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Tag: Online trading

  • Online trading beginner’s guide to online investment

    Online trading beginner’s guide to online investment

    Most of the people are not actually familiar with the term, What is online trading or online investment ? How to invest without broker ? etc etc. This article will help you to know online trading or investment. Online trading or investment is the process of trading through internet in which people or investors buy/sell shares or goods for financial security or further investment for future.

    We can also call it Direct Access Trading, it is a technology that allows stock traders to trade directly with market makers/traders or specialists, rather than trading through stock brokers. Online trading or investment is a good and beneficial platform for all(beginners as well as experience)those who want to invest in the market. This kind of online trading can be done in foreign currency as People can trade with foreign market through internet as well. This way of investment is very attractive because you can make or earn lots of money very quickly.

    What is Online Trading or Online Investment ?

    Online trading or online investment has become very convenient for all of us. Now a days people are very much concerned for trading or investment in the market as it is the good source to earn more money. Online trading is very cost effective and faster trading, as you can contact your traders or  customers via electronic mode/internet and get your business done in a minute itself. But for that you need to be very careful while handling online payments or receipts as many frauds take place. Many people use Demat account for online trading as it is one of the most convenient trading option. Some beginners will find it ( Demat account) difficult to handle as it is provided with so many options although you will learn. Online trading is also available on mobile handsets or gadgets with the new innovative ideas that can be very easy for you to handle.

    Online trading Beginner’s guide to investment !

    At the beginning, Online investment or Online trading guide for beginners can be intimidate because there are chances that some beginners might get threatening from other people as they have made a decision to invest in the market without broker or adviser. Most people likely to invest in the Stock Market with GOLD,  SHARES and EQUITIES as it is the good source to invest or to earn money, But you need to understand demand and supply in the market as all prices of goods are determined by demand and supply. If there are more buyers in the market then prices will go up and if there are more sellers in the market then prices will go down. It is really the simple concept for all whether you are buying or selling stocks, bond, real state, currency pairs, commodities and other assets as well.

    To begin with online trading one need to understand the basics on online investment or online trading –

    • Stock Trader or Online trading account
    • Finding the right and best online trading platforms
    • Find the best stock broker
    • Selecting the right kind of stock
    • Understanding market and making investment decisions

    Here we will detail about how to begin with the basics of online trading.As we detailed you about what is online trading now we will begin with 5 Bulletins of Online trading basics.

    Read Also : Exclusive Nest Egg building guide for painless millionaire dreamer

    # Stock Trader or Online trading account

    Stock trader or online trading account is the platform for those who want to trade online or want to invest money for future purpose. Online trading account is used to buy and sell goods in the stock market. People also use this account for the security for their assets, bond, gold etc. This is the platform that provides online brokers to every single investor who wishes to invest or sell in the market.

    How to open an online trading account ?

    For opening an online trading account you need to follow few steps below :-

    1. First select your good broker or firm to start your trading account.
    2. Fees or charge of broker, some broker will charge you less or some will charge you more.
    3. Some broker will give you discount the basis of you investment conduct.
    4. Get in touch with your broker or firm for the information of account opening.
    5. Firm or broker will give to form to fill and submit the form along with documents and your address proof.
    6. After filling the form its time to verify your application form, and after it firm or broker will contact you via phone where you will ask for personal details.
    7. Once done, now you will be given your trading account details. Congrats, Now you have a online trading account.

    This way you can create/open an online trading account.

    # Finding the right and best online trading platforms

    Lets find online trading platform that is suitable for you.

    • HTML 5– It is most suitable platform for traders. They have best customer knowledge to fulfill their requirements. It is very easy to use and complete customer trading platform.
    • Angel broking app – This is the smarter mobile trading app, It is very easy, simple and enjoyable app that gives you  speedy secure stock trading experience.
    • Sharekhan – It is the single platform for multiple exchange like cash, currency, mutual funds and many more.
    • My value trade – This trading platform is built for secure and low trading by professional investors and traders. It provides you advanced charting, and new strategy to deal with.

    # Find the best stock broker

    For good and better trade you need to find best broker to start with. here is the list that you can find broker for you:-

    1. TD Ami trade –  This is the no. 1 ranking broker that provides you tools, mobile apps(mobile trading), customer service. It is one of the best and experienced broker.
    2. Fidelity – It is the top class broker that drive customer experience and gives full satisfaction to their client through research report, quality tools.
    3. E*Trade – It is the option for house platform along with mobile apps. E*Trade is one of the well rounded broker.
    4. Sharekhan – It is also known as Trade Tiger. Sharekhan is one of the famous and good stock broker for trader, traders can easily rely upon it.

    # Selecting the right kind of stock

    Stock is the main reason for online trade. you need to find good stock for trade that enhance your capital and trade. Here is the list of some best stock that you can use for your trade.

    1. Trade in liquid stock- Liquid stock is relatively  safe and easy to trade with as liquid stock tends to be more highly discounted than the other stocks are.
    2. Equity – It is one of the long term investment for financial market. people can buy and sell equity with the 100% security and it is one of the convenient method for market.
    3. Shares –  Shares are the unit of amount in financial market which is also a king of stock in money market that people buy and sell for financial security.
    4. Mutual fund – Investing in mutual fund is one of the online safety and convenience of award winning online platform.

    # Understanding market and making investment decisions

    Understanding market and making investment decision is the most difficult for many people as it is related to money only. The two most important decisions an investor will make are when to buy and when to sell. The best time to buy stock is when others are pessimistic/negative. and The best time to sell stock is when others are actively optimistic/positive. You need to remember one thing while buying the possibility of high return is greater after its price has fallen rather than after it has risen.For example if stock of a same company X declined by 30% to 40%  the first question will come in our mind is WHY? Why did the stock fall as it did? Did other stocks in the same industry experience a decline? If so, was it as severe? Did the entire stock market fall?For instance Stock in the same industry performed well there may the problem to other company(x). So it is always good that you should adopt new strategy and implement it. According to Benjamin graham, the father of value investing, once said, “The buyer of common stocks must assure himself that he is not making his purchase at a time when the general market level is a definitely high one, as judged by established standards of common-stock values.” His reference was to what we discussed as fair value under the section Stock Valuation above.

    Read Also : Short term Investment Plans – Pros & Cons

    Guidelines for Online Trading beginners

    The best part of investment is that people always curious to know or invest in the market also those people who have never invested in shares will have strong opinions. Most people or beginners learn articles about investment from Online Trading Academy Website, it is good to learn or to get some idea actually before you invest your money in the market  OR  How to get started with online trading or investment?  So here are some guidelines for beginners what they should do to get started with online trading. Let’s have a look :-

    • Safety and Security –  It is one of the major requirement for everyone before investing. You have to check the security features inbuilt in your account.
    • Trading Plan – Trading plan is the first rule for beginners. Decide what you want to trade, how much you want to invest, your goal for profit, your tolerance for risk, and your devote to investment( every day, week, month or year ).
    • PAN or Permanent Account Number Card – It is the primary thing which is required for financial or money transaction.
    • Quality of information or account content – Make sure that you are getting a right and best information, research, support and tools which is being provided to you in a easy way.
    • Credibility or reliability – Investing in the shares is not easy you must ensure that you are getting additional safety for your investment.
    • Broker – Although broker is not required for online trading but also we can not go directly to stock exchange and buy or sell goods. So broker can help you for investment and provide other information.
    • Trading account and Demat account – You can not hold shares in physical form for that you need to open Demat account or Trading account. it will help you to store your shares whatever you buy or sell in the market.
    • Customer care – If you are investing your shares online then you need to know whether you are provided with customer care or not to solve your queries or problems.
    • Position or Goodwill of Company – Make sure you are investing or trading with the company who has good position or reputation in the market which is not fraud or cheat.
    • Maximum Profit – It is the kind of rule for the beginners to “lose small, win big”. To earn more you need to have good information or education about the online trading so that you can deal with the investors or traders or sellers.

    Read Also : Investment on Stocks and Shares -Pros and Cons

    ONLINE TRADING PLATFORM AND PRODUCTS TRADED ONLINE :-

    Stock market or Equity market is a public network of economic transactions for the trading of stocks, shares and debentures etc at an agreed piece. Lot of people appreciate ease and comfort of working from their home and online trading is the best option for them. There are various online trading platform available for traders.

    1. Trading Account – For trading online you need to open trading account first, that you can use for your trading or investment.
    2. Demat Account – In simple term we can call it saving or investment account. Demat account can be use for security of money, shares, bonds etc.
    3. Angel Broking App – It is the smarter mobile online trading app. This app helps you to secure stock trading experience with all new technology in a easy and smarter way.
    4. Meta trader 4 – MT4 is online or electronic trading platform. It can be use for foreign trade also, as it is widely used by online trading foreign trading exchange.
    5. E signal – E signal is also online trading platform that is one of the smarter trading tool. It offers you the best charting platform to understand the trading.
    6. Forex – Forex is really a good way of trading. Online trading is a most convenient trading option.

    More on Stock Trading

    Stock market is a multiple platform where investors traded publicly, where companies are issued, brought and sold. It is also a platform for gamblers. although many people don’t considered it as gambling. Because when one invests in the stock market he will either win or loss depending on the condition of the market. For example if you put $200 on one roll of dice. If you by chance win, you win $X and if you lose it you would lose entire amount $200. Like wise when you invest in stocks there is always chance of either you win $X or lose $Y but sometimes its rare to lose, unless you invest in the company that go bust. Make sure  you make good decision to invest in then money market.

    What cause stock price to change?

    Stock price changes are a complicated thing for a common man.

    Prices of stock always dependent on its factors whether  price will rise or fall. Prices are determined by two main factors i.e. DEMAND and SUPPLY. Other  factors includes media, opinions or advise of well known investors, natural occurrence, political and social unrest, risk in the market, lack of suitable alternative. These factors are really important for price determining as it also tell us about inflation and deflation in the market that creates a certain type of sentiments i.e. bullish and bearish and a  correspondence number of buyers and sellers. If there are more sellers than buyers in the market then price will tend to fall down and vice versa.

     Stock Market is difficult to predict Why?

    Stock market is difficult to predict because it is dependent on various factors including demand, supply, advertisement, preference of people, supplementary and complementary good etc these are the factors that keeps changing that’s why it is hard for investor to predict. Now Let’s assume stock prices have been rising for several years and investors realize that stock prices will be in trouble because of correction in the market. Therefore it is difficult for us to understand what exactly the trigger of selloff. However, some investors or traders seek right opportunity to come to invest in the market. But some investors are willing to take risk and jump in and it hurts them when they see stock moves higher and they are in loss. This raise the couple of key questions in our mind. If you’re on the sidelines, how will you know when to get in? If you’re already in, how will you know when it’s time to get out? If the stock market was predictable, these questions could easily be answered.

    However, it is not. That’s why investors are required to considered these three issues.

    1) First is understanding the point at which stock prices are fairly valued.

    2) Second issue is the event that will cause a downturn.

    3) Third or Final issue is understanding the human decision-making process. Let’s briefly look at these.

    Stock Valuation

    Every stock’s actual price is determined by market movement or activity. When an investor makes the decision to buy or sell, he will often compare a stock’s actual price to its fair value. For instance, if a trading stock value is $30 per share and its market value(fair value) is $35, it may be worth purchasing. conversely, it it trades at $30 per share but fair value is $25, then it is loss to investor because stock would be considered overvalued and he would only like to avoid it. What is the fair or market value of stock and how do you calculate it?? preferably, it would be based on some standardized formula. However there are many ways to derive this figure.

    Here is the methods to calculate stock value or fair value of a stock –

    Method 1) we can combine the value of company’s assets on its balance sheet, then minus depreciation and liabilities.

    2) We can use this method to determine the intrinsic value, which is the  net present value of a company’s future earning.

    You can apply these two method but there are number of various method also. As different method drive slightly different result, Therefore sometimes it can be difficult to know if a stock is overvalued , undervalued or fairly valued. And even if stock price is overvalued, that doesn’t mean investor s will suddenly sell and prices will fall down. Literary, a stock can remain overvalued for quite some time and that is why it can be problematic to many investors to make buy or sell decision as  prices of stock are always dependent on some moving average.

    Triggering Event

     Sometimes Many investors can affect because of triggering events as it is the king of cause that occurs due to tangible or intangible barriers. But these are the event are written to contract for investors to make them feel that they are on right place and help them to execute their plans. But you need to know which event will cause a trend reversal is similar too see around the corner of a solid brick building or company.  

    The Human Decision Process

    Human decision process is depended on two components i.e emotion and action. Every individual has these two components inside them. We analyze our situation using logical side but when it’s time to ACT, we refer our EMOTIONS.  For instance, when purchasing a car we might research the engine, fuel efficiency, amenities and many more. Such as we often question to our self like how do I look like in the driver’s seat? Does the car match my engine? Same happens with making investment decisions, what you want to buy and what other wants to sell, and what other wants to buy and what you want to sell  as there is always an investor on the other side. But you must be able to make your good decision and analysis the relevant data. Therefore,  it’s impossible to know everything you want to know  and it will lead to process without any bias.

    Conclusion

    Investment decision is not a cup of tea. In this advanced world every one needs to be very smart to make their own good decision. Before investing in the market investors need to analyze everything about the company, broker, price of share market, choice of stock, about trading and what is demand and supply in the market and so on.  It’s important to understand qualities that most top investors/traders have, to profit from the stock market! These qualities can be developed if there is willingness to succeed. With the help of trading skills, and business strategies you can invest in the market but traders need to adopt their own style of strategy. Hope this article will help you with your investment decision in the future.

  • Forex trading beginner’s Guide to Earn without Loss in Forex

    Forex trading beginner’s Guide to Earn without Loss in Forex

    Now a days trading is something big decision in life as it deals with money investment in the market. Most of the people don’t know how to trade in market, online market or Forex trading. This article will tell you about Forex trading and how you can invest your money in the market and can deal with the currency as Forex trading is the market where people deal with currency or where currencies are traded. Forex trading is the big investment market because currencies are important to most people around the world. And currencies need to be exchanged in order to conduct foreign trade and business. Thus, it is the benefit for those who (Beginners as well as experienced) want to start their business in Forex trading.

    What is Forex Trading or Forex Market ?

    Forex is a name for foreign exchange market and foreign exchange currency trading. Forex is the global market in the world as it is the market where traders exchange one country’s currency into another country’s currency for commerce or business. Exchange of foreign currency is necessary for trade and also for so many reasons for example Tourism, investment, business, or to purchase something from other country, it generally requires a currency of that particular country to do so. Forex market is the largest and most liquid market in the world and this includes all aspects of buying, selling, and exchange currency at current determined price. To understand this concept let’s take an example of traveler, an American(USA) tourist or traveler can’t pay in dollars to see the monuments in India because it’s not the locally accepted currency. A s such tourist has to exchange dollars into Indian rupees at the current exchange rate.

    So, To Trade with foreign country it is the primary requirement to exchange currency to that particular country you are trading with. As Forex is the international market and one unique aspect of this market is there no central market place for foreign exchange. It is the platform where currency trading and all the transaction can be done electronically via computer around the world. You no need to exchange currency on one centralized place. 

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     Forex Vs Stocks 

    In today’s world it is tough to make a business or finding a success in stock market. As traders all over the world are switching to FOREX because of the many advantage of the Forex market. Traders are very much interested in Forex as it is global market and is open everywhere in the world. There are many difference between Forex and stock market which will help you to find or trade with good one.

    FOREX

     

    1. In Forex you can do 24 hour trading  as you can access the market for longer than operating hour.
    2. Forex is famous for its liquidity as Forex could be easier due to increased market liquidity over stocks. 
    3. Market growth of Forex has been growing for the last 15 years unlike stock market.
    4. Small Forex market can lead to large gains or profit because Forex has potential of large profit as well as loss.
    5. In Forex there is requirement of middleman so that s/he can make you familiar to every information or other things related to Forex trading.
    6. It is good trading than stock as it gives opportunity to every single person to trade in Forex.

    STOCK

    1. Stock market does not allow you to trade 24 hour  as it is limited has has its own time of trading.
    2. Stock market is less liquid than Forex market. Forex market has been increasing in liquidity over stock market.
    3. Forex market replaced stock market as stock market has returned to pre-2001 volume. Because of it stock market is not growing rather going down.
    4. Short term investment in stock market doesn’t lead to profit unlike Forex. Stock market is less impact in terms of profit.You must be very well aware of the pros and cons involved in short term investment plans.
    5. In stock market you will not be provided with middleman or broker who will help you to understand the concept of stock market and provide you information.

    Read Also : Investment on Stocks and Shares -Pros and Cons

    How does Forex Trading Works ?

    Trading in Forex is not so easy as it is the financial market in the world. And trading in Forex can not be done in one place or central location but it connected between participants through electronic communication network in various market around the world. Here you will learn about Forex working .

    • Forex trading is the simultaneous process of buying in one currency and selling it to another.
    • These two currency make up pair and what is known as “currency pair“.
    • Currencies are always traded in pairs and each currency is represented by three letters. i.e. INR, USD etc.The first two letters represent the country and the third letter identifies the currency.
    • The pairs are read in the opposite direction of mathematical ratios. For example INA/USD = 68.65
    • Left side currency of (/) is called the base currency ( INA) and the currency of right side if slash is called quote currency ( U.S Dollar )
    • This mean that 1 unit of base currency ( .i.e 1 rupee) is equal to 68.65 to U.S Doller
    • You have to pay 68.65 to buy 1 U.S.Doller
    • And in above example you will receive 68.65 when you sell 1 U.S. dollar
    • Forex trading works 24 hour a day with non stop access to global Forex dealers.

    This is how Forex trading works according to the current price of currencies. There are other indicators that helps in the work of Forex trading like Demand and Supply are the  trading indicator that tell us about the market condition and price of stocks.

    Before we move to the section of how to begin with Forex trading or how you can start Forex trading you must have a sound knowledge about online trading basics .

    How to begin with Forex Trading ?

    To commence any business or trade, primarily thing required is to understand that particular commerce or business in which you will trade with. Like how to invest, where to invest, how much invest, and stocks. These are the basic things that are necessary for any trader to deeply understand. Here we will let you about how to begin Forex trading?

    • To trade in Forex it is very important you read and understand what is Forex trading? . As i have already discussed about it in the stating of this article.


    Learn Forex Basics before investing in the Forex market as mentioned given below:-

    1. Forex Broker – Brokers are the requirement in any business or trade. So, in order to start Forex trading,you will need a broker to help you in Forex trading. The Forex broker only facilitates your buy and sell orders and also allows you to research into the markets.
    2. Trading Platform – You need a trading platform from which you can place your trades. Trading platform also helps you in technical analysis and  also to see the current market prices.
    3. Forex Trading Hour – It is true that Forex is a market where you can work 24 hour a day, as it a market that  never sleeps. And this is due to the fact that it is global market. You can always find any  information at any time.
    4. What is a PIP ? Point in percentage (PIP) is a measure of change in a currency’s pair value. It uses to calculate profit and loss in Forex trading. When you trade, the more pips you make, the more profit you have. So it is important to understand PIP to make more profit. For example if you buy EURUSD at 1.31428 and sell it  (or closing your trade) at 1.31528 then it would give you 100 PIPs in profit.
    5. Reading quotes – By reading quotes you would be able to see basic numbers appears on Forex quotes. The Bid price of the left and Ask price on right side. Bid price is use to buy and Ask price is use to sell at which you can sell. EURUSD quote would look like this 1.31428(Bid) 1.31420(Ask).
    6. Base currency – To trade in Forex you need to understand BASE currency. The base currency is the currency against which exchange rates are generally quoted in a given country. It is also called a first currency.  For example – USD/IND, the U.S Dollar is base currency, IND/EUR, the IND is base currency.
    7. Quote currency – It is the currency that is also called second currency quoted in a currency pair in Forex. In a direct quote, Quote currency is foreign currency and in an indirect quote, quote currency is domestic currency. We can use this quotation to find a value of a currency determined by its comparison to another currency.
    8. Pair currency – The value of currency is determined by comparison to another currency. A currency pair is a quotation or structure of the currencies traded in the Forex market. The first currency of a currency pair is called the base currency, and the second currency is called the quote currency.
    9. Cross currency – A cross currency pair in Forex is that when one foreign currency is traded with another currency without including the U.S Dollar. Cross currency does not include U.S Dollar in trade. Like EUR/IND, EUR/AUD etc. As they are characterized by higher liquidity.

    You need to understand all these POINTS to begin with Forex trading. All are equally important in Forex. Get the basics down and start on a simulator first.

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     Forex as Hedge !

    Hedging is a simply way to protect yourself from any big loss in trading. Forex as hedge is simply a transaction by a Forex trader to prevent an existing or anticipated position from an unwanted move or loss in exchange rates. Hence, Forex exchange market provides hedge to traders so that they can protect themselves from any big loss in the Forex market. Some extent future market also offers hedge for currency risk, depending o the size of trade and actual currency involved. A Forex trader can be protected from downside risk by using Forex hedge properly, and also a trader who is long accustomed to foreign currency pair can be protected from loss or downside risk, while the trader who is a short or short term currency pair can only protect against upside risk. Hedging is a good way to protect or reduce the amount you loss in forex trading and would incur if some unexpected happened.

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    Forex as Speculation ! 

    As we know that trading or market always depend on factors such as demand and supply, interest rates, economic strength, tourism and many more .Because of the constant fluctuation there is always a chance of profit and risk of loss which we know as speculation.  Speculation in Forex market is an act of buying and selling the foreign currency under the condition of uncertainty or fluctuation with a view of earning huge gains. There is always a risk as beliefs can be wrong. Often, the speculator buys the foreign currency when it is weak and sells it when it is strong. As speculators have expectation to get high return. The speculation said to have both the stabilization and destabilization impact on the exchange rate as speculator buy currency at cheaper rate and sell it at higher rate. Hence, there is always a risk of belief to get more in trading that can be wrong sometimes.

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    Top 5 Risks in Forex trading :-

    Risk in trade is very common thing that every trader face. The Foreign Exchange Market or Forex Trading facilitates the buying and selling the currency around the world. As the trading is global there is always a chance of risk to lose (loss). Traders need to understand the various risks involved in Forex trading and careful while trading in Forex market.

    1. High Risk Investment – Trading foreign investment carries a high risk investment and may not be suitable for all investors. So before investing into foreign market you should considered your level of experience, your object, and risk appetite. You should be aware of all risk associated with foreign exchange.
    2. Interest Rate Risk – There is always a risk of interest rate. If country’s interest rates rise, its currency will also strengthen and vice versa. Due to the nature of interest rate there can be a effect on interest rates and difference between country change. Thus, Trader need to be very careful about interest rates of that particular country.
    3. Transaction Risk – There is always a risk in transaction as TR is associated with exchange rate. Rates are determined with the difference between time of beginning of a contract and when it settles. As Forex trading happens 24 hour basis which can result in exchange rate changes before trades have settled.
    4. Country Risk – Some countries have fixed rates such as USA (US Dollar) and central bank must sustain a adequate reserve to maintain a exchange rate. A currency crisis occurs due to frequent balance of payment deficit and result in devaluation of the  currency. And this can effect on Forex trading prices.
    5. Supply and Demand risk – If county’s supply and demand is not good then it can effect Forex trading as prices of stock depend on its supply and demand. So Traders need to understand the concept of supply and demand as well.

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    Pros and Cons of Forex Trading!

    Forex is foreign exchange market and global market in the world and associated with high advantages (pros) as well as disadvantages (cons) laid out as follows:

    Pros of Forex trading

    1. Offers high liquidity – Forex market provides high liquidity transaction as compares to other financial markets. It totally eliminates the possibility of price manipulation. One no needs to worry about the high volatility during opening and closing hours.
    2. 24 Hour work – Forex market provides facility to work 24 hour a day . You can get any information, changing in price etc at any time as it is open all the time.
    3. Ease of doing business – It is easy to work with Forex market. As there are hundred of  indicators on Forex for short term trade as well as long term which makes trading easier.
    4. Low cost – Forex trading can have very low cost of brokerage or commission. There are no commissions in a real sense  as  most Forex brokers make profits from the spreads between Forex currencies. Hence you no need to worry about brokerage commission .
    5. No central exchange – There is no central exchange for Forex market. Various countries central banks interfere as needed. But Forex trading is only market where there is no insider and which is dependent on global factors.

    Cons of Forex trading

    1. High risk  – There is always a risk of profit and loss in Forex trading as it is global market. One can get multiple time of profit/loss in Forex trading. You need to be very careful while investing in the Forex.
    2. Self directed learning – In Forex market traders have to manage themselves as they have to manage their own trade and provided with no assistance unlike in other trade market. They have to guide themselves  and manage their own work.
    3. High volatility – One can easily suffer  huge losses in the highly volatile Forex market with no control over macro economic and geopolitical development. If things go wrong with stock then it would be huge loss for traders.
    4. Complex price determination process – As you know that Forex fluctuates and influenced by multiple factors that can become difficult to analyze price of stocks and most Forex trading happens on technical indicators, which is the primary reason for the high volatility in Forex markets. Getting the technical wrong will result in a loss.

    You need to keep in mind all the pros and cons of Forex that can help you to invest or trade in Forex in future in a better way.

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    Ways to approach Forex Market !

    There are various ways to approach Forex market where you can deal in currency with different different countries. Traders and Investors must focus on matching  a strong currency with weak currency.

    The best ways to approach Forex market are :-

    1. ACTIVE TRADER – Forex trading or currency trading promotes as an “active trader” opportunity. In this way traders buy and sell security and with the in intention of holding security for short duration. Every active trader will try to make benefit through the short term price movement and will be more often focusing in the higher demand financial instruments .People always associate active trading with one of the most  speculative trading strategies. This strategy also beneficial for trading brokers as they can make extra money from this strategy.
    2. LEVERAGE TRADING – This is a king of leverage trading approach of Forex trading where investors expecting the profit made to be grater than the interest payable.  And therefore it becomes easier for a trader to open an account with a small amount of money than is necessary for stock market trading.
    3.  CARRY TRADE – It is also necessary to understand the fundamental and long term benefit, when a currency is trending in a specific direction and is offering a positive interest deferential that provides a return on the investment plus appreciation on currency value. For example, a trader can buy the Australian dollar against the Japanese yen, and the Japanese interest rate is 0.05% and Australian interest rate is 4.75%, so trader can earn 4% on this trade.This is the carry trade approach in Forex.

    These above approach can help you to find out best trade or investment in Forex.

    CONCLUSION

    Forex is global trading market just like stocks, you can trade with currency with different different country. Forex is big international market or trading spot in the world. Traders can take advantage of this market by trading around the world. For the beginners it can be little bit difficult but with the help of brokers  one can easily trade in Forex market. But you need to be very careful while investing in Forex as it is online trading market you can be cheat by others. Hope this Forex trading beginner’s Guide will help you in future to invest in Forex market.

  • Investment on Stocks and Shares -Pros and Cons

    Investment on Stocks and Shares -Pros and Cons

    Today investment is so popular as everyone wants to increase their assets.But finding the right choice of investment is quite difficult . Short term investment or long term , and where to invest all this buzz every investors head. Investment on Stocks and Shares is always the popular choice.

    Investment on Stocks and Shares 

    Let us take a look on the Investment on stocks and shares to understand which is the right investment choice .

    stocks-and-shares

    But all have a confusion where they have to invest – Is it on stock or on shares. In order to answer this you should the pros and cons of stocks and shares.

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    What is Stock?

    You might have heard the term stock not only in financial sector but in many fields where purchasing is involved. In financial sector, Stock is nothing but a general term which is used to describe the ownership in a company or corporation. It is issued by means of certificates which are called ‘Stock Certificates’. To put it in simple words, stock is a collection of shares.

    stock

    Stocks can be either Preferred or Common. If someone is holding a common stock in a company, they can attend the board meetings and participate in the voting for decisions taken on various issues. On the other hand, if someone is holding a preferred stock, they can’t vote. But Preferred stock holders are eligible for receiving dividends from the company.

    What is Share?

     We are hearing daily about the share market in the news section in TV channels. Share is nothing but the smallest unit of a stock and it is specific to the company. For eg. “I bought N shares of C Company”. Here N indicates the number of shares bought and C is the name of the company. Unlike stock, share can be measured in numbers. If a person has bought more number of shares of a particular company, then he/she becomes the shareholder of the company. Generally companies will release only certain portion of their shares to public.

    share

    Here you have seen stocks vs shares . Now to know more in detail you should know the pros and cons involved in both investment to take a wise decision. Investment decisions is based on the risk involved and the preference of risk. So you have to decide your investment choice by evaluating the pros and cons.

    By just knowing what a stock is and what a share is you cannot take any major decision on Investment on Stocks and Shares. So know further to increase your knowledge on investments.

    A .1 ) Stock – Pros and Cons

    Pros:
    • Dividends: If someone buys a preferred stock, they will get dividends from the company which can be used for reinvesting again.
    • Passive Income: Any income from the stocks is passive as you don’t have to put any effort for getting money.

    stock-pros-and-cons

    Cons:
    • No Minimum Guarantee : As the stock market is fluctuating, there is no minimum guarantee for profit. You cannot predict the interest amount as compared in other financial sectors like banks.

    So here you are understanding investments and stocks . This will give you key idea on stock but to take a final decision of investment you should know the pros and cons involved in shares as well.

    A .2)Share – Pros and Cons


    Pros    :
    • Passive Income: Share trading is a good source of passive income as you are getting money without putting any effort.
    • Qualification: You don’t need any great qualification for investing in shares but a basic knowledge about shares are enough to start with.
    • Travel: You don’t have to travel or do any physical work for investing in shares. It is very flexible and you can work at your own timings by relaxing and  sitting at home.
    • Less Investment: As shares are available in various ranges of prices, you can buy shares with less value and you don’t have to spend more money which is especially helpful for beginners.

    share-pros-and-cons

    Cons:
    • Share Buying : Buying wrong shares may result in heavy loss which will affect you physically as well as mentally.
    • Quarterly Results: When a company announces its quarterly results, you can see a drastic change in the price of the share. If the results are bad, then your share price will go down.

    So here you are having 50 % knowledge about Investment on Stocks and Shares. Moving to know further on stocks and share will help you to decide better on investment .

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    Top 5 Factors to Consider When Selecting a Stock

    • Always choose stocks that offers dividends as it is more beneficial for your future investment.
    • Find the market cap for the stock you are buying. Mid cap stocks are usually better than other stocks as they provide best return on investment stocks .
    • Find out whether the price you are paying for the stock is really worth. Sometimes we may spend more money for the items than their actual price. 
    • Find the enterprise value of the company from which you are going to buy the stock. It will help to find the true value of the company.
    • If you want to become a long term investor for a company stock, you should gather all information about the company like products/services offered, top level management, future projects, profit/loss balance sheet etc.

    stocks-vs-shares

    Factors to Consider When Selecting a share

    • Before buying the share of any company, add the company to your watch list for a week or so and observe its rates daily. There are many free portfolio trackers available online. You can subscribe for one and start analyzing. Also gather information about the company’s performance and its growth.
    • Divide you share investment equally into shares that grow quickly and constant growth shares. Oil company shares are quick growth shares as the oil prices are changing often. Shares of Banks provide a constant growth as there is no sudden change in their policies.

    You should analyse the risk to take an investment choice and it differs from one person to another .So you should know this before buying stocks and shares.

    Investment on Stocks and Shares should be analysed by knowing the risk involved in it . Some of you may be risk lovers and some o you will be risk averse. So which gives you the lesser standard deviation you can go for that when you think about increasing your asset.

    Risks in Stocks

    • Losing money – Loss of money is the biggest risk in stock trading as there is no minimum return guaranteed as the stock market is fluctuating.
    • Credit Rating – If the credit rating of a company goes low, it will affect the price of the stock because the company is getting its financing or loans based on it. A low credit rating means the company is not able to pay its debts in time which indicates a poor performance of the company.
    • Media – If a company is making a news to the media often even if it is a rumor, it will affect the price of the stock badly.

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    Risk in S­­hares

    • Fluctuation: The biggest risk in share is instability as the price of the share is not constant and changes daily. On the positive side, you will get profit in short time if the price of your share increases. But if falls drastically, you will suffer a heavy loss if you hold more number of shares of that particular company.
    • Health factors: You may have to monitor the price of a share daily if you are investing huge amount of money. You cannot sell the shares if the prices has dropped and have to wait till it goes high. This may affect your sleep in the night as you will be thinking what will happen tomorrow.
    • Choosing Right shares: If you are beginner in share trading and doing it without the help of any financial advisor, it will be difficult for you to choose the right shares as you don’t have much knowledge.
    • External factors: There are many external factors which decide the price of a share without your involvement like change of government, change of directors of the company etc. Suddenly the company may go bankrupt and you will get zero money as return, in such scenarios.

    Conclusion

    Investing in shares and stocks are not free from risks. But if they are analyzed and invested correctly, you can yield high returns.So you can now decide about Investment on Stocks and Shares according to your choice.

  • Swing Trading Vs Position Trading – Pros and Cons

    Swing Trading Vs Position Trading – Pros and Cons

    Here we will discuss on a most interested trading concept comparison – Swing trading vs. Position trading . You may be aware that there are different trading styles . Here we are picking up comparison of just two different styles of trading . That is a comparison between Swing Trading Vs Position trading .

    What is trade ?

    Before we begin with the cross comparison between Swing Trading Vs Position Trading , let us take a look at the basic concepts like –

    What is trade

    Trade is nothing but simply an act of exchange of commodities and services in return for money .

    Trader Vs Investor

    Here let us begin the discuss by pointing out the key differences between trader and investor . Also this would be well understood by understanding Trading Vs Investment .

    Investing Vs Trading both differs even though it sounds similar . Trader and Investor participates in financial market but their approach and goals varies.

    Trader looks for profit frequently in every month but an investor is happy with the annual return of same percentage.

    Aim of both investment and trading , is to gain profit but the profit creation approaches of a trader and an investor really varies.

    Trading is a frequent exchange process , i mean selling and buying happens so frequently but investment is a period of time process to get profit .

    Several people who become interested in trading are firstly introduced to the financial markets through the process of investing. The main purpose of investing is to build wealth slowly over a period of time. This is generally accomplished through a buy-and-hold approach for e.g.: investing on stock or mutual fund etc and monitoring the price to fluctuate over the investment period of time.

    Trading profits are achieved basically through:

    • Buying low and selling high
    • Short period process and the time duration of trading is based on the style of trading .

    Trading Styles – Trader’s Style 

    There are mainly four different trading styles that exist but if we look deeply we can find basically Trader’s style is counted to five .

    So there are totally 5 trading styles .

    • Position Trading
    • Swing Trading
    • Day Trading
    • Scalp Trading
    • High frequency Trading

    Trading Style Time Frame Holding Period
    Position Trading Long Term Months to Years
    Swing Trading Short Term Days to Weeks
    Scalp Trading  Shortest Term (Very short)  Seconds – Minutes
    Day Trading Short Term Day only

    The chart explains the Holding time period and time frame of each trading style in a way how each trading style differs. One should know about the pros cons of each trading style to choose the Ideal trading style that suits you .

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    Here we will take the comparison of two primary trading styles – Swing Trading Vs Position Trading

    Swing Trading Vs Position Trading – Pros and Cons

    On the comparison of two primary trading styles – Swing Trading Vs Position Trading , first let’s understand what is position trading and swing trading .

    Position Trading

    Before we compare Position Trading Vs Swing trading , let us understand what are these trading styles individually.

    So , What is Position Trading ?

    Based on stock trends , position trading focus upon the intermediate trends .Position trading is an approach in which the trader either buys or sells contracts and holds them for an extended period of time. Position trading is also known as ‘trend trading‘. Positions can be open for a few days, a few weeks, and a few months or longer than that at times. They are also held during periods of minor retracement with the expectation that they will eventually continue trending in the desired direction.

    Position trading is generally long term , but the investors always keep a close look the price chart and fluctuations regularly . The fall in price over short period is generally ignored. Position traders are known to be investors with a combination of fundamental and technical analysis .

    Now let’s take a look at the pros of Position trading before comparing Swing Trading Vs Position Trading.

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    Position Trading Pros 

    • Position trading is the easiest to learn also it is estimated that up to 25% of position traders learn to become profitable easily.
    • Position trading is less stressful as compared to swing trading.
    • It is Easier to become successful even if you have less start up capital.
    • It is easier to predict the market as follow and observe the market trend on regular basis.

    Position trading is the most profitable type and also less time consuming than the other trading.

    Position trading Cons

    • As positions can be highly leveraged and trades remain open for extended periods of time it gets difficult to get in regular benefits of interest.
    • There is a build in risk associated with position trading as there can be a major fluctuations over night in the market.
    • In position trading Money can be tied up for an extended period of time that can stop entering into new positions as they arise.
    • Because of the duration of time involved in position trading, traders can experience major decline in an investment with the belief that it will turn around and start trending back soon in the needed direction.
    • Psychologically this can have a very harmful effect.

    Swing Trading

    Swing trading is a short-term plan used by various traders so as to buy and sell stocks whose technical analysis that indicates different trends like an upward or downward trend in the near future which last usually one day to two weeks.

    Swing traders are never bothered about the long term value or fluctuations of a stock . They always look for the near term of the stock and closely watch whether a stock can rise or fall using technical analysis.  

    Swing Trading Pros 

    • It doesn’t have to be a full time job and it is for long term with long time duration. Any person with enough capital for investment and accurate knowledge can try swing trading.
    • One can sit back and relax as he/she doesn’t have to keep their eyes on it as swing trading doesn’t require continues monitoring or observation.
    • Trades takes time to work out in that situation it is best to keep a trade open for a few days or weeks so that it results in higher profits than trading in and out of the same security several times in a day

    Swing Trading Cons

    • It is unpredictable as No wonder how much alert you be in the day time but markets can make a quick move overnight while you’re sleeping hence the market is closed. If in case such a moves overnight is against your trade, it can be a mean arousal after you check your position the next morning.
    • You hold up your capital for longer duration with swing trading as compared to day trading.

    Both the trading style are good and bad in their own ways . On a comparison of Position Trading Vs Swing trading,  one cannot directly advocate that this style of trading is the best .

    Because the final decision of every trader is influenced by certain trading factors like – risk tolerance , time , personality ,experience in trading , size of account etc.

    So you can let us know which is your preferred style of trading – Swing Trading Vs Position Trading or something else !!!