Trading

Trading Financials

TRADING WORLD MARKETS

Don't try to outsmart the market, respect the unpredictability of financial events, control your risk, and diversify your portfolio all the times.

 

1. The FOReign EXchange Market

The Forex is a global market where one currency is exchanged for another. The Forex market has no specific geographic location as transactions are executed through the electronic network of banks. The FOREX market operates 24 hours and 5 days a week and has a daily turnover of 4-5 trillion US dollars.

The basic distribution of daily volumes:

(1) FX SPOT TRADING

Market Size: 1.5 trillion US dollars daily transactions

(2) FORWARD CONTRACTS

Market Size: 480 billion US dollars daily transactions

(3) SWAPs CONTRACTS (Forex Exchange SWAPs & Currency SWAPs)

Market Size: 1.8 trillion US dollars daily transactions

(4) CURRENCY FUTURES & OPTIONS CONTRACTS

Market Size: 210 billion US dollars daily transactions

ECN/STP Forex Brokers

Forex brokers are firms that offer their clients access to the Foreign Exchange market. There are two main categories of brokers:

  • ECN/STP Brokers (No-Dealing-Desk)
  • Market Makers (Dealing-Desk firms)

» More about Forex Brokers | » Trading Platforms | » Forex Trading Books

Automated Forex Trading

Automated trading combines computer software and hardware in order to generate non-stop trading activity, without human intervention. An automated Forex trading system is taking into consideration key market data, such as price and volume, to recognize and trade short-term trends. An automated system can analyze the dynamics of demand/supply, and by comparing them to historical price behavior, can decide what and when to trade.

» Automated Forex Trading Strategies | » Forex Expert Advisors (EAs)

► More about the Foreign Exchange Market (FOREX)

 

 

2. Trading Stock-Markets

Stock investing means gathering fundamental information and choosing stocks by analyzing them. Equity traders have access to thousands of stocks and indices from all around the globe.

Fundamental Analysis

The main goal of a fundamentalist is to trace financial securities that are priced below their fair market value. Fundamental analysis aims to estimate the fair value but also to identify and measure the risk of each investment decision. Risk identification is essential for effectively managing your portfolio. It is all about Risk/Reward.

These are the two main goals of fundamental analysis:

(1) Determine the Fair Value of financial securities (profit-potential)

(2) Identify and measure risk (loss-potential)

» Find out the Basics of Fundamental Analysis

Financial Ratios

Usually, financial ratios are used as a tool for comparing different companies and industries in several aspects. These financial aspects include profitability, dividends paid, book value and many others. In the case of a company, a ratio evaluation is based on a current share price or in the overall market value (capitalization).

» More on Financial Ratios

Investment Valuation Methods

Been able to evaluate real value is very important towards making profitable stock-market investment decisions. These are the five most important stock evaluation methods:

1. Revenue Valuation | 2. Earnings Valuation | 3. Cash-Flow Valuation | 4. Equity Valuation | 5. Empirical-based Valuation

» More on Investment Valuation

The Dow Jones Industrial Average

The Dow Jones Industrial Average (DJIA) is one of the most important indices in the US and in the whole world. Dow Industrial was introduced in 1896 by Charles Dow. The Dow Industrial was originally used to measure the stock prices of some the largest US industrial companies but later expanded its composition to include companies from more industries. Over the years Dow Jones Industrial has proved to be a significant indicator of global political and economical upcoming events.

» The Dow Jones Industrial Average | » Stock-Trading Books

► More about the Basics of Equity Trading

 

3. Trading Commodities

Commodity trading may prove very profitable for those who can recognize and follow the long-term commodity cycles.

The most important commodity assets are Oil and Gold.

Trading Oil

Historically, the price of oil moves in a wide price range from 30 to 150 U.S. dollars per barrel. The capital leverage taking place on the derivative markets gives a good explanation of the excessive short-term fluctuations.

Including:

-Historical Oil Price

-International Oil Types

-Oil price determinants

-Alternative methods to trade Oil

» More on Oil Trading

Historical View of the Price of Gold

The total amount of available gold in the world today is about 156,000 tons. Each year only 2,500 tons are mined from which the 2,000 tons are absorbed by the jewelry industry and the rest 500 tons are used as investment gold.

Including:

-Looking at the historical fluctuations of the Gold Price

-Gold Rally during the 70s

-Agreements and key systems to control the price of gold until 1971

-Gold prices during the period 1257-1945 (British Official Price)

-Countries with the highest Gold Reserves

» The history of the Price of Gold | » Commodity-Trading Books

► More About Commodity Trading

 

FXCC Forex Trading

 

4. Bitcoin Markets

Bitcoin, invented in 2008 by Satoshi Nakomoto, is the first and the most popular digital currency worldwide. Bitcoin is an open-source decentralized currency allowing internet users to shop online or send money around the world. Bitcoin doesn't require credit card or a bank account and can be bought, held, or sold 100% electronically.

► Compare Bitcoin Exchanges | ► The Bitcoin Basics

 

5. Contracts for Difference –CFDs

A CFD contract exchanges the difference between the entry price and exit price of a particular financial asset. A CFD may be used for speculating stocks, stock indices, currencies, commodities or even other financial assets (volatility, inflation, etc) and consists of two prices, the price at the time that is opened, and the price at the time it is closed. If the underlying financial asset rises in price, the buyer of the contract is paid from the issuer of the contract.

Underlying Financial Assets of CFD Contracts:

  • Forex Currencies (Major, Minor, and Exotic pairs)

  • Cryptocurrencies (Bitcoin and Altcoins)
  • Stocks & Indices (thousands of stocks from all over the world)

  • Gold & Silver (against USD or Euro), Platinum, Copper and other industrial metals

  • Wheat, Sugar, Coffee, and other soft-commodities

  • Energies (Crude, Brent, Natural Gas, Gasoline, and Carbon)

The CFDs do not have a specific expiry date like for example options contracts -CFDs are renewed at the close of each trading day, and depending on the trader decision, they are rolled forward or abandoned.

► Compare CFD Brokers | ► Compare Trade Signal Providers

Trading World Markets

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TradingCenter provides essential information and tools for learning and trading the Global Financial Markets. TradingCenter helps investors to improve their skills and their level of understanding regarding core mechanisms of the trading process.

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