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IQ Option Review

November 3, 2020 By speculativebubble Leave a Comment

IQ option is a highly regulated broker with a long standing tradition and totally transparent background. IQ Option has a sophisticated and easy to use trading platform and is recommendable for beginner and advanced traders.

iq-option-logo

IQ Option has been around since 2013 and it’s known as a reliable online trading platform for many, offering everything there is for clients to trade with — and that pretty much explains why they’ve got millions of clients using their services. When you use IQ Option, you can trade between stocks, options, commodities, forex, ETFs and even cryptocurrencies. It is also regulated by the Cyprus Securities and Exchange Commission (CySec), ensuring that clients get to trade comfortably and safely on their platform. According to this review on business24-7, IQ Options is one of the most trusted options brokers with a high tiered regulation and safety features which make is a 100% legit choice.

What Can You Trade?

IQ Option doesn’t boast about its broad trading platform for nothing; they’ve got five categories of trades available and within these categories are dozens of selections for clients to make. You can trade and switch around among 17 different types of cryptocurrencies or trade up to 300x leverage and invest with 90 forex trading pairs. You can also trade with price changes of 168 various stocks of up to 30x leverage in the Stocks CFDs category, which helps clients avoid any inconvenient short sale regulations. 

Should you be looking for Options trading, you’ll be glad to know that IQ Option offers 53 different options, all of which lets you speculate on the changing price dynamics of the hottest trading assets. Finally, clients can also trade among 25 ETF assets and have up to 100x leverage. ETF trading service provided by IQ options allows you to track commodities, indexes, and a basket of assets, enabling investors to speculate based on particular sectors of the entire industry — with so much to offer, it’s no wonder IQ Option is one of the most popular online trading platforms for digital investors. 

Demo and Live Account

For beginners, investing while learning on the go probably isn’t the most sensible thing to do — but when you use IQ Option, you get to use a demo account and virtually experiment with an unlimited supply of funds that will replenish itself over and over. This way, you’ll get to take your time to learn all the basics before you start using your own money to trade. 

When you’re ready to start trading, you can make a minimum deposit of $10 to open up your actual, live trading account. As soon as you’ve got your live account started, you can access at least 70 kinds of assets on the platform. Over time, you can opt to step things up and upgrade yourself to a VIP account with a minimum deposit of $3,000.

 

Signing Up 

You can sign up using either your Facebook, Google+ account or simply sign up using your email account in IQ Option’s signup form. Once you’re in, you can choose to practice any trading strategies or begin trading on your live account. Since everything on the platform is pretty intuitive, you’ll find your way around it and get used to the features in no time — it’s that simple!

IQ-option-sign-up

Minimum Deposit

The minimum deposit amount t IQ Option is $10. This is a relative low entry amount, because of which this platform is great for beginner traders. There is no minimum withdrawal amount at IQ Option – normally you can withdraw your money the same way you have deposited it.

How Trading Looks Like

IQ Option provides its clients with an awesome interface. Its got a load of technical indicators such as the simple function of moving averages and or the more complex ones like Bollinger bands. Whenever you’re stuck, you can look for the customer support links or the chat application to get advice from the knowledgeable staff. Then, when you’d like to look back at your trading history for reference, you can just click on the link to access your previous records.

IQ-option-trading

OTN Tokens

Thanks to IQ Option’s partnership with The Open Trading Network, clients are eligible for an added bonus that comes in the form of OTN tokens. The OTN tokens are released weekly and can be used on the IQ Option platform such that clients can use it to cover their commission costs. This way, clients can get rid of commission costs just by trading frequently, which in turn encourages greater trading volume to boost market performance. 

Additional Features

IQ Option prides itself on providing top-notch customer services, so you can expect no less than impeccable features when you’re using their online trading platform. Any queries can be directed to the customer service team and you can contact them via email, the online chat or a formal contact form. Their protocol is that they’ll get back to you within 46 seconds and all tickets should be resolved within 24 minutes — you can rest assured that they’ve always got your back, so your trading experience will be as smooth as it can be.

For payment options, clients can easily perform deposits and withdrawals through the diversity of payment services available. Clients can choose between debit services, credit options, online payment processors or even go for bank wire transfer. There’s a lot of flexibility here, which opens up IQ Options to a wide audience; they’ve made it such that anyone can hop on the investment market as long as they’re interested. 

Another added feature is that clients can trade on their mobile devices. The mobile application is available for Android and iOS users, and it’s wonderfully developed such that clients can switch over from desktop to mobile without much hassle. Not only are the features largely similar, but users can also choose to get push notifications from the app; you’ll get to tap into the investment market anytime and anywhere, making your trading process a seamless one. 

IQ Option is also famous for its trading competitions. These competitions, while sadly exclude European Union residents, are extremely interactive and enjoyable for traders to test their skill sets in this competitive environment. Within 30 minutes and with a virtual fund of $10,000, clients love participating in them because it allows them to pick up new tactics and learn to adapt their strategies under stressful conditions. 

For clients looking to learn more about trading, IQ Option provides them with a trove of educational and training materials to improve their trading abilities. The materials cover the basics, intermediate and advanced, so you’ll definitely find what you need here!

IQ-charting-tool

Potential Clients

IQ Option doesn’t offer its services to many countries due to local regulations, but it does still have an international focus with a goal to cater to as many world traders. For the most part, traders can trade in currencies like USD, EUR, CNY, GBP, TRY, MYR and IDR among many more. Aside from offering many languages to choose from, clients can get a secure trading experience with IQ Option’s “Know Your Customer” and its Anti-Money Laundering rules. This prevents any scam accounts to be credited because clients must provide personal information and photo identification before withdrawals or deposits can be made. 

IQ Option is the most, if not one of the best, advantageous broker platforms for clients. It has an impressive record of serving millions of traders from all over the world and they’ve got great transparency in their business procedures. It’s the preferred online broker platforms for clients because of how secure it is to use their amazing functions, suitable for both newbies and expert traders. If you’ve been searching for an ideal broker platform to trade cryptocurrencies on and you’re willing to experiment with forex and others, look no further because this will be the perfect online service for you!

If you want to see a short video overview of how you can sign up and start trading on IQ Option than you can check out this video below:

Filed Under: Brokers reviews

eToro Review and Insights

February 10, 2020 By speculativebubble Leave a Comment

eToro was founded in the year 2007 and has around 10,000,000 clients all over the world. It primarily pays particular attention to social and copy trading. Additionally, eToro also provides the same services in the cryptocurrency space.

Implementing copy trading for a client is quite easy on the eToro platform. There are some traders on the eToro platform who follow risk control rules and allow their trades to be copied. In this way retail account holders are permitted to mimic the different trades and strategies of these successful clients automatically as they are carrying them out.

According to this review on business24-7 many other brokerages have similar capabilities but most of them have not incorporated social media communication as well as eToro has. There is no guarantee that copy trading will make a profit or loss in itself.

eToro might have a couple of weaknesses in comparison to other trading platforms, but their platform is extremely well geared towards those who are familiar with forex and cryptocurrency trading. The price of trading on eToro is fairly higher than others for forex trades, a fact which together with their only online customer service, might spur you on to stay or trade somewhere else.

eToro uses an online chat and ticket to solve queries raised by clients like trade issues or account queries. They do not provide more in order to help you sort out trades and such. This lack of top-notch support for customers is most probably driving them away.

To open an account will cost you $200. If you are in the US or Australia, you only need $50 to do the same. eToro has high withdrawal fees, in the amount of $25 plus banking costs. While these withdrawal fees might be annoying, the lack of proper technology for connecting might be a bigger annoyance for traders who are more advanced.

Their platform does not allow adding third party algorithms or software, such as MT4. Reason being that eToro has no API interface. Due to these shortcomings, coupled with high spreads and a small catalog of products, prospective clients could leave for other brokerages.

Pros:

  • Social or copy-trading platform
  • Strong and clear charting
  • Skilled cryptocurrency catalog

Cons

  • Standalone version is unavailable
  • Very little Customization
  • No streaming news

Trust

eToro has authorization through the Cyprus Securities & Exchange Commission (CySEC) as well as being compliant with ESMA (European Securities and Markets Authority) rules. To some, the fact that eToro is domiciled in Cyprus, might be a matter of concern, as not so long ago in 2012, the country experienced a financial crisis.

eToro is also licenced under the FCA (Financial Conduct Authority). eToro’s fine print stipulates that they may hold client funds in banks outside of the European Economic Area, a matter which increases risk in the event there is a bank default. However, they do offer EU and UK broker default protection up to €20,000 or £50,000.

eToro offers no stop-loss protection or extra insurance covering. Their order-entry interface has no risk management features, besides stops and trailing stops.  Because stop losses for crypto trading cannot be less than 25%, it further increases investor risk and limits customization. Due to ESMA rules of August 2018, clients cannot lose more than 100% of their account value.

Certain security measures are taken which includes multi-factor authentication and standard SSL encryption.

Desktop Experience

The eToro platform runs on the web and is designed to offer ease of use. Though there is no standalone version, the platform does offer a simple interface. Their charting is full-featured offering 66 indicators and a number of drawing tools. Performance data from CopyTraders and CopyPortfolios is available. The news link does not offer any satisfaction as it opens up into a social forum. Watch lists are customizable and can be saved. eToro offers no MetaTrader or other third-party alternatives.

copy-trading-with-etoro

Mobile Experience

eToro offers an excellent mobile version that allows easy syncing amongst different platforms for different mobile versions like iOS and Android. The indicator menu is categorized into 5 basic types which are similar to the web version. It offers limited customization and fewer charting options. In contrast to the web version, the watchlist does not include client positioning data. Furthermore, users can set custom price alerts regarding the market events and account issues.

Research Tools And Insights

The research tools at eToro are not as organized and are only accessible through a blog that is in itself only a number of general articles, which are outdated. The mobile app indicates that analyst research is only available through funded accounts. The general blog topics covers titles like cryptocurrencies more in detail than others like market analysis or forex. In fact, crypto craze news from 2017 overshadows much of the current events. A couple of the articles cover topics like instrument-specific fundamental or technical analysis.

Education

eToro has a link to a trading academy in the footer of the website. Another link to a live webinar provides a page that’s shas no archives or any programs on it. Their educational portal only has 11 basic Powerpoint presentations. All of the advanced technical courses opened into listings of candlestick patterns. There are no educational materials but only brief descriptions of the platform and instruments in the FAQ section. It also has a YouTube channel with videos on the how-to section of the platform.

Special Features

eToro concentrates much of its strength on social and copy trading including portfolio copy and automated client trading. They also provide balance protection to their professional clients even though it is not required under ESMA rules. In comparison with other forex brokers, eToro might appear to be less favorable if its strength is not taken into consideration. Introducing an API interface will hugely reduce these weaknesses they have. For those wishing to piggyback on the portfolios of others or on proprietary algorithms the platform seemed to be just the right place.

eToro launched a blockchain wallet for smartphones on March 7, 2019, offered in 31 US states. 15 different cryptocurrencies are provided for in the U.S while 16 are offered in several countries. In the U.S only cryptocurrencies are accessible, whereas in other countries you can trade forex, CFDs, stocks, and cryptocurrencies.

eToro-trading-academy

Investment Products

With 19 commodity CFDs and 47 currency pairs, their product catalog is comparatively small. They cover over 1500 shares and 77 cryptocurrency CFDs  in their product line. When trading you can do so on both the long or short side but you should familiarize yourself with the fine print as each location and type of order incurs a different holding fee. With CopyPortfolio they are able to broaden the product catalog as the algorithms are able to access markets not directly accessible as CFDs. Though they maintain a program that is aggressive in order to avoid conflict of interest, they also act as a counterparty, as they set bid and ask values not matching consolidated market feeds.

eToro-crypto-portfolio

Commission And Fees

Spreads for minimum forex and commodity is very high. They ask 3.0 pips for EUR/USD and 75.00 pips for S&P 500 trades. Also take into consideration that their spreads can widen tremendously depending on market conditions. Their overnight and weekend fees are also high, which can reduce profit margins significantly. They have recently introduced commission-free stocks with overnight holds during the week costing 24cents per $1000 of leveraged exposure for a long trade. Although this fee triples over weekends, there is no overnight fee for non-leveraged exposure on along trade.

An extra $25 fee is charged on top of credit card or bank fees for withdrawals, which is one of the highest from European brokers. You may not withdraw anything less than $50. All withdrawal and other relevant fees are disclosed on a fee page containing few omissions. For inactivity you will incur a fee of $10 per month after being dormant for 12 months. eToro does offer clients a club program with discounts and some extra services dependent on your account size.

Customer Support

eToro offers 24×5 support with an exceptional FAQ section. They list no phone numbers for direct communication except for the Australian branch. There is a help center link that leads you to a FAQ as well as to a help database. However, the phone number link on that page routes back to the contact page. Very frustrating indeed. eToro has and maintains an active social media account like Twitter and Facebook for marketing and analysis entries.

What You Need To Know

eToro is perfect for beginners who want to start trading based on the performance of a robotic advisor or by piggybacking on their most successful clients. Since only a few strategies work in all market conditions, it can be a risky business. Advanced professionals who understand the risk of alternative copy-based strategies are most likely to take defensive action when so required. If you are a retail or a professional customer seeking a wider range of broker services or prompt customer service and competitive prices, eToro might not be the solution for you.

In the video below you can watch a video overview of the eToro platform, how to open an account and how you can start trading within minutes:

Filed Under: Brokers reviews

Plus500 Review

February 7, 2020 By speculativebubble Leave a Comment

Plus500 is a well-known broker, one of the best online financial firms for trading. They trade in a range of financial markets at low spreads, and no commission charged. They are an authorized broker licensed by Financial Conduct Authority (FCA) and have been registered in the U.K. since 2008.

Plus500 provides trading on various different assets including forex, stock indexes, equities, commodities, cryptocurrencies, ETFs, bitcoin, CFDs and options. They were the first to offer bitcoin CFDs in 2013. They do not charge any commissions on trades as all costs are contained within the spread for over 2000 trading instruments on their platform.

Since 2013 they were included on the AIM section of the London Stock Exchange, with a $2.25 billion market ownership and clients in more than 59 countries of the world.

Pros

  • Plus500 offers bitcoin, ethereum and other crypto currencies
  • No extra charge or commission for trading
  • Offers access to around 2000 trading instruments

Cons

  • Limited amount of educational material
  • The tools offered by Plus500 cannot be paired with other trading tools
  • Though there are 2000 trading instruments available, there are not a lot of tools to analyze with

Trust  3.9/5

Though Plus500 offers no deposit insurance, they are registered with many trusted accountability and visibility partners like the FCA, ASIC, FSCA, CySEC, MAS, FMA, and the ISA. They are required to make sure that funds from clients do not get mixed up with corporate funds.

In this way it ensures that should Plus500 become bankrupt, all client money will be protected. Under the financial services compensation scheme (FSCS) any downfall of funds up to £50,000 will be compensated for. An amount up to £85,000 will be compensated for in case the custodian bank holding client’s funds is liquidated. Negative balance protection is another solution offered by Plus500 where the client will not lose more money than what they have invested.

Desktop Experience  3.2/5

No matter what browser you use, the Plus500 WebTrader platform is easy to access. It has a clear and simple layout which makes it easier to analyze and monitor trades. Their technical analysis charts can be viewed in full screen. They also have over 100 indicators applicable to numerous time frames. Though Plus500 offers access to many platforms, MetaTrader is one exception that they do not offer, even though Metatrader has better functions and is easier to customize. Plus500’s WebTrader is easily understood with more than 2000 trading instruments to analyze and monitor trades with, and everything can be done in the same window with just a few clicks.

Mobile Experience

The Plus500 application is also available for all types of mobile devices like the Android, iPhone, and iPad. It is similar to the desktop version as it has all the features offered on the desktop application. Over 2000 trading instruments can be accessed on the mobile version. This platform has different security measures like fingerprint unlock, amongst many. Traders can use the available tools to analyze and monitor trades similar to the desktop application. What might be a concern though is the lack of advanced security measures, especially taking into consideration that these applications directly link to funded accounts. The MT4 mobile application cannot be used from here even though it is better customizable.

Research Tools And Insights  1.5/5

In regard to research, analysis, commentaries and tools, the platform has very little to offer. There are no news feeds, research articles or videos. They do however provide access to an earnings calendar and customizable charts for conducting technical analysis. Additionally, Plus500 has a  “Trader’s Sentiment”, an indicator that shows the percentage of Plus500 clients purchasing a particular instrument.

Education  0/5

Many brokers offer online courses, videos, eBooks, and articles to educate people on the different markets they wish to invest in. Plus500 does not offer anything of this sort. Generally, brokers also post the Key information Document featuring all the basics and tools required for trading, but Plus500 doesn’t provide any such document. They expect the individual to be familiar with the workings of the trading markets. You can also find more details about education in reviews published on the internet.

Special Features  0/5

Plus500 does not have the special features typically offered by a broker. They do not allow automated trading through trading algorithms. They also do not provide back testing or managing third party funds through PAMM or MAM platforms. They only offer a Webtrader platform with access to trading apps for iPhone, iPad and Android. Its clear to see that they target only those clients who need to execute trades without a lot of extra functionality.

Investment Products  4/5

They don’t charge commission on trades, as all costs are contained within the spread for each of its more than 2000 instruments. They also do not offer volume discounts for large volumes. Spreads are the same for one lot or for a 1000 lots. You also do not incur charges for withdrawals or for terminating an account. However, should your account be inactive, a fee will kick in after 3 months. As a beginner you can open an account with a minimum of £100.

As a trader you can qualify for a professional account offering you a higher leverage. With this account you can increase maximum leverage 10-fold, from 1:50 to 1:500.

They offer access to options trading, however these are not standardized, as they can be customized for risk tolerance.

Commissions and Fees  4.1/5

Plus500’s spread is one of the lowest on the market. In exchange the trader pays with limited research and analytical tools and a substandard trading platform. You can read more about commissions and fees in this review.

Customer Support  3.6/5

Plus500 offers both online chat and email support around the clock. No service phone number or toll-free number is available to contact them regarding queries. Any inquiries made through the email support system or through the online chat system gets a quick response. The customer support is still good since the online chat offers prompt and correct response or provides links to resources. It also has a wide variety of FAQs and the customer service response to the requests are quick and clear.

What You Need To Know

According to this review on business24.7 Plus500 is one of the most effective, cost-conscious traders there are. Their profits are made only through the spread and no extra fee is charged; however, they also do not have additional features like auto trading, the Metatrader 4 and expert advisors. There are additional security measures if you trade with the UK version of Plus 500, through FCA (Financial Conduct Authority) regulation. Plus500 permits traders toaccess and place options on several markets, which is similar to the exchange-traded version except it is non-standardized. This implies the options from Plus500 are customizable and modified accordingly for your risk tolerance and strategy goals.

Below is a short video overview about the Plus500 trading platform, how to open an account and how to start trading in minutes.

Filed Under: Brokers reviews

An Introduction to CFDs

February 5, 2020 By speculativebubble Leave a Comment

CFD stands for contract for difference. This type of contract allows European traders and investors to gain and profit from the movement of price without having to own any underlying asset. The way it works is by calculating the movement of an asset, from trade entry to trade exit, by calculating the change in price without taking into consideration the underlying value of the asset.

A deal between a client and a trader can be done, without using any stock, forex, commodity or futures exchange. CFD trading is extremely popular because of the benefits gained by the broker as well as the client. According to this article on business24-7.ae CFD trading is one of the most recommendable investments for beginners.

How a CFD Works

Anything explained with an example is always easier to understand. So, to fully grasp the workings of CFD, imagine a scenario where the ask price of the stock is $30.05 and the trader purchases 100 shares.

Now, the cost of this dealing is around $3,005 excluding the payment for commission and fees. Normally, a traditional broker requires a minimum of 50% of the margin account which is $1,502.50. However, a CDF broker deals with a 5% margin account which is $150.25.

When starting, a CFD trade generally appears to have a loss equal to the spread at the given period of the process. To hit breakeven price, it needs to gain back the spread value of, say 5 cents. If you owned the stock prior to starting with the trade, you would have seen a gain of 5 cent on your account, but you would have paid a certain amount as commission as well as paying a bigger capital outlay.

In a traditional account, if the stock’s bid price goes up to $30.25, the trader can easily make a profit by selling it for $50 which is $50/$1,502.50 = 3.32%. The CFD price might have to lower to $30.22 when the national exchange reaches the bid price.

In this case, the CFD profit is lower and the broker has to exit at the bid value. The spread value will also be larger than on the other normal financial markets. In this particular case, a CFD trader may earn an estimated $48 (i.e. $48/$150.25 = 32%) ROI.

In cases like these the CFD broker might want the trader to buy in at a higher price, say $30.07. The $47 to $48 profit made by the trader, is quite a steady net profit, while the higher profits the trader would have made, had he owned the stock from the get-go, doesn’t include commission fees.

The Advantages:

Higher Leverage

Compared to traditional trading, CFD trading is more advantageous and has higher leverage. Nowadays, the margin is in a range of 3% (30:1 leverage), up from a previous 2% margin, and could easily go up to 50% (2:1 leverage).

With lower margins comes less capital outlay for an investor, but also higher returns.  On the other hand, an increased leverage also means bigger losses.

Global Market Access from One Platform

In this digital era, you can trade from anywhere in the world, and at any time you so wish. CFD brokers utilize this effectively by selling products all over the globe 24×7. One of the most recommendable CFD broker is Plus500. You can find a full list of the best trading platforms on southafricatoday.net

No Shorting Rules or Borrowing Stock

A number of different markets have rules in regard to shorting. They might require an instrument to be bought before shorting or might have margin requirements before selling short or long. The majority of markets have forbidden shorting but in CFD there is no prevention of shorting since the trader does not own the assets.

Professional Execution with No Fees

Some of the orders offered by traditional brokers are the same as those offered by CFD brokers like stops, limits, If-Done and One-Cancels-The-Other orders. A couple of brokers earn money by offering guaranteed stops. At times they gain back the costs in other ways. Brokers would make money when a trader pays for a spread. In order to buy, a trader pays the ask price, and when selling they must pay the bid price. As you know, the spread varies depending on the underlying asset and there are also fixed spreads available.

No Day Trading Requirements

In order to day trade certain markets impose regulations, like requiring a certain amount for capital or set limitations on certain account by restricting the number of day trades. However, the CFD market do not impose these types of restrictions. Anyone can day trade if they so wish. To open an account, you can do so with as little as a $1,000, although it is better to start with either a $2,000 or $5,000 minimum limit.

Variety of Trading Opportunities

Currently brokers offer stock, currency, asset, index and commodity CFD’s, in order for players in different sectors to participate and trade.

The Disadvantages:

Traders Pay the Spread

Though CFDs offer an advantage in certain aspects compared to traditional markets, they have their share of drawbacks. For one, the fact that spreads are paid on entries and exits, prohibits traders from making profits with little movements in the spread value.

Another drawback is that the spread decreases winning trades when compared to the underlying security and will thus increase losses on the trade. Although compared to traditional markets, CFDs do not charge fees, commissions or set regulations, they still minimize the trader’s earnings through spread fees.

Weak Industry Regulation

The CFD industry is not regulated and thus credibility has to be earned on the broker’s longevity, reputation and his position financially. Therefore, it is very important to first do an investigation of the broker’s background before committing your money.

Risks

Regular monitoring is a must in CFD trading. There are risks and margins that you must maintain, because if you cannot cover reduced values, your broker might close your position. This is not a good position to find yourself in as you will have to cover the losses incurred.

The risk of making use of leverages exposes you to even greater losses. Although many CFD brokers offer stop loss limits, it doesn’t guarantee that you will not suffer losses, especially during sharp price movements or market closures.

The Bottom Line

CFD trading is beneficial, especially with lower margin requirements, no rules on shorting and day trading, little to almost no fees and easier entry to global markets. On the other hand, high leverages increase losses, and having to pay spreads when entering and exiting positions also increases cost, especially when there is no price movement.

Because of these the ESMA (European Securities and Markets Authority) placed restrictions on CFDs.

Filed Under: CFD trading

Forex Trading

January 31, 2020 By speculativebubble Leave a Comment

What Is Forex Trading And Why Should You Trade It?

Forex trading is not really that difficult to understand, but with so many tutorials and a lot of talk going around, many have a clear misunderstanding of what it is exactly. The daily transactions of the forex currency exchange stand at a massive $5.1 trillion dollars. This market has a trading value of more than the stock and debt market put together.

Do you struggle to understand what the forex market is? In this article we endeavour to strengthen your knowledge on the basics of forex trading in order for you to start dabbling in this lucrative money-making industry. According to business24-7 forex trading beginners are starting to trade with too less knowledge and experience and are loosing money in almost 88% of the time.

Forex trading is a lucrative industry for both entrepreneurs and diligent individuals. As said before, a whopping $5.1 trillion dollars is transacted on the forex market every day. There is no need for a formal education, employment interview or a fancy suit to be a forex trader. The topmost traders aren’t necessarily those that come from the foremost privileged families or backgrounds, in fact forex trading’s success lies in working hard and smart.

Forex trading is not a get rich quick scheme as so many are trying to portray it as. It truly does have a world of potential if played smart. You need to have the capability of finding out new ideas quickly. You also need to have a firm grasp on your emotions, something which is lacking within most individuals.

Before diving into it, let’s check out the most significant question about forex trading.

What is Forex Trading?

Forex trading is the world’s largest financial market. It trades currencies in the foreign exchange market and serves as a platform to buy and sell currencies, which includes converting one currency to another depending on the performance of the currency in a said period of time.

These currency conversions are expressed as a magnitude relation of 2 currency codes. For instance, if the GBP/USD is at 1.29, then purchasing the British pound – i.e. 1GBP – would be around 1.29 USD. It might be a bit confusing for beginners to know terminologies like FX and be able to properly track your bets, but with practice all confusion will clear.

When you purchase a currency pair, like the JPY/USD, you are betting that the JPY is going to increase in comparison to the USD. To predict these changes requires an analysis of news and events, called fundamental analysis, or on analysis of chart patterns, called technical analysis.

So, in the example above, if the analysis indicates that there is a rise in value of the Japanese Yen (JPY) in relation to the USD, then it would make sense to buy this currency pair while the price is still low and then make a profit selling it when the price rises.

Let’s look at another practical example. A forex trader purchases 100GBP at 1.3USD per GBP. If there is a rise in the value of the GBP/USD currency pair, and it is now 1.4USD per GBP, the profit on this trade would be ($1.4 – $1.3) X 100 = 10$. Thus, selling a 100GBP for 1.4USD (1.4USDX100= 140USD) will gain a profit of $10 since the initial price of 100GBP was 1.3USD per GBP.

With the securitization of the financial industry a vast universe of possibilities has opened up, making it possible for the modern trader to trade forex, futures, options, swaps, and forwards as well.

Why Trade Forex?

Forex trading is exciting but will make you feel slightly overwhelmed with the vast amount of knowledge coming your way. It is this sheer amount of information that makes almost 90% of traders give up before understanding what forex trading is. It is recommendable to read articles like this to get started faster and to not give up so fast.

If you are one of the 10% who believe they can make it, then here’s what you should be looking forward to:

  • Independence: When trading forex, you become a financially independent person. You don’t have to worry about performing redundant tasks for a boss or have to work with incompetent co-workers.
  • Endless Financial Possibilities: With a winning strategy, you will make immense financial gains. You can easily make huge profits by taking on money from investors and boost your earnings.
  • Remote Location: To trade forex you just need a laptop and an internet connection. You’ll be able to trade from any location in the world. It is location independent. It’s a known fact that movies can dramatize the whole forex experience, making people think that they need 3 or 4 monitors, but it is really not the case.
  • Challenged Intellectually: As a forex trader you need to constantly update your knowledge of financial markets. This might mean reading many books or taking on courses to enhance your skills.

Forex vs Stocks

You might be wondering why on earth you have to go through such a steep forex learning curve when you can just as well trade the stock markets. A market which is accessible far easier than the forex market and has some huge growing potential by investing in the weed stocks, gold stocks etc.  If you are eager to start trading stocks, according to this article by business24-7 you should first read and learn how to invest in stock market before investing any money.

And the answer is simply: the cost involved. FX brokers, unlike stockbrokers, do not charge data commissions, trading fees or regulatory fees. Instead fees or commissions are earned through spreads.

The spread is the price difference between how much the trader buys a currency pair for and how much they then sell it for.

For example. The spread for the GBP/USD is 1.2901 – 1.2905. This means that at a particular time the forex trader can purchase the GBP at 1.2905USD and can sell it for 1.2901USD. Thus, the broker make money by adding a tiny percentage or a tiny amount to the spread.

Also, stocks are mostly influenced by macroeconomics, currency exchanges, managerial teams and many more factors, while currencies are in majority influenced by macroeconomics.

Another huge advantage of the forex market is that it is not influenced by time, as the forex markets are open 24/7 Monday to Friday.

Final Thoughts

To be a successful forex trader, you must be diligent and dedicated, since traders in the top game believe perseverance, emotional control, and adaptability is a must. If you are still willing to carry out forex currency trading, rest assured that it can become a very fruitful business for you. No matter what, you will still gain a lot of knowledge in trading and learn to build your own investment strategy.

Filed Under: Forex trading

Binary Options

January 30, 2020 By speculativebubble Leave a Comment

What Is A Binary Option?

binary-option-picture

A binary option can best be described as a financial product where the investor stands to either receive a payout or completely lose their investment. They are a way to trade price fluctuations in a global market. The decision to either win or lose the money depends on whether the option expires while in the money.

What does Binary Options trading means? The term – in the money – refers to an option that has intrinsic value, when compared to the market price of its asset.

Binary options primarily depend on whether the proposition turns out to be a yes or a no. These options have an expiry time and date, and when they do expire a trader will make a profit if the price of its asset is on the right side of the strike price.

Binary options exercise automatically, where the gain or loss of a transaction is immediately debited or credited to the account of the trader upon expiration.

The Basics of Binary Options 

To better understand how binary options work, look at the following scenario:

A trader decides to trade binary options of a Company XYZ. He has to decide whether the share price of this company will be above or below $30 on the 31st of May, 2020, at 11:00AM. The trader decides whether the price will be higher or lower.

Should the trader have chosen yes, that the price will trade above $30 by trade expiration date and time, and he is willing to bet $200 on that, and should the price be above $30 on that date and time, he will receive a payout according to the agreed upon terms.

For example, if the payout is 75%, then the binary broker will credit the trader’s account with an amount of $150. If the price traded below $30 at that expiration time and date, then the trader would lose their $200 investment. You can read more about binary options on business24-7.ae

The Difference Between Binary And Vanilla Options

A vanilla option allows the trader to buy or sell an asset at a specified price before the option expires, whereas a normal European option only allows the trader to buy or sell the asset on the date of expiration.

A vanilla option will provide the trader with potential ownership of the asset.  Entering into these trades poses a fixed risk with profits varying according to how much the price of the underlying asset moves.

A binary option on the other hand does not provide the trader with the possibility of taking a position in the asset. These options have a fixed payout at expiration, with the risk limited to the amount invested. Unlike the vanilla option, the payout price or the loss incurred is not affected by movement in the asset.

Rather, the gain or loss in the trade depends on the position the asset is in on expiration. Whether it is on the correct side of the strike price. It is possible to close the binary option before it expires, however, this will reduce the amount of payout received should the option be in the money.

Binary Options and Regulation

Binary options are traded on Securities and Exchange Commission regulated platforms. With much of the trading occurring outside the United States, it may not all be totally regulated.

Unlike regulated binary options brokers, unregulated brokers do not have to meet a particular standard of quality. Thus, the potential for fraud is something a trader has to be aware of when dealing with these brokers.

Vanilla options are traded on regulated US exchanges and are thus subjected to more regulated oversight.

Real World Binary Options Example

A well-known regulated binary options exchange in the US is Nadex. Their binary options work on an exit before expiry option and a yes or no proposition. The price the binary option enters at will determine the potential profit or loss. When options enter in at $100, there is a possibility for expiration payout to be either $100 or $0.

Let’s assume Nestle stock trades at a market price of $56,65. We also assume that the binary option for this stock has a strike price of $60 and expires the next day at 3pm. The investor can buy the option at $30. Should the price of the stock expires above $60, it expires in the money and it is worth $100. Thus, the investor will make ($100-$30), which is $70.

And if the option expires out of the money, at a price below $60, the investor would lose the $30 they started with. Thus, the profit made or loss incurred always amount up to $100 with a Nadex option.

The only way to make a significant investment is to increase the amount of options traded. For instance, increasing the options to four, would increase the risk to $120 ($30×4), but the profit potential to $280 ($70×4).

Other non-Nadex binary exchanges operate in a similar fashion, although they might not necessarily be regulated the US, might often not be exited before they expire, in most cases have a fixed percentage for payouts, and might not trade in increments of $100.

Filed Under: Options

Best Brokers

December 27, 2019 By speculativebubble Leave a Comment

There are so many out there, depending on your current situation and how active you trade determines which one is right for you. We have currently reviewed:

  • IQ Option review
  • Plus500 review
  • eToro Review

Things You Need to Consider When Choosing a Broker

eToro, IQ Option, Plus500, etc.

On a typical trading day they are all adequate. But the question is:

Which one will perform best on the busy trading days?

What would happen if the Dow dropped one or even 2,000 points?

Every investor out there would be logging on trying to execute a trade. Which one could handle the most traffic? That should be a primary concern.

Filed Under: Best Brokers

Stock Trading

December 27, 2019 By speculativebubble Leave a Comment

This is what everyone is looking for: stock tips. Also some of the standard ‘Stock Market 101’ type info.

What are the Basic Terms for Stock Trading?

Misc. Stock Market Related Definitions

By the way you can find more in our glossary.


The January effect – Historical tendency for stock prices to increase in January more than any other month

Market Order – Buy or sell for whatever you can get for it ASAP.

Stop Order – A Stop Order is when you tell the broker to trade your stock once it reaches a certain price (above or below what you bought it at).  Once it hits that price, it turns into a “market order” and gets executed at whatever the going rate is.

Limit Order – A Limit Order is where you tell the broker to ONLY execute at a specific price (above or below).  Example – buy 100 shares at no more than 20.  Or sell 100 for no less than 20.

NAV – Net Asset Value – Current value of a mutual fund

CAPM – Capital Asset Pricing Model – Values various investments based on their risk vs. return characteristics

Round Lot – Stocks are sold in lots of 100.

Odd Lot – When stocks are sold in quantities less than 100

Specific risk – The risk associated with buying only one stock.

Penny stocks – Stocks that are priced at under $5.00 each share and can even be priced under $1.00.

The greater fool theory – Buying something for no other reason than the belief that you will be able to sell it to some other sucker for a higher price

Long position – When you buy a stock with the hope that it will increase in price.

Short Position – When you sell a stock (that is borrowed) with the hope that it will decrease in price (so that you can buy them cheaper to replace the stock you borrowed).  Short sellers think the price will decrease.

Markets – are self-regulating

SEC – Securities and Exchange Commision – enforcement agency – insider transactions – try to ensure a fair market. (Officers, directors, key employees cannot buy or sell share of the company without filling a report)

Insider transactions – Officers, directors, key employees cannot buy or sell share of the company without filling a report with the SEC.

Penny stocks – brokers selling small companies (usually non-NYSE members)

Full service broker – has polished stuff on everything – usually cost approximately 2% of transaction (broker gets 1/3 of that)

Discount broker – no advice or recommendations

Beta – tends to show how a stock will move relative to the market.  If beta is greater then 1, it will tend to move more than the market (because of specific risk)

Alpha – the characteristic line showing the specific risk if alpha is zero then no specific risk.

Bull market – when asset prices are rising

Bear market – when asset prices are falling

Inflation – not good for stocks or bonds

Long position – Buying stocks is said to be long (expect increase in stock’s price)

Short position – Short selling –  Selling a borrowed stock. Short selling corrects overpriced stocks.  (Going short is anticipating the market decreasing)

Margin – borrowing from broker (Borrow after $25000 is spent @ 11%, maximum = $50,000)  Margin deposit can be T-bills, cash, or non-margin stocks

Squeeze on the shorts – people trying to cover their short interest causes prices to increase.

The Basic Stock Trading Formulas

used to date:


PE Ratio = Price / Earnings

Return on equity they earn ______ on every $ of equity = earnings per share / stockholders equity

DPS = dividends per share (yearly)

Dividend yield = dividends per share / stock price

Dividend pay out ratio = dividends per share / earnings per share

Total return = (ending price + div. income received / beginning price) – 1

Earnings per share = current (last 12 months)

Earnings per share = earnings available to shareholders / # shares outstanding

Earnings per share growth = return on equity x (1-Pay out ratio)

Pay out ratio =  dividends per share / earnings per share

Net working capital = current assets – current liabilities

Profit margin = net income / net sales

Turn over = net sales / total assets

Leverage = total assets / current earnings

For every sales dollar, they earn___________ = net income / net sales

For every dollar they invested they got ________ worth of sales = net sales / total assets

For every $1 they have ______ working for them = Total assets / shareholders equity –

Internal growth or implied sustainable growth = return on equity  x (1 – pay out ratio)

NAV per share, net asset value per share = total value of portfolio / number of shares outstanding in fund

Retention ratio = (1- pay out ratio)

Filed Under: Stock Trading

Day Trading

December 27, 2019 By speculativebubble Leave a Comment

Here is the section for those of you that are trying to time the market. Whether timing a purchase, a sale, or daytrading. This is the place to talk about short term swings in the market.

Day Trading Ranges:

Securities can sometimes get stuck in a rut; trading in the same range for long periods of time.

As a stock increases in price, it approaches what the technical analysts call a resistance level.

This is the uppermost bound of the established trading range for that stock.

When this happens, a lot of investors decide to sell the stock; realizing that it will probably not increase beyond its recent high.

This is called profit taking. Profit taking causes sales pressure, which in turn causes prices to go back down simply because there are more sellers than buyers.

If a stock is declining in price, once it approaches its support level (the lower bound) a large part of the market will view the stock as sale priced at a good deal.

This causes the stock price to increase merely because of the buying pressure.

This contributes to a self-fulfilling trading range for each security out there.

This is why the media always makes a big deal about having a new high for the NASDAQ or when the Dow Jones Industrial Average broke 10,000.

Once something breaks out of its trading range – it might continue on in trend to infinity – until it establishes a new range to trade in.

When choosing stocks, notice what the previous 52-week high and low is. Is it in the lower part of its range or the upper?

Did a lot of the shareholders pay more than what it is currently selling for?

This may contribute to additional profit taking on each successive advance with those high-paying investors trying to get their money back and just break even.

Filed Under: Day Trading

Binary Options

December 27, 2019 By speculativebubble Leave a Comment

Options – Although expensive they are great for locking in profits. They are also great for speculation. To date we only have the basic information in here for options and futures; check back as other visitors post their knowledge about derivative securities

Options are relatively new (4/26/73)

Options are very popular now

All stock option contracts are for 100 shares.  If the option is selling for 4, total outlay for one contract would be $400 + commission.

If your goal is speculation with a small amount of money (using leverage) – buy stock options.

Don’t have to exercise the stock option, just settle for the cash difference.  95% of stock options, people won’t exercise them

All options –expire on the 3rd Saturday of the month (which is preceded by the 3rd Friday).

You can buy stock options on most of the large stocks

Filed Under: Options

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