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How to Trade FX During Volatile Times: Opportunities and Risk Management Strategies

Experienced traders have learned that global financial markets oscillate between periods of low volatility and period of higher volatility. While these different volatility regimes can be specific to a certain market (stocks, bonds, commodities, FX, etc), it’s common to see the magnitude of market movements impact all financial markets at once. In other words, when…

Experienced traders have learned that global financial markets oscillate between periods of low volatility and period of higher volatility. While these different volatility regimes can be specific to a certain market (stocks, bonds, commodities, FX, etc), it’s common to see the magnitude of market movements impact all financial markets at once. In other words, when the stock market is more volatile, we often see bigger price swings in commodities and currencies as well, given the interconnected nature of the global financial system.

In higher volatility environments like we’ve seen lately, the FX market offers several advantages over other markets, but traders must practice good risk management strategies to capitalize on these opportunities.

Advantages of Trading FX Through Volatile Environments

  1. First, and perhaps most importantly, the FX market is the largest financial market on the planet, with daily volume in excess of $5 trillion dollars ($5,000,000,000,000). This creates unmatched liquidity, or the ability to buy or sell quickly at the current market price. When other markets experience outbreaks of volatility, liquidity often dries up, making it more difficult to transact at the advertised market price. For more on market liquidity and volatility, see this quick YouTube video.
  2. Second, the FX market is open 24 hours a day, 5 days per week. These extended hours allow FX traders to enter and exit positions at any time during the week; by contrast, the stock and bond markets are typically closed for at least two thirds of the time. Global political, economic, and social developments don’t necessarily adhere to a traditional 9:00-5:00 schedule, especially when traders are not as focused on developments in North America, so the ability to trade at all hours is a key advantage offered to FX traders relative to other markets, where participants risk being stuck in trade that may see an adverse price “gap” while markets are closed.
  3. Finally, the FX market is a two-way market, meaning that it’s as easy to sell any currency as it is to buy. This advantage is particularly pronounced during bear markets, when most stocks are falling in concert with one another, regardless of the quality and long-term prospects for the firm. In those types of environments, it can be difficult to profitably buy any stock, whereas FX traders can more easily take advantage of market trends by trading currency pairs in either direction. While it is possible to short stocks as well, traders often need a special type of account and regulatory approval to do so.

Risk Management Strategies to Navigate Volatile Markets

Regardless of which market you’re trading, there are at least three major risk management considerations for trading through volatile environments:

  1. Generally speaking, traders may want to consider decreasing their position sizes, widening out stop losses, extending profit targets, and decreasing holding periods in volatile markets. Whereas EUR/USD moved an average of about 65-70 pips per day through 2019, an historically low volatility period, the pair saw average daily ranges in excess of 150 pips through 2009, 2010, and 2011, amidst the Great Financial Crisis and Sovereign Debt meltdown. If a trader developed a strategy to capture the majority of a single day’s movement – say 50 pips in EUR/USD during 2019 – he or she would want to consider using a wider stop loss and profit target and/or smaller position size when EUR/USD reverts back to moving more than 100 pips per day. In addition, certain short-term trading techniques and currency pairs could become potentially more profitable when market movements increase relative to the size of the spread between buy and sell prices. Constantly monitoring market conditions and making adjustments to established strategies can allow traders to stay ahead of the curve as the market’s volatility regime changes.
  2. In more placid markets, traders are less likely to experience “slippage” on market orders, where the trade executes at a different price than anticipated. However, when markets are more volatile, it becomes far more important to utilize stop and limit orders to ensure that trades are executed at the intended price. Though it can be more work, diligent order entry allows traders to maintain favorable risk/reward ratios regardless of how fast markets are moving.
  3. A full examination of trading and risk management strategies through different market environments is beyond the scope of this article, but readers are encouraged to explore the education section of our website and our “Foundations of Forex Trading” webinar series for more actionable insights.

The sheer size, trading hours, and two-way nature of the FX market make it particularly attractive to traders, and by tweaking their strategies, understanding order types, and continuing to learn, traders can maximize their chances of successfully navigating volatile market environments.

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Why You Need to Get Onboard With Blockchain!

Why You Need to Get Onboard With Blockchain!

Blockchain tech – so revolutionary in nature that some are calling it the “new internet.” It has applications in just about every industry, and has completely altered the way we think about internet security, the processing of information, and the speed of transactions.

Blockchain is the technology that supports the digital currency  or cryptocurrency called Bitcoin –

however this is not what it is really about as it has a far wider scope of applications and is being commercialized in a growing number of areas.

It has generated much interest in technology circles and beyond, because of the new possibilities it opens up in financial services, the public sector and other areas.

According to sites like BitFortune.net, blockchain tech is definitely worth keeping an eye on due to the myriad of benefits it provides.

Blockchain and Bitcoin are not the same thing – Bitcoin is implemented using blockchain technology, but blockchain technology can be used in contexts much wider than Bitcoin or other cryptocurrencies. so when we are talking about the blockchain we are talking about a combination of a number of technologies, these including:

  • Distributed ledgers.
  • The blockchain data structure.
  • Public key cryptography.
  • Consensus mechanisms.

Part of what makes it so exciting is that it is completely open source. As a result, there are already a number of interesting blockchain apps, and the number is growing daily.

The technology is so secure that it is already being used by DARPA to secure military data. Various governments around the world are working on ways to use the tech to protect their own data.
The tech is tamper-proof, and the data stored within it is permanent. It cannot be erased or altered, and this is what makes it so enticing to those needing more secure networks.

But there is more, folks. (Okay, so that sounds a bit like an infomercial, but the benefits are real nonetheless.) Transactions can speed across the network – taking only as much time as it takes for them to be authorized.

The blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.

William Mougayar

The system runs without the need for an intermediary, and this reduces the time it takes to execute transactions. This, and the unique way that the tech works, means that costs are significantly reduced as well.

What makes it so revolutionary is that the information is spread across every computer within the network. With Bitcoin, that means the data is securely “backed up” over thousands of computers.

Now, it is unlikely that banks will entrust their data to a public network in the same way, but they have been working on creating networks of their own instead.

The potential savings in terms of cost and time are extensive. If you want to learn more about these savings, check out the infographic below.

 

Why You Need to Get Onboard With Blockchain!


Why You Need to Get Onboard With Blockchain!


Visit bitfortune.net . for more interesting Infographics

Guys did an amazing job and was allowed to share.


 

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Statements about Cryptocurrency

Statements about Cryptocurrency

Cryptocurrencies are in a bubble and regulators could burst this at a whim.

  • Eight years after the introduction of Bitcoin, there are now over 900 cryptocurrencies and their prices are at all-time highs.
  • Richard Schiller categorizes bubbles as an underlying story driving the market forward, as opposed to the fundamentals of the assets. Cryptocurrencies are riding on a narrative of economic empowerment and freedom.
  • Despite the widespread attention that cryptocurrency receive, many of the actors involved in the market are not fully informed. Debate tends to turn to hype and naive investors are buying crypto-assets without fully understanding what they are.
  • Banks spend 73% of the market capitalization of Bitcoin each year on regulatory compliance. Crypto-assets are currently unregulated and free of these restrictions. As such, the market has thrived but also developed some bad habits.
  • Regulators cannot necessarily shut down cryptocurrencies, but they can restrict liquidity into them from fiat currencies and hamper their growth. The global derivatives market, for example, is worth $1.2 quadrillion, dwarfing Bitcoin’s $100 billion market cap.

Statements about Cryptocurrency

Market manipulations in crypto markets are undermining their credibility.

  • Due to low liquidity, no regulation, and a lack of clear understanding of the markets, pump and dumps are widespread in crypto markets. This is where a speculator can artificially sell while concurrently buying their own currency, wait for the market to rise, and then dump their holdings.
  • Frontrunning is also a common occurrence in ICOs, where early investors—who are used to show initial faith in the enterprise—buy discounted tokens before immediately selling them on.

As with historic bubbles, scams are exploiting naive investors.

ICOs can have the characteristics of vaporware. Entrepreneurs are raising hundred of millions of dollars purely on concepts. Money is being raised from investors who do not truly understand the technical concepts being proposed to them, let alone whether they are feasible.

  • The actual asset structures of ICOs are not only complex but also new forms of assets in their own right. This further confuses investors, which is compounded by the “FOMO” mentality of rushing into investments and following the crowd.
  • The use of celebrities to promote ICOs further demonstrates the use of manipulative marketing techniques used to cajole immature investors into participating in ICOs.
  • The current ICO craze is reminiscent of the South Sea Bubble of the 18th century, a speculatory period that involved crazed investment into enterprises in the New World. Once one of the highest valued companies of all time, the South Sea Company’s bubble burst and the company disappeared almost as quickly as it appeared.

Blockchains are still not proven technology, and more work is required.

  • Blockchains are still new concepts and their technology has not yet been proven on a consumer-wide scale. Attention should be focused on developing this, not speculating on short-termist projects.
  • The security of blockchains is a concept that most investors in crypto-assets do not understand. The onus is on them to protect their assets, which, on the basis of the amount of thefts and frauds in the space, is not being done properly.

There are some solutions to these issues.

  • A less polarized mentality of “us against the world” is needed; this could be enforced by the promotion of self-regulatory standards. These could also help to highlight the bad actors in the ecosystem.
  • More development is required into the underlying technology of blockchains. In the long run, this would be far more valuable than ICO moon-shot projects.
  • Awareness and discussion needs to be promoted. Conferences should present balanced debates from both sides of the crypto-view and more emphasis should be placed on educating investors instead of soliciting their investments.

Originally Published here at https://www.toptal.com

Statements about Cryptocurrency

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CMStrader Signals provider, the number 1 signal provider 4 years in a row

CMStrader Signals provider, the number 1 signal provider 4 years in a row.

CMStrader, the number 1 signal provider 4 years in a row, is now offering free signals to new clients!  Reliable trading tools are fundamental part of successful trading.

cmstrader for the Best Trading Signals

cmstrader for the Best Trading Signals

 

CMStrader’s signals success rate is estimated in 91% this should be enough to take a look and decide for yourself. since this is their biggest feature and drives this broker towards success, it is opretty afe to say that they do their utmost to provide you with quality forex signals.

This broker also entered the cryptocurrency market and offers several cryptocurrencies.  in short they act on the market and engage their clients directly.

when you start trading at CMSTrader, you can choose from a extended list of currencies, indices, commodities, gold and oil.

CMStrader Signals for better Trading

CMSTrader sends trading signals to traders’ accounts when there is an opportunity to buy or sell orders at specific points; an overview of the speculated price or loss ratio is included.

CMStrader Signals the number 1 signal provider among brokers

CMStrader Signals the number 1 signal provider among brokers

The signals are sent directly via SMS to a cellphone for major currencies traded on the stock exchange, foreign goods and precious metals.

In addition, signals can be sent to an e-mail address and or traders can be notified directly over the phone.  This service is available 24/5.

Like with Most proper signal services don’t expect 50 signals a day as simply there are not that many. you will get maybe a few good ones a day on which you could and most of the time should act.

Earn profits with CMStrader Signals in the forex market – the biggest trading scene in the world. Enjoy our unique benefits, trading education, minimum margin and best leverage! Start with a demo account and enter the amazing world of forex with CMStrader.

More about CMStrader Signals & Forex Broker

  • Name :CMSTrader
  • Website :cmstrader.com
  • Established :2013
  • Regulation :FSP
  • Country :United Kingdom
  • U.S. Clients Allowed ?  :No

CMSTrader is a leading investment advisor specializing in personal wealth management and growth and is a somewhat a newcomer to the Forex market.

they started in 2013 and since then have won several awards 2 including one for having best customer service in 2013.

CMSTrader “CMStrader Signals” is authorized under the name of CMS Ventures Limited which is a New Zealand Registered Financial Service Provider (FSP).

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