Switching from a demo to a live account is a relatively straightforward process. Depending on your broker, it could be as simple as clicking on a webpage a couple of times to fund an account, and start trading live. Ultimately, most brokers are trying to get you to trade live, and the demo is the first part of the process in taking a new client on.
One of the biggest things that should be noted is that trading a live account is much different than a demo account, at least from a psychological standpoint. After all, now you are starting to lose money and that is much more painful than being wrong on a trade. If you’re wrong in a demo account, your pride is at stake. If you are wrong in a live account, your pride AND your money are on the line.
When it comes to opening a live account, you will need to provide a certain amount of documentation. In general, you are typically offered a live account only after you can prove your identity, your residency, and any other legal documents necessary for the regulatory entity that the broker needs to deal with. Overall, you are looking at some type of government identification, and some type of utility bill from the address you are living at. Beyond that, there will be some legal documentation to sign that will be provided by the firm’s attorneys.
There is probably going to be some code of conduct agreement, as well as even more if there is such thing as a social trading platform. This obviously will differ from broker to broker, but in general these are the “hoops” that you will jump through.
Funding will vary from broker to broker, but most of them will accept bank wires, checks, and various types of electronic payment such as PayPal, Skrill, and many others. It is the funding part that the proof of identity is so important to the brokers, as there are stringent anti-laundering laws internationally that brokerage accounts used to be used against. Funding can take as little as a few minutes, or as much as a couple of days depending on the broker and the form used.
The psychology of going live is a bit of a mix. Initially, it’s an exciting time to be a trader because suddenly it becomes “real.” However, fear becomes a serious problem as well. Suddenly, losing matters, and you will notice that you are much less comfortable trading than you are when it is all paper trading. The psychological part of trading is without a doubt the most difficult, but it is also the most important. It is your psychology that will get you through the rough times, and keep you grounded during the high times. I cannot stress this enough: your success lies within the realm of psychology, and of course money management as well.
As mentioned previously, Money management is a huge part of your success or failure. The reality is that random trading can be profitable if you use the proper money management, and the psychology that is necessary. This is why so many traders can use the same system as another and come out with completely different results. It comes down to being able to keep your losses small, and let your winners run. I know that it is a cliché thing to say, but it is true, and that’s why you hear so much about it.
One of the biggest mistakes that I see traders making is that they don’t succeed in demo trading initially before risking money. That’s what a demo account is supposed to be there for, although I would admit that most brokers use it as a sales tool. Far too many people are too excited about trading with real money to learn how to profit over the longer-term. Most brokers know this, so they don’t have any issue giving away these free demo accounts, because they know that you will more than likely jump into the market long before you are profitable.
However, I would ask you this: “how can you expect to make money in the real world if you can’t make it in a simulated environment?” It’s very much akin to allowing a medical doctor to practice in the real world that failed in medical school. Far too many people think they are going to come into the markets and make a killing right away, not understanding just how difficult it is going to be profitable and successful in this endeavor. Overall, it can be a very rewarding career to be involved in, but you need to take your time and be patient about the way the market moves.
Switching from demo to live is relatively simple most of the time, but you do need to have the proper documentation. The real challenge comes down to making it. If you are not profitable in a demo account, there’s no way you’re going to do it in a live account. In fact, I can guarantee that you are going to end up losing your money. The average retail account is blown out in 90 days. Keep that in mind, but what I would say is that it’s all avoidable though, if you only take the time to learn how to trade, and only then start putting money to work.
Avatrade has great depth and breadth in its range of markets. In additional to forex, Avatrade covers all major areas of the capital markets including equities, fixed income, and commodities. It offers many more instruments than most of its competitors. Avatrade allows you to trade CFDs on 54 forex pairs, 16 commodities, 20 global indices, 21 ETFs, hundreds of individual shares from US, UK, Spain, Germany, France and Italy.
Avatrade is one of the few brokers to offer bitcoin and litecoin trading. It was awarded the Best European Bitcoin CFD Provider title at the 2014 European Bitcoin Awards. Avatrade also offers forex options for 30 pairs. You can also use options to hedge and alter the risk profile of your open forex CFD positions.
Avatrade provides many choices for automated trading including mirror trading, social trading, expert advisors, trading signals from independent providers like MQL5 and its API Library. Avatrade offers higher leverage than most other brokers with up to 400:1 leverage for floating spread accounts.
Avatrade demo account broker provides a lot of live market analysis to support your trading activity. Customers are given access to technical analysis from Autochartist and fundamental analysis from FXInsights, live news from Dow Jones, and audio commentary from Avatrade’s Chief Market Analyst, Naeem Aslam, a frequent contributor to news outlets like CNBC and Bloomberg.
Customers with deposits of at least $500 are given access to Autochartist free of charge. Autochartist’s pattern recognition features can be a very useful tool to help identify trading opportunities.
Avatrade invests heavily in trader education. It provides clients with ebooks, webinars and videos on a variety of topics, as well as, access to the premium forex education service, Hushtrade. Hushtrade arms you with a solid foundation in the fundamentals of forex trading and technical analysis. For advanced traders, Hushtrade also has cutting edge material covering trading strategy, psychology, and insights from professional forex and commodities traders.
Avatrade was acquired by Playtech in June 2015 at a sale price of $105 million. Playtech is a London Stock Exchange listed FTSE 250 gaming software and services provider and the owner of Markets.com. Playtech intended to integrate these brokers at some point in the future. With these recent acquisitions and solid financial backing, However,Playtech decided to walk away from the acquisition after the Bank of Ireland objected to the merger in October 2015.
Avatrade is a reliable and established forex broker officially regulated in 4 jurisdictions. Overseen by regulators from Ireland, Australia, British Virgin Islands and Japan, Avatrade is subject to stringent compliance requirements, including how it handles client assets, security of client funds and financial reporting. At present, there is no record of regulatory fines or settlements
Client funds are held in segregated accounts. Avatrade secures your information and money with 256-bit SSL encryption across the entire website. It uses McAfee Secure (HackerSafe) to prevent credit card fraud and identity theft.
Trading Forex, Stocks and CFDs carries risk and could result in the loss of your deposit, please trade wisely.
By Ron DeLegge
Statisticians use correlations (or cross-correlation) to measure the relationship between asset classes or investments. The general idea is to better understand the similarity or dissimilarity in how investments perform against each other and to build a portfolio of investments that can benefit.
The CBOE S&P 500 Implied Correlation Index (ChicagoOptions:^KCJ) also known as the “ICI” is one such statistical measure that uses options to estimate the average correlation among the largest 50 stocks inside the S&P 500 Index. The ICI recently hit 52-week lows indicating ultra low correlations between individual stocks and sectors.
Should investors use correlations between assets to make investment decisions? Before answering that question, let’s give a brief overview of how correlations work.
A correlation of +1.0 means that two investments have a perfect positive correlation. That simply means a correlation of +1.0 or close to it, is something you would expect from investments that perform and behave similarly.
Here’s an example: The historical performance and behavior of Intel (NasdaqGS:INTC) closely resembles the broader technology sector of stocks (NYSEARCA:XLK), which also happens to be Intel’s peer group. Should it be a surprise that Intel’s return pattern is similar to other technology stocks? Not at all, because individual stocks tend to behave similarly to the industry sectors where they reside.
In contrast, a correlation of -1.0 describes two investments with a perfect negative correlation. This means the return path of the two investments move opposite one another.
Here’s an example: The relationship between the S&P 500 Index (NYSEARCA:SPY) and CBOE S&P 500 Volatility Index (ChicagoOptions: ^VIX) could be described as a nearly perfect negative correlation. Why? Because the historical movements of VIX (NYSEARCA:VXX) have been opposite the S&P 500 around 80% of the time.
While in the heart of the first-quarter earnings season, investors might find it easy to look for profits and surprises to scoop up big gains. But if you pick stocks just because they are making profits, there’s no guarantee that the money is getting channelized to meet their obligations. A profit making company could have cash flow deficiency and that could lead it to filing for bankruptcy.
So for any potential investment over the long term, one must look at a company’s ability to produce cash – the lifeblood of business, the fuel for growth and the cushion amid downturns.
In any business, money flows in and out, but net cash flow indicates how much money the company is actually generating. Having positive cash flows indicates enhanced liquidity, giving the company more means for debt repayment, expenses, dividend payouts, stock buyback and finally reinvestment in business. On the other hand, a negative cash flow implies that a company’s liquid assets are decreasing, resulting in reduced flexibility to support these moves. So putting your hard earned money in stocks with less cash does not make any sense at all.
However, positive cash flows alone are not sufficient to predict a company’s future growth. If cash flow is increasing over time, it implies management’s efficiency in regulating its cash movements, reaping more money from its business, depending less on outside financing and finally its improving fundamentals.
So for stock picks don’t look at profits only. Make sure to look for stocks with dependable and increasing cash flows.
Let’s look for stocks for which cash flow has been increasing over time. For this, we screen for stocks whose cash flow in the latest reported quarter is at least equal to or greater than the 5-year average cash flow per common share. This points to a positive trend and growing cash over a period of time.
In addition to this, we have added:
Rank 1: No matter whether the market conditions are good or bad, stocks Rank #1 (Strong Buy) have a proven history of outperformance.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.
Current Price greater than or equal to $5: This screens out the low priced stocks.
VGM Score of B or better: This score is also of great assistance in nailing down stocks. Importantly, this scoring system helps in picking up the winning stocks in their respective industry categories.
Here are 5 out of 10 stocks that made it through the screen:
Anika Therapeutics Inc.
Emergent BioSolutions, Inc.
John Bean Technologies Corporation
Norsat International Inc.
Forestar Group Inc.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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Lesson 1 – What is Forex and how does It work,
What is Price Action Trading and How to Use it
Lesson 3 – Introduction to charting
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