. As a trader being in a large market, you will enjoy the fact that no particular person or institution will control the market. 3. It Is A Transparent Form Of Trade The currencies involved in this form of business are eight, which are easy to convert. In forex trading, one does not face hidden charges. There are no clearing fees, government fees or even exchange fees 4.Its Easily Accessible One can join or exit the trade at the comfort of your office or even home. Since the vital requirement to trade is a computer, internet, and about 100 us dollars. Here you will create an account and log out at will. Trade can be done anywhere as the android phones support several apps regarding the trade. 5.Highly Regulated The brokers are regulated to avoid fraud and other related online crimes. All the countries contribute towards the safety of its members hence forex becomes the best in terms of safety 6. Transaction Fees Are Relatively Low As earlier stated, one will trade directly on the web site; therefore, the high cost is website charges per transaction. Unlike other online trades where one pays holding fee, in forex, there are no such fees. 7. Very High Liquidity Liquidity is the ability of a sale repeatedly occurring without necessarily changing in price. They’re very many transactions done in a day; therefore, the cash flow will be high. 8. Great exposure When trading with international currencies, one tends to understand world laws better than a localized person. Here, one will develop a multination mindset. 9. Growth opportunity Many traders have not been able to master the trade. Therefore there are significant opportunities for those who will learn the business. These are, being managers, account owners, or even trainers to the other traders. 10.Online training materials Although the trade is not accessible, it is one form of business that offers free online training materials on how to do business and an excellent support team. Having discussed the reasons, one can see that the forex has more opportunities than local trade. It is also safer and more rewarding to a multinational minded investor. However, it is advisable to learn the business before investing as it involves nature.
  3. Hello Jovan, The question of whether cryptocurrencies fulfill the properties of cash has been a heated debate globally, raising all sorts of responses. Some may say that they meet the properties of money, but to come up with an answer, you need to look at the taxonomy of money and identify the category of cryptocurrencies. You also need to look at the three traditional functions of money and see if cryptocurrencies meet these functions. Taxonomy The criteria of classifying money are based on three key aspects; · Issuer. Government or private · Form. Physical or digital · Settlement of transactions. Centralized or decentralized Cryptocurrency provided by the government is digital and decentralized. They are usually in Cb reserves or CBDC. The private sources also offer digital and decentralized currencies, which is the known cryptocurrency. But does this mean that cryptocurrencies can replace the cash we use? To judge, we should look into the three traditional functions of money and see if cryptos meet the features fully or to which extent. Traditional functions of money The three primary features of money are; · Medium of exchange · Measure of value · Store of value When money was created, it came to serve as a solution when trades lacked a double coincidence of wants. So it is a medium of exchange that is recognized and accepted globally. Cryptocurrencies easily meet this condition, but it is another thing to meet the requirement technically. Though they are readily available, cryptocurrencies cannot replace the money. To see things clearly, let's look at the attractiveness of a currency. The attractiveness of a currency is based on two factors; · Stability · Acceptance Among the three primary functions of money, the Store of value overshadows the rest. For a currency to have a good Store of value, it is required to have stability. The question is, Do cryptocurrencies have balance? Lack of a central bank to regulate money supply makes cryptocurrencies to lack stability. Although there is a predictable supply, it is not a guarantee that demand will be the same because of the volatility of demand. These currencies have been fluctuating since their existence. To gain stability, it requires the whole world to abandon all other types of currencies and exclusively adopt cryptos as the accepted currency. To honest, this action is highly unlikely to take place. This means that cryptocurrencies cannot be used as a unit of account. Analysts agree that cryptos have a long way to go for them to fulfill the functions of cash. However, it is worth noting that of all the cryptos, only Bitcoin has shown to get demand as a store of value because it has credibility, and its supply is predictable.
  4. EXPERT'S ADVICE

    Exor

    Why did Exor stock crash last week? Exor N.V is a holding company specializing in investments. It covers sectors like; construction equipment, agricultural equipment, commercial vehicles, automotive industry, and reinsurance sector. Exor NV is a giant company in the investment business with goodwill at stake. Nobody would predict a change of event which is unfolding in their business line. Reasons for Exor stock crash by 10% Exor N.V, an Italian company, owned by the Agnelli family, is battling to boost its cash. The Exor stock crashed by 10%. This comes as a result of the backfiring of a deal to sell the PartnerRe reinsurance business at $ 9 billion to a French firm, Covea. The company's stock lost more than 50% of its value, due to the effects of the Coronavirus pandemic in Italy. Italy has experienced the worst effect of the pandemic. Exor N.V shows clearly that it is not considering a sale anytime soon. The company argued that selling the firm below the agreed bid of $ 9 billion will take into account its value. The bidder did not indicate any uncertainty which may affect their terms and conditions. No one will agree to take chances. The bidder might be taking the best available excuse for revising their terms. The option for Exor N.V is to try the next available alternative. The effects of CODIV-19 on the stock market On the other hand, Covea states that it cannot take over Exor N.V at the earlier bid. They fear that the prevailing situation of the COVID-19 pandemic may continue hitting the economy. Agnelli family maintains they will not lower the price. Covea's fear is justifiable, but since it was not included in their agreement, it is not applicable. With the current coronavirus pandemic, stock markets have responded with alarming unpredictability. The market has dropped with large drops. 2008 Recession The market was in submerge a decade ago in the year 2008. We have no assurance that we will not get back to this kind of scenario until the pandemic is over. Coronavirus pandemic has created indeterminacy in the whole world. Investors are getting prepared in case of a recession. The uncertainty of how far it may spread is making investors and economists struggle to gauge the financial implications. The two companies were planning a 50-50 merger. This is the biggest deal to collapse involving a European bidder. The effects of COVID-19 are hitting the economy terribly. Bidders are opting to cancel their sealed deals due to falling prices. A possible merger between Exor N.V and Fiat Chrysler As a result of Covea's withdrawal, Exor N.V will incur an extra cost. Fiat Chrysler, which is monitored by Exor N.V, has suspended 2019 dividends. For this reason, Exor may end up incurring an extra $ 340 million. The dividend may have saved the Exor Company a time like this when they are facing price dropdown. One of the Exor clan members, Elkann, is bargaining for another merger with Fiat Chrysler. Nevertheless, Exor N.V has hope that they will pick the pieces and stand again. Its outlook Exor stock analysis The negative news concerning the Exor N.V has resulted in their shares fall by 10%. For more than seven weeks, they are trading as low as 41. Current trading price is Euro/USD 49.18 +1.71 (+1.47%) Final statement The stock of Exor N.V was on a crash last week as a result of Covea pulling out of the merger deal. Exor lost more than 50% of their esteem.
  5. Hi Danny, CFD is the abbreviation Contract for Differences. CFD position means the ability of a trader to hold a contract for a specified period, and the period can either be days, weeks, or even months. To keep or not depends on the investors' ability to handle the risk. In this form of trade, there are no physical goods, shares, or even securities. It is a simple prediction in the change in price. Trade instruments are inclusive of shares, commodities, indices, exchange-traded funds, also known as forex and cryptocurrencies. One does not own them but only predicts if the price will fall or rise during a period. Many investors in the stock market will invest some money to foretell what will happen before buying the actual share. Brokers are the main component of the trade as they will help one to invest and assist in the business. The broker acts as a game partner as he earns when you lose and vice versa. CFD categories Traders are encouraged to hold CFD positions for long. However, it depends on the type of CFD one is trading in. Different kinds of CFD have different levels of risks. For example, if trading in commodity CFDs, which are things like gold, soybeans, corn, and wheat as the underlying asset, it is easier to predict than share CFDs. In share CFDs, the underlying share has other influencers to predict the price. Therefore holding a share CFD for long should be traded with caution. CFD positions in two broad categories. These categories also influence the time one can hold a CFD position. These are; Short CFD position Short CFD position the type of contract held when selling a contract since one has no control over who will be interested in it. It's owned by the trader when predicting a fall in the price of an underlying asset. He, therefore, chooses to dispose of before to avoid the loss. Long CFD position In a long CFD position, one will buy an asset and hold to speculate on price rise. If the prediction was correct and selling time was set right, the trader will gain a profit while the vice versa is also true. Therefore, when taking a long CFD position, one should consider the influencer's effects on the underlying asset. Both the above positions are not time-bound; therefore, a trade determines using his or her ability to hold to let go of a CFD position. The broker will charge you a holding fee by close of business every day, depending on the CFD contract one will be holding. In simple arithmetic, if one will be in a long CFD contract, i.e., speculating for a price rise, it will be getting expensive as the days trickle down There will also be a financing levy charge for every long CFD position held above 4 -6weeks. If you total the holding fee and financing levy, this makes it way expensive to maintain a CFD position more than 6weeks. Final say In a summative tone, it is advisable that one holds a CFD position to speculate on trade but not as a significant form of commerce. Its main advantage is that you will be able to observe the trend without necessarily owning the underlying asset; therefore, cushioning one in case a loss occurs.
  6. Hi Jovan, When choosing a strategy, you need to get the one that is in line with your expense ratios, market liquidity, and investment choice. First, you should know your risk tolerance. Do not go for a strategy that is going to stress you out in terms of risk management. The platform you are using should sync with your plan when it comes to ease of use and navigation. You can take up a platform without the required feature when using the strategy of your choice. Do not forget to consider your goal. Are you looking for fast returns within short time frames, or are you looking to hedge your portfolio's risk. Take all of these factors when choosing a strategy. Let us look into the best strategie you can use when trading ETFs. Swing trading As a trader, you hold short term positions for short periods. The main objective is to enter and exit a trade as fast as possible, making small profits frequently. This has the advantage of no overnight risk. It also disregards risks brought about by holding deals for long periods. It is ideal for a trader with a mindset of small profits throughout the day. It will, however, require you to be vigilant when trading. The features that ETFs hold make swing trading one of the best strategies to deploy. Using Inverse ETFs You will need to use a lot of technical analysis for this strategy to work. When the price is expected to fall, you will sell what you have and repurchase it when it hits rock bottom. You will be buying it in hopes of the price peaking again. This strategy may not work all the time, but it is an excellent tool for advanced traders who are familiar with the risks and how to effectively mange them. It also requires proper charting tools to determine the safest point of entry and exit. Offset risks with ETFs If you fear that your investments are exposed to risks, using ETFs may beefit you by hedging. You can hold short term ETFs, and thee returns gained will offset the losses incurred in case the risk takes action. This strategy is suitable for beginners who have acquired a portfolio through inheritance. Attain a steady flow of income with Dividends Dividend ETFs will see to it that you get a steady flow of income from the returns gained. Beginners can use it as a tool to grow their capital since you have the option of reinvesting your profits. Once you reinvest, you will be multiplying your gains. Short selling At this juncture, you will be selling loaned out securities or financial instruments. This is a risky method to trade ETFs, so beginners are discouraged from adopting it. A trader who wants to create short term positions in new markets and is familiar with the risks involved and how to manage them can use iShares EEM ETF. Gambling with Seasonal Trends As the description suggests, you do not have an assurity that the strategy can work. You will be betting on popular seasons. A good example is when Gold prices skyrocket because of the well known India ceremony "Diwali." The best time to purchase Gold Etf is mid-October and close up mid-November. Gold prices in India at this time usually go high, and traders can make a lot of gains. Now that you know some of the best strategies you can use, you can go ahead and choose the one that best suits you. Very many ways of investing ETFs are coming up; one of the underated is the Portfolio Prophet. It has helped numerous traders get more profits from their investments. Read more about it here.
  7. Hello Rockey, When starting an investment, it is normal to feel confused about the best option. After all, it is your money you are placing at risk. Seeing that you have chosen to try Exchange Traded Funds, some necessary information can come in handy. What are ETFs? An ETF is a type of fund that contains assets like bonds, gold bullions, stocks etc. in their portfolio divided into shares which are held by shareholders. It is a collection of securities which are traded similarly with stocks. Types of ETFs There are several types of ETFs you can find in the market. Below are just a few you can consider in your investment plan. Ø Bonds. They can be corporate bonds, Government bonds, state and local bonds. Ø Industry. They are used to track the performance of sectors like the gold industry or oil. Ø Commodity. Deal with commodities like crude oil. Ø Inverse. They work strangely. It involves selling an ETF and expecting a drop in price and later repurchasing it at a lower price. The benefits associated with ETFs are: · Lower Costs. This is because you don't have to par for mutual fund fees and expenses. · Trading flexibility. You can buy and sell at any point in a trading day. · Tax efficiency. The Procedure Of Purchasing The process is as simple. 1. Open an Account With a Broker The procedure for opening a brokerage account is as simple as opening a bank account. You identify a broker offering an ETF of your choice. You can find the best brokers here. Since you are just starting your journey, it is best if you went for a broker who offers Robo-Advisors. They will help you pick the best time to start trading and help you manage your risks until you feel that you can handle stuff on your own. 2. Identify Potential ETFs and Compare using Screening Tools Now that you have opened your account, the next step is to find ETFs and narrow down your options using screening tools. This will make it easier to pick the right one to trade. Criteria used to narrow down your options: Ø Expense ration. Incurring a lot of expenses will cut on your profits. It would be best if you went for an ETF with low administrative costs. Ø Commissions. These are the fees charged on every transaction. Ø Trade volume. The volume will act as a measure of popularity to avoid scams. Ø Performance. Although we know that past performance does not guarantee you returns, it can be a useful tool when making a choice. 3. Trade and Wait This is the last step in purchasing ETFs. Buying here is just like buying stocks. You simply use tha ticker symbol- the distinct identifier. It would help if you familiarized yourself with the following words. · Price. It is determined by the bid and asks. A bid is a price a buyer is willing to pay while as is the minimum price a seller can accept. · Number of shares · Order type. There are four types of order types; namely, market order, limit order, stop order and stop-limit order. · Commission · Source of funds By now, you have an idea of what ETFs are and how you can start investing. Here are some popular ETFs. Ø SPDR S&P 500 Ø iShares Russel 2000 Ø Invesco QQQ Investing in ETFs is more relaxed but you don't get high returns. It is, therefore, reasonable to invest in bulk but also take precaution when trading.
  8. Hello Myles, When trading in the forex arena, you need to involve brokers, and choosing the best one should be based on your needs. Let's take a look at the two main types of brokers and which you should choose to suit our interests. The main types are · Dealing Desk Brokers (DD) · Non-Dealing Desk (NDD) Dealing Desk Brokers Dealing desk brokers as the name suggests are brokers who pass their clients, orders through their desk. They are the ones that fill your order to the market. To make things simple, they are market makers. These brokers operate in a rather peculiar way since they go against your trade. When you make a loss, it is a profit on their side, and when you make a profit, it is a loss on their side. The deal does not sound good, but you have the advantage of fixed spread and dealing with Nano slots. If you are looking for assistance with risk management, this is the best option to go with. Note that this activity is not illegal. The broker can quote a price that is above or below the market price. This situation is like dealing with people who have access to the cards you are playing with while you are in total darkness. Non-Dealing Desk Brokers This type of broker will not pass your order through their desk. They only act as a portal between you and the liquidity providers. You can refer to them as hands-free middlemen who get returns from commissions or slightly marking up the spread. They are further divided into two: · Straight Through Processing (STP) · Electronic Communication Network (ECN) Straight Through Processing (STP) These tpy of broker gives you direct access to the liquidity providers, So you have the privilege of measuring the market's depth. They get returns buy slightly marking up the spread. So the range you will be getting will be marginally higher than the actual in the market. However, you have direct market access. Electronic Communication Network (ECN) When using this broker, you have direct interaction with the liquididty providers. The difference is, they do not mark up the spread but charge commissions on trades. Which one should you go for? This entirely depends on your preferences and skills. If you are a beginner, it would be best if you went for the Dealing desk (DD). You will enjoy fixed spread and less risk exposure. You will also enjoy the benefit of being able to trade with Nano lots. The Non-Dealing Desk broker is suitable for advanced traders who want to make the best from each pip. You will enjoy better spreads; however, more risk is associated with this method.
  9. Hello Jessica, As you have stated, you have just started in the Forex arena, so you probably don’t know much. When you go on the web looking for the best currencies to trade, you will be fed information about the popular currencies. The problem is, you are not looking for popularity but advice. You are just starting your journey; advanced traders use most of these popular pairs so you need to start with a currency that suits you best. It should be managed efficiently and give you the right profit margin. Which currency is the best to use? EUR/USD It is one of the significant trading pairs as it is traded globally due to its liquidity. It is popular among advanced traders, and it is not recommendable for beginners. It is not easy to predict its movements due to its volatility. The changes in a day can be many and happen very fast. So it is not suitable for people who are just starting to trade. It requires a lot of technical analysis and fundamental knowledge to trade. GBP/USD This pair is highly sensitive to news affecting the EUR/USD and political prevailing in the UK. Many people prefer it because when there is a breakout that is showing resistance and potentially goes against a trader, it triggers stop losses. It is moderately severe for a beginner to trade with, but you will need to take precautions. It works best if you go for long term trades. Volatility is predictable, but it would be best for you if you worked closely with American analysts. USD/JPY This is the hardest pair to predict. It is affected by news in Japan and USA. The pair is not comfortable to trade for beginers since you will need to know its underlying dynamics and movements. However, if you consider using it, it would be best if you used Swing trading. Furthermore, the majority of the information from financial institutions and banks is inaccurate. USD/CHF It is a unique one because it flows in the opposite direction with the EUR/USD. Compared to the EUR/USD and USD/JPY, it has the best flow. Additionally, it is not affected by news that much so movements do not occur frequently. It is useful for a beginner because you can use it as a tool to determine the trend of other pairs. It is ideal for people who are new to the game because it is predictable and less volatile. AUD/USD and USD/NZD Both of these pairs move have the same trend and are stable. It displays slow and calm movements and is affected by weather conditions and metal prices in Australia. When the conditions are not favorable, the prices tend to fall. It is suitable for beginners, but you should keep a close eye on the conditions in the regions. USD/CAD The USD/CAD is a gentle pair to trade. It is not highly volatile, and because of this, technical analysis is made easy. It is worth noting that if you choose to go with it, keep yourself updated with news involving oil performance. It is ideal for beginners due to its simplicity, but if you want to better your return, you can work with American analysts. In a nutshell, as a person who has just started trading, you should not goo for popularity. You may end up going for major currencies and bring you losses because you don’t have the skills to manage it. Go for a pair that does not require a lot of experience, and you are comfortable with it. Choosing the best currency is a decision that should be thoroughly researched and analyzed.
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