Saturday, January 21, 2017

How to use leverage wisely

What is leverage?

Leverage is the financial term that refers to the relationship between equity and credit that is invested in an operation. Through leverage, the investor deposits an amount as collateral and your broker offers you a number of borrowed funds so you can open much larger positions than you could do with your capital alone.

Therefore, when doing online trading how to use leverage in forex you can invest in large volumes with a much lower required amount of money. It is one of the most important tools both in the Forex market and when investing with CFDs, ... since it is practically impossible to obtain significant profits without it, especially when you do not have a significant capital.

The level of leverage is expressed by two numerical quantities surpassed by two points. A fairly typical level of leverage that you can find today in many online brokers for Forex can be 1: 200, ie for every euro you bring as capital you can trade in the market with 200 euros. In this case the percentage of own capital required corresponds only to 0.5% of the operation. If we have a leverage of 1: 400 the percentage of equity required is 0.25%, whereas in a leverage of 1:20 it is 5%, but also the profitability is considerably reduced.

Is leverage your best ally to make profits when trading?

Given the above, leverage can seem like a great opportunity to make profits and a priori the more leverage you have in your reach better than better. But you have to keep in mind that it really is a double-edged sword: High leverage can allow you to obtain significant profits if everything goes forward in your favor (since you are trading in the market with a much higher amount than you deposit and for Both the profits that you are going to collect are those of the total of the operation and not those generated only with your capital), but on the other hand, this capital increase also increases the risks considerably and exposes you to greater losses if you do not hit and the Operations are advancing against you.

The level of risk you assume is greater the more leverage you use since the operation you open is also larger. When using leverage, even if the broker offers you a loan amount, any position that goes into losses you must be able to "endorse" it with your own capital that you have deposited in your trading account. Brokers usually apply security mechanisms to prevent your account from being left with a negative balance and will automatically close your open positions if the available capital is insufficient to guarantee the transactions in losses (this is known as Margin Call or margin call) . This is okay so you do not incur a debt beyond the amount of money you have deposited in your account but you will still have lost all your capital and that is what you should try to avoid.

How to use leverage wisely?

It is very important that you understand the opportunities and also the risks that the leverage offers. It is very difficult to get a reasonable profit without leverage but you must be prudent and use it head. If you are a beginner, do not be seduced by aggressive levels of leverage offered by many brokers as they can lead to greater losses. Act with caution and postpone the decision to increase or not leverage to when you have more knowledge and experience.

Leverage management should play a key role in your risk management strategy. You can more easily withstand any movement against if the operations you open are small and the capital you have available is sufficient that if you overhand and open a positions too large in which the minimum movement of the price against you can make you Capital to disappear completely. Keep a cautious approach and the attractiveness of the benefits does not make you lose sight of reality.

Most brokers establish a maximum level of leverage that will depend on the investment instrument of your choice (Forex currencies, stocks, indices, commodities, ...). In Europe today there are online brokers that offer maximum leverage levels of 1: 1000 or even 1: 2000. In the United States, the CFTC (Commodities Futures Trading Commission) regulation prevents the use of leverage greater than 1:50. Many brokers allow you to choose the level that you think is more convenient and change it according to your needs. In this comparative table: Broker forex teregulasi with Greater Leverage you can see the list of brokers we have analyzed and in the column "Details" you can see the maximum level of leverage offered by each one of them. You can visit their respective websites for more information and in most cases you can test your Free Demo Accounts and check the levels of leverage you have available in your trading platform for each financial instrument.

Sunday, January 8, 2017

What are the advantages of doing Forex trading?

The cara belajar forex market is the largest financial market in the world and attracts more and more investors from all over the world. In this article we will analyze what are the main reasons for this growth and what are the advantages that you can take advantage of by doing Forex trading:

- Schedules

The schedule of the Forex market is one of its main attractions. As the phrase in the famous movie Wall Street says: "Money never sleeps," in Forex is fully realized as it is an active market 24 hours a day where there are always moves.

Due to the different time zones, whether it is 11am or 11pm, somewhere in the world, there are always buyers and sellers negotiating with currency pairs. (See article Best Forex Pairs to Invest in Forex).

While it is true, there are moments of greater movement coinciding with the 3 main trading sessions (Europe, Asia and the United States) and others with less that can be less advisable like the weekends. (See article Time to invest in Forex).

The flexibility of Forex schedules allows you to perfectly combine both your learning and your work as a trader with your current professional activity and do not need a dedication. This is more complicated when investing in stocks, indexes, ... since the sessions, for most people, usually coincide with their working day.

The fact that there are no session closures also results in gaps or price gaps being avoided at the next opening in the event of significant news in the hours that the market is closed.

- Liquidity

Forex is also the most liquid financial market in which more than 5 trillion dollars is traded daily. It is a market in strong growth in which it is very easy to enter and leave at any moment.

This does not always happen in markets with lower liquidity, such as in the case of stocks. At certain times, you may want to sell a stock and find no buyer or vice versa. In Forex there are always buyers and sellers to act as counterparts to your trades, especially in the major currency pairs.

- Transparency and Security

Manipulation in a market as large as that of foreign exchange is almost impossible.
Any investor, however large, can not significantly influence the price of a currency. Even the relevant decisions of a central bank (which occur infrequently) can affect a currency in a timely manner but after a time it tends to stabilize according to the direction taken by the majority of investors.

On the contrary, in the case of company stock prices may become adulterated or "inflated" without the knowledge of the investors, company balance sheets that give an image of the situation of the positive company may have been manipulated or "made up" "... From one moment to another the real situation is discovered and the stock price can sink, shareholders panic and everyone wants to sell without anyone wanting to buy so that the shares you have may become worthless nothing.

In Forex there is no systemic risk nor a currency disappears from one day to another, that is why it is one of the safest markets in the world.

- Information to make trading decisions

In the case of investing in shares of a company you must be aware of and follow numerous factors: company balance sheets, presentation of results, changes in management team, situation of competing companies, important news in the sector, changes in strategy The company, important business operations achieved or failed, capital increases, entry or exit of important shareholders, ...

Much information is needed to make proper trading decisions and the worst thing is that this information does not reach all investors at the same time on equal terms. In many cases there is the exchange of privileged information between managers, main shareholders, ... who know the situation and important changes that affect the company before the rest.

On the other hand, in the Forex currency market virtually all the news reaches all at the same time, whether big investors, financial institutions, brokers to retail investors. The information you must follow to make your trading decisions about one or several currency pairs is much smaller.

Having a good economic calendar on hand is the best option to keep abreast of this type of news. We recommend that you focus especially on the most relevant ones as there are others throughout the day that will hardly have an impact on prices.

- Opportunities for profit

Although a certain currency is down, there are always opportunities to obtain profits in other currencies or in the same currency trading in the opposite direction.

In Forex you can make profits whether the price of a currency pair goes up or down. If you think the price is going up you can open a purchase position to close it later with a sale (go in long) but if you think the price is going down you can open a sale position to close it later with a purchase in short).

Buy cheap and sell expensive by going long or sell expensive and buy cheap by going short is the goal of the millions of participants in the Forex market. You have many currency pairs in which you can do trading and if you strive to learn and are disciplined you can get significant benefits in the currency market.

- Low Cost

Starting to invest in the Forex market does not require a high capital. You will need to open an account with an online broker who will act as an intermediary in the transactions you carry out. Today most brokers do not demand high initial deposits to open a trading account. You can take a look at this comparative table of brokers and as you can see there are asking for 100 € / 100 $ or even up to 1 $ to start investing.

Many brokers even offer welcome bonuses that increase your account balance by a certain percentage depending on the initial deposit you make: Brokers with Bonuses per Deposit

The Forex market is one of the financial markets with lower cost per operation. Most brokers apply their commissions mainly through a spread, the difference between the purchase price and the sale price. Being a market with a great liquidity this spread tends to be narrowed by supply and demand. Even the larger trading pairs have much lower spreads than less-traded or exotic pairs.

In addition you have a higher leverage for the foreign exchange market than for example that usually offered in shares. This way you can open a position with much more money than you have in your trading account and providing only a small part of capital as collateral. This allows you to maximize your profits but also requires caution as your level of risk also increases in the same proportion.

- Easy to learn and operate

Another great advantage of the Forex market is that you can learn and operate from anywhere in the world simply with an internet connection and a computer, a tablet or a mobile phone. The flexibility is total. That's why this market is so attractive to retail traders and growing day by day.

On the Internet you can find a lot of information to learn to invest, investment strategies, training material, ... although I anticipate that the most important thing is practice. And the best way to practice is to choose a serious and professional broker, which is regulated by some demanding body, and open a demo account that will allow you to perform test operations with the same conditions as a real account but without jeopardizing your money.

The brokers that we consider reliable and that we can recommend you currently are those with whom we have opened a trading account, deposited funds, performed operations and withdraw the money without problems and are the ones that you can find in our section of broker forex yang memberikan modal gratis.

Thursday, January 5, 2017

Introduction to Forex Trading Online

Forex is the world's largest and liquid financial market. Many consider Forex trading online as the best home based business they can ever venture into. Although regular people have had the opportunity to take part in for-profit currency trading (in the same way that banks and large corporations do) since 1998, it is only now becoming a topic to talk about at parties, events Business and other social gatherings.

Even though it has been a badly kept secret, more and more investors are turning to the totally electronic world of Forex trading to gain numerous advantages and benefits.

But, still, whenever something seems new to us or just becoming a part of social conversation or news articles, we must overcome misconceptions and the mind should be open to start with the right information.

Throughout this article I am going to give you some not too detailed information about the Forex market (FX).

As a successful trader said, trading on Forex is like picking up money from the floor. Not trading on Forex is like leaving the money there for another person to pick it up. Others say that trading with currencies is like having an ATM on your own computer.

Here's an explanation of what Forex is and how traders enjoy FOREX and profit:

The Forex market, also known as Forex, or FX, is the spot market for currency as it has the highest volume.

But, do not confuse FX with the futures exchange, where you buy contracts established between two parties to buy or sell a certain amount of a currency at a price set at a future date.

Investing in Forex is less risky than investing in futures contracts. Investing in futures can lead to big losses.

So, you are probably asking where is ... or ... how to access the foreign exchange market?

The answer is: The Forex market is not centralized in any stock market, as in the stock and futures markets. The forex market is considered an over-the-counter market (OTC) or 'Interbank' market, because the market is executed electronically, within a network of banks, continuously over a 24-hour period.

If this is the first time you have heard of the fully electronic market, then this may sound intriguing.

Here we talk about what is traded in the Forex Market (Forex):

Essentially, just like the big banks that use the FX market to hedge against the fluctuations of exchange rates between different currencies, both an FX trader is doing the exchange of one currency for another at the same time. So, at present, they are operating electronically with a currency pair and the exchange rate as a currency price is set.

In other words, the exchange rate between two currencies allows the ratio between the value of one and the other.

For example:

If the EUR / USD exchange rate is 1.2850 it means that we must deliver $ 1.2850 to get one euro. The first currency is the base currency (in this example EUR) and the second is the currency quoted (/ USD).

The Forex is able to move around 1.5 trillion dollars a day - it is 30 times bigger than the combined volume of all US stock markets. This means that each of the 1,498,574 specialized traders could take 1 million Of dollars from the forex market every day and Forex would still have more money than the New York Stock Exchange every day.

Forex plays a vital role in the world economy and there will always be a tremendous need for currency exchange. International trade increases as technology and communication increase. While there is an international trade, there will be a foreign exchange market. The foreign exchange market has to exist so that a country like Japan can sell products in the United States and be able to receive Japanese yen in exchange for US dollars.

Many traders who use the right trading techniques / tactics that allow them to benefit immensely can make a lot of money in Forex. About 5% of daily turnover is from banks, companies and governments that buy or sell goods and services in a foreign country or should convert profits made into foreign currencies in their local currency. The other 95% are trading for their own benefit, or speculation.