Showing posts with label Knowledge - Investing Basics. Show all posts
Showing posts with label Knowledge - Investing Basics. Show all posts
Sunday, August 17, 2014
Sunday, June 22, 2014
Monday, May 5, 2014
Forex Market Hours Info-Graphic
Orignal Post :- Forex Useful
FOREX MARKET HOURS
The Forex markets are effectively open 24 Hours a day 5 Days a week. However, each region has its own “official” hours as follows (all times are UK Local time):
• London – Opens at 08:00 and closes at 17:00
• New York – Opens at 13:00 and closes at 22:00
• Sydney – Opens at 22:00 and closes at 07:00
• Tokyo – Opens at 00:00 and closes at 09:00
• New York – Opens at 13:00 and closes at 22:00
• Sydney – Opens at 22:00 and closes at 07:00
• Tokyo – Opens at 00:00 and closes at 09:00
The term “official” is used because there are no strict limits as to when an institution can or cannot trade any specific currency. However, the above “official” times can be used as a fairly accurate set of guidelines.
During these “official” hours trading in certain Key currencies is at its highest, for example:
• The British Pound (GBP) and the Euro (EUR) are most heavily traded during the London session
• The US Dollar (USD) is most heavily traded during the New York session
• The Aussie Dollar (AUD) is most heavily traded during the Sydney session
• The Japanese Yen (JPY) is most heavily traded during the Tokyo session
• The US Dollar (USD) is most heavily traded during the New York session
• The Aussie Dollar (AUD) is most heavily traded during the Sydney session
• The Japanese Yen (JPY) is most heavily traded during the Tokyo session
13:00 – 17:00 is considered “Prime time” as this is when 3 of the most popular currencies (USD, EUR & GBP) are all being actively traded.
It is also important to pay particular attention during the 1st hour of each session as the markets are more volatile for the currencies in their respective regions.
Types Of Trader Info-Graphic
Orignal Post :- Forex Useful
Types Of Trader
There are a number of different types of Trader and the category they fall into is largely determined by the chart time frame they trade.
Scalper
Trades the Tick or 1 Minute chart and tries to catch quick moves in the market. In and out in less than an hour, sometimes minutes. Trades a few times an hour, these guys enjoy lots of action.
Day Trader
Trades the 5 – 15 Minute chart and tries to catch the market move of the day. In and out in the same day and usually less than a couple of hours. Trades a few times a day, these guys enjoy lots of screen time.
Swing Trader
Trades the 1 Hour or 4 Hour chart, also known as Trend trading. In and out in a few weeks but some trades can run for months. Trades a few times a week, these guys are quite relaxed.
Position Trader
Trades the Daily and Weekly charts and takes a long term perspective. Positions are often left to run for months, sometimes years. Trades a few times a month, these guys also observe the fundamentals.
Summary
If you enjoy lots of action become a Scalper. If you enjoy lots of screen time then it’s Day Trading for you. For a more relaxed approach try Swing trading and if you are into fundamentals Long term Position Trading will be your choice.
Thursday, July 4, 2013
What is the meaning of ARBITRAGE ?
The simultaneous purchase and sale of similar commodities in different markets to take advantage of price discrepancy.
What does it mean?
Arbitrage involves buying an asset in one market where the price is low, and at the same time selling the same asset in another market where the price is higher. The arbitrageur aims to take advantage of price discrepancies between the two markets with the view of profiting from this so-called risk-free series of transactions.
What does it mean?
Arbitrage involves buying an asset in one market where the price is low, and at the same time selling the same asset in another market where the price is higher. The arbitrageur aims to take advantage of price discrepancies between the two markets with the view of profiting from this so-called risk-free series of transactions.
What is the meaning of HEDGING ?
Hedging involves offsetting an exposure to the price risk of one market by taking out an equal but opposite position in another market.
What does it mean?
Hedging is a sophisticated strategy regularly employed by the big end of town such as professional traders and fund managers, particularly hedge fund operators. Many say that CFDs are one of the best hedging tools around, which means that hedging strategies are now available to ordinary investors as well.
Hedging your bets can feel a bit like you’re trading against yourself because in a sense you are. You are simply aiming to reduce your risk.
Let’s say that you hold a sizeable share portfolio consisting of BHP Billiton, Rio Tinto, a couple of the big banks and so on. Heightened sharemarket volatility and bad news emanating out of the US is making you nervous. Rather than panicking, and calling your stockbroker to sell you out of the lot (remember, there are tax consequences to deal with when you sell), you could short sell a CFD over the index, such as the S&P/ASX 200 instead. This means that if the overall market does fall, you will make the equivalent gains on your CFD trade. If the market continues to go up, well losses on the CFD trade are compensated by gains in your share portfolio.
What does it mean?
Hedging is a sophisticated strategy regularly employed by the big end of town such as professional traders and fund managers, particularly hedge fund operators. Many say that CFDs are one of the best hedging tools around, which means that hedging strategies are now available to ordinary investors as well.
Hedging your bets can feel a bit like you’re trading against yourself because in a sense you are. You are simply aiming to reduce your risk.
Let’s say that you hold a sizeable share portfolio consisting of BHP Billiton, Rio Tinto, a couple of the big banks and so on. Heightened sharemarket volatility and bad news emanating out of the US is making you nervous. Rather than panicking, and calling your stockbroker to sell you out of the lot (remember, there are tax consequences to deal with when you sell), you could short sell a CFD over the index, such as the S&P/ASX 200 instead. This means that if the overall market does fall, you will make the equivalent gains on your CFD trade. If the market continues to go up, well losses on the CFD trade are compensated by gains in your share portfolio.
What is the meaning of LEVERAGING ?
Investing with borrowed money to boost potential gains at the risk of greater losses.
What does it mean?
If you have a spare $10,000 and invest it in shares which go up 10 per cent then you will have made $1,000. If instead you use not only your own $10,000 but also $40,000 of someone else's money then you can buy shares costing $50,000 and if they go up by the same 10 per cent then you will have made $5,000 instead of just $1,000.
This is known as "leverage". It can be achieved in various different ways, all of which have some advantages and some disadvantages. Popular ways to gain leverage are margin lending, instalment warrants and Contracts for Difference (CFDs).
Leverage is a two-edged sword. In the example above, if the shares go down 10 per cent, then you will have lost $1,000 using just own money but $5,000 if you use $40,000 of someone else's money as well.
Monday, June 3, 2013
Commodities Futures Market - Hedgers And Speculators.
A popular way to invest in commodities is through a futures contract, which is an agreement to buy or sell, in the future, a specific quantity of a commodity at a specific price. Futures are available on commodities (e.g. grain, oil, metals, etc.)
Most of the participants in the futures markets are Commercial or Institutional traders of the commodities they trade. These Hedgers may use the commodity markets to take a position that will reduce the risk of financial loss due to a change in price. Other participants, mainly individuals, are Speculators who hope to profit from changes in the price of the futures contract. Speculators typically close out their positions before the contract is due and never take actual delivery of the commodity (e.g. grain, oil, etc.) itself.
Investing in a futures contract will require you to open up a new brokerage account, if you do not have a broker that also trades futures, and to fill out a form acknowledging that you understand the risks associated with futures trading.
Each commodity contract requires a different minimum deposit, depending on the broker, and the value of your account will increase or decrease with the value of the contract. If the value of the contract goes down, you will be subject to a margin call and will be required to place more money into your account to keep the position open. Due to the huge amounts of leverage, small price movements can mean huge returns or losses, and a futures account can be wiped out or doubled in a matter of minutes.
Most futures contracts will also have options associated with them. Options on futures contracts still allow you to invest in the futures contract, but limit your loss to the cost of the option. Options are derivatives and usually do not move point-for-point with the futures contract.
Most of the participants in the futures markets are Commercial or Institutional traders of the commodities they trade. These Hedgers may use the commodity markets to take a position that will reduce the risk of financial loss due to a change in price. Other participants, mainly individuals, are Speculators who hope to profit from changes in the price of the futures contract. Speculators typically close out their positions before the contract is due and never take actual delivery of the commodity (e.g. grain, oil, etc.) itself.
Investing in a futures contract will require you to open up a new brokerage account, if you do not have a broker that also trades futures, and to fill out a form acknowledging that you understand the risks associated with futures trading.
Each commodity contract requires a different minimum deposit, depending on the broker, and the value of your account will increase or decrease with the value of the contract. If the value of the contract goes down, you will be subject to a margin call and will be required to place more money into your account to keep the position open. Due to the huge amounts of leverage, small price movements can mean huge returns or losses, and a futures account can be wiped out or doubled in a matter of minutes.
Most futures contracts will also have options associated with them. Options on futures contracts still allow you to invest in the futures contract, but limit your loss to the cost of the option. Options are derivatives and usually do not move point-for-point with the futures contract.
Agriculture, Energy And Metals Commodities. What Are They ?
Commodities are objects that come out of the Earth such as Grains, Metals and Oil.
Since there are so many, they are grouped in three major categories: Agriculture, Energy and Metals.
Agricultural commodities include:
- Things you drink, such as sugar, cocoa, coffee and orange juice. These are known as the soft markets.
- Grains, such as wheat, soybeans, soybean oil, rice, oats and corn.
- Animals that become food, such as live cattle and pork (called lean hogs).
- Things you wouldn't eat, such as cotton and lumber.
The Metals includes mined commodities, such as Gold, Copper, Silver and Platinum.
People can buy and sell commodities based on speculation. For the more experienced investor, this venue of investing can offer huge returns with very little initial investment. The risks are tremendous and not at all recommended for the inexperienced investor, but some think the outcome more than makes up for the for potential loss.
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