eToro – Social Trading

Posted by Deb | Forex | Thursday 8 November 2012 11:52 pm

Some time ago I was contacted by a sales person who told me about eToro. I attended a webinar explaining the concept of social trading, and it sounded promising: Instead of relying for your trading solely on your own knowledge and estimates, you can rely also in real time on the decisions and judgement of other experienced traders. In eToro you can even decide to be lazy and let others decide for you: You can attach a certain amount of your investment to the account of some other trader in this system that seems to be doing well, and they will buy and sell for you according to this trader’s actions.

As the main trading tools in eToro are of Forex, and I am no Forex expert, I decided to open a demo account and see if the lazy attitude can work for me. In the demo account you get an initial account of $10000. I decided to choose 6 traders that seemed to be doing well according to the given statistics in eToro, and tie $1000 from my account to each of their accounts. The remaining $4000 I left idle.

My conclusion: NO. You can’t have totally “lazy” account. Maybe I just didn’t choose well, but what happened was that in the first 2 weeks my account grew nicely, but then it had a few drops. I didn’t touch any of the trading decisions, letting it go automatically with the decisions of my “gurus”, but that didn’t go well. In the first 2-3 weeks I was making money (or demo money), but than I lost most of it. Today, about 6 months after I opened the demo account, it is only worth $10150. 1.5% in 6 weeks may be not so bad, bad it could have been better. In the first 2 weeks I had made 3%.

That does not mean that I don’t recommend eToro, or social trading. eToro has some nice graphic and other trading tools, and being able to look “over the shoulder” of traders who are doing well is a wonderful asset. You just can’t leave your account to do everything automatically. In order to make a nice profit you should use the social networking but also the graphs and your own judgement in order to get out of your positions in the right time. You should also use the eToro learning tools to make yourself more knowledgeable about what you are trading.

If you are already an expert in what you are trading, you can also gain from eToro: If people choose you as their “guru” and decide to follow your actions, eToro would be paying you extra commissions, so that you will be profiting twice: From you actual trading, and from your followers.

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Best Ways to Invest in Forex Market with Little Money

Posted by Deb | Forex,Guest Post | Thursday 25 October 2012 2:42 am

In the present day scenario every banker and cooperate agencies provide 24/7 marketing facilities in trading currencies. FOREX market is more flexible with online access but is a risky job, yet many prefer it because investors with very little money can intend to gain larger profits.

• Choose the best way to invest your money: FOREX is a biggest financing market which took over even the US stock market by making a turnover of 4 trillion dollars each day.

• Contact with a reliable broker: As FOREX possesses many terms and conditions, check whether the chosen trader follows the rules and regulations or not. To do so, you can log on any governments sites and enter your broker’s name to get their complete details.

• Software: Install software’s such as Metatrader 4 which provides the complete view of current prices and gives alerts on technical analysis.

• Educational financial institutes: Search for best networking websites to enhance the knowledge on trading market along with basics statistics and free guidelines on traders and trading styles.

Tips while investing in FOREX market:

• If you are new to this create a mini FOREX trading account initially

• Take advice from the traders who are already into this market.

• Track the currency fluctuations in market in areas such as GOLD, OIL and STOCK markets

• Make a point to be stick only one pair of currency whereas most common pairs are listed as USD/JPY and EUR/USD

• Undergo various money management steps to increase profits and reduce bigger losses

• Try to invest only 80% of your money on stocks market. For instant you are holding £1000 and invested in stocks, if there is a sudden fall of price to $0 then the complete amount invested will be lost. So as in FOREX you can lose more than invested, hence make a point to invest only 80% of money

• Make multiple transactions instead of one big transaction

• Look out for the dealers controlled by the law and avoid fraudsters

• In FOREX you have an option to withdraw or cancel your order if you’re unable to manage funds for your chosen pair of currencies.

• Try investing in safer deals and make sure to maintain a track all your expenses while undergoing huge profits or loss. To overcome from such sudden crises you can make use of same day cash loans which can be get approved for any emergency with minimal processing time and higher interest rates. These are short term loans in order to get instant cash which can be repaid by their next pay cheque.

Therefore as mentioned above FOREX is a risky investment market where you can intend to lose your earned cash and fall into financial crises but with proper research and good management you can reap profits. Hence ensure to take safer steps to gain revenues and double your invested money.

About the Author:
The guest post was contributed by Alicia, financial guest blogger from Manchester, UK. Find out more about her finance related blogs @financeport

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Forex Trading Tips for the Beginning Trader

Posted by Deb | Forex | Friday 19 October 2012 12:15 am

Although my trading experience is mainly in futures, I have been recently looking also into Forex trading. One advantage of trading in Forex is that you can start from a relatively small account, and do your first steps in a low-risk manner, trading with small amounts.

Following are few tips I have gathered while learning how to trade on Forex. Most of these tips really apply to all types of financial trading, with their specific twists for Forex trading:

  1. Risk Management: This is one of the most important rules in any trading. Similar to what I have written about risk management in futures trading, in Forex trading you should also always decide in advance how much money you are prepared to risk. Don’t enter a position before knowing this figure in advance, and don’t let your position go further than your risk level.
  2. Know your goals and limits: Be honest with yourself and define how much you expect to make from trading: Is this for you a part-time hobby, or a serious profession? Do you expect to gain a weekly allowance or do you see your trading as something which eventually will let you quit your day job? Know you limits: Don’t get greedy. Don’t let yourself fall into losing all your money in a losing position. Control your ego: don’t add to losing positions.
  3. Don’t spread your trading on too many currency pairs. Start by educating yourself on one pair, and then add a few more. Each currency pair has its own behavior, speed and characteristics. Start with one pair, and only when you feel you understand it well and have enough experience and skills you can move on to another one.
  4. Start small: Begin your Forex career with demo practice. Practice until you feel sure enough to try the real thing. Start your real trading with small amounts and minimum leverage.
  5. Remember: as an individual trader you will never have the inside information or the influence of big corporate Forex traders. Your trading will always be speculative. If you acquire good trading habits, statistically most of your positions will succeed, but you will have to accept that sometimes you will lose.

Good luck in your trading!

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Scalping Forex Brokers

Posted by Deb | Forex,Guest Post | Wednesday 17 October 2012 7:04 pm


The term scalping is referred to a trading style which consists of executing many single trades with the sole purpose of making small profits for a short period of time. Usually, forex brokers do not welcome this type of trading because they are not able to hedge this exposure elsewhere. By accepting the risk against scalpers forex brokers simply lose money. However there are a handful of brokers which easily accept this trading style because they have a large pool of orders and can manage the risk properly. These brokers are classified as scalping forex brokers and are highly valued by forex traders.

After you read this article let me know was it interesting for you and how it contributed to your trading knowledge?

What is Scalping?

Many traders, especially beginners rely on this trading style because they see quick and easy profits in it. However, once identified as a scalper you will hardly get a good execution.

The reason is that forex brokers usually don’t welcome scalpers. Although they will accept you as a client, sooner or later you will experience significant difference in the execution. To trade with this method you certainly need an automatic trading robot.

The most well known trading platform in the world offers the opportunity of using such robots, they are called expert advisors. By using such program you eliminate the risk of emotions trading and also human mistake. The robot executes trades regardless of the result. It always follows the rules.

For example you can set a fixed + 3pips take profit rule and -1 pips loss. It is clear that one of three trades must be successful in order to don’t lose money (if you trade with the same quantity). You can ask a developer to write this algorithm for you but remember that what I just offered is an example and is not in any way a recommendation of a trading strategy. You should create your own scalping strategy which is based on facts and technical analysis.

Is scalping profitable?

This question is exactly the same as the question: “What is first: the egg or the goose?” Nobody can say 100% if a certain strategy is profitable because of few important factors:

Markets change

The only thing you can sure of is that nothing is sure. While your scalping trading strategy might work today, tomorrow the market will react in a completely different way because of major economic events or clearly because of market sentiment. That is why every strategy, no matter scalping or long term, cannot be relied on for a long time. You have to adjust it all the time when this is needed.

Scalping is stressful

The more trades you make the more is the stress and the frustration of the unprofitable ones. This can create inconsistent stykle of trading and can ruin your trading career. The easiest way to end it up is to wipe out your account in a single trade with not well managed risk. That is why scalping requires high level of discipline and excellent knowledge of the trading platform you are operating with. However, if you manage to trade with a scalping strategy it means that you already mastered the forex trading.

How to find a scalping broker

Brokers do not state they accept or reject scalping. There is no way to see such brokers classified in official reviews site, neither you will receive a “yes” or “no” answer from their customer support. Instead, you should read forum threads and share opinion with people who experienced a real live account execution over the time.

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Currenex Brokers – are they true ECN?

Posted by Deb | Forex,Guest Post | Wednesday 10 October 2012 9:28 pm

The concept of ECN trading has been widely discussed over the last years. There are so many traders who put the conflict of interest question at a discussion that many brokers started to apply the ECN model. But what is the ECN actually? Many traders do not understand this concept and accept all that the brokers tell them. One of the most famous ECN platforms is Currenex and there are a handful of Currenex Forex brokers that might proudly call themselves ECNs.

After you read this article tell me how it contributed to your trading experience. Was it useful for you and will you recommend it to a friend?

Trading on the Forex Market is certainly not an easy task and everyone should carefully understand the models of trading to choose the best for his or her trading style. Let’s see the most widely used trading models.

ECN Forex Trading

ECN stands for electronic communication network and it plays the role of a place where buyers and sellers meet to execute their orders. An ECN comprises of an order book with two opposite sides of the deal – buyer and seller. On each side buyer and sellers place their offerings with quantity and price. It actually looks like an auction but of course everything happens quickly and is managed by automated systems.

The best advantage of this model is the high level of transparency. The Currenex platform, for instance, shows each counterparty name and quantity. Like this you can see with whom you are going to execute the order. The spread is narrowed down to 0.4-0.5 pips depending on the current liquidity – that is to say how many orders are taken in a certain moment.

For example the most traded currency pair EUR/USD can produce a spread on 0.2 pips because there are so many counterparties that currently place an order for EUR/USD. However, the ECN execution is ensured by a provider and it also has to earn some fee for that service. So Currenex brokers usually charge a fixed fee in the form of % of the executed volume. In this case the total spread you might be required to pay will be around 0.6-0.7 pips but it still will save you a lot of costs since the usual target spread of dealing desk brokers is 1.5 pips.

Market Makers

As opposed to ECNs, Market Makers do not offer this level of transparency by simply giving you a quote coming from them. They do not combine many counterparties but narrow down the process to two counterparties – you and the broker. Thus there is a conflict of interest between you and your broker because each losing trade will be a winning one for it and vice versa. However, there is a widely spread misunderstanding that each losing trade of yours ends up in your broker’s pocket. Actually brokers net all clients positions into a single position and then what is left is being hedged fully or partially. In this sense we can conclude that everybody in the market is a market maker even you. If you have a long position on EUR/USD you might hedge it by betting against your friend. The main point is that it is your decision whether to hedge or not.

Which model is the best?

There is no such thing as best trading model. The most important factor is and always be the broker execution no matter if it is a market maker or ECN. Just choose the broker that fits your trading style and that is how you will be successful in the market. Also you should be advised that demo trading is not in any way the same as live. During your journey towards trading perfection you will find out that many obstacles will arise especially during news releases and major economic events. The trading model itself will not help you to be more successful but will help you to understand the mechanism behind trading.


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The Changing Face of Forex Brokers: How Technology has altered the Market

Posted by Deb | Guest Post | Sunday 7 October 2012 1:38 pm

 

The Changing Face of Forex Brokers: How Technology has altered the Market

 

If you were to list the individual changes that technological advancement has triggered within the financial market, then you would be committing to a long and extremely time consuming process. In fact, it is futile to summarise the impact of technology with a list of individual changes, as this would not do justice to the sheer scope of the transformation that we have seen in the financial markets over the last decade.

 

The Role of the Broker: A Constantly Changing Entity

 

With this rapid and unchecked evolution in mind, it is the traditional role of the forex broker that has experienced the most significant change. Once integral parts of the order execution process, brokers have seen the importance of their roles diminish greatly in the advent of technological innovation and sophisticated software development.  Most crucially, the design of cloud based trading platforms has enabled users to affect their own instantaneous orders, while relying on incorporated analytical tools to aid the decision making process.

 

With traditional forex brokers being increasingly sidelined by technological advancement, brokerage firms have been forced to react to maintain their own status within the market. Subsequently, many have redefined themselves as online brokerage companies, and employed the services of software experts to help them create their own unique trading platforms. By also providing technology based and educational support to traders who open an online account with them, they have at least managed to reaffirm their place within a changing market place.

 

End of the Road for Traditional Old School Forex Brokers?

 

So where does leave those equipped with traditional brokering skills and qualifications? Well the good news is that the successful transition of leading brokerage firms has sustained a steady supply of employment opportunities, so that it is still possible to find relevant work within the industry.

 

What has changed, however, is the nature of the role, with employers demanding a far broader range of IT skills from individuals who would like to work within the sector. This relates to the fact that online traders will often require system or network support as opposed to direct brokerage assistance, which renders the skill set of traditional forex brokers something as an unnecessary luxury for firms.

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Uranium Ore

Posted by Deb | Day Trading Journey | Thursday 13 September 2012 9:03 am

Where you planning on joining the atomic craze, making friends with Ahmedanijad or just testing radioactivity? Amazon has a solution for you:

Uranium Ore from Amazon

If you are checking this page, don’t miss the customers reviews. Scroll down and read them. They are hilarious!

 

Maybe Amazon will become the new eBay, not only for their good prices but also with the products people come up with!

 

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