Connect with us

Demo Trading

Short-selling, ‘bullish’ market & other common trading jargon, explained to an average S’porean

At some point in your life, you’ve probably heard of the people around you dabbling in trading. After all, it makes a lot of sense. With inflation, things generally get more expensive year after year.

At some point in your life, you’ve probably heard of the people around you dabbling in trading.

After all, it makes a lot of sense. With inflation, things generally get more expensive year after year.

The money that you keep stashed in your bank account, or in a cookie tin underneath your bed, will inevitably shrink over time.

Dipping your toes in trading is an alternative way to invest, especially if you can afford to take more risks.

But how does one start trading? Isn’t this for people with tonnes of money (not me), or Wall Street bankers who spend their day scrutinising the market (also not me)?

Well, not exactly. Despite the risks, trading is actually not as complicated as people may think, although admittedly, there are many terms that simply bamboozle the average prospective trader.

Here’s a handy guide for some of the terms to help you on your trading journey.

Bull market/bear market

“The market is very bull-ish now, it’s a great time to start buying!!”

Traders have a pretty unique way of describing how the market is performing: by comparing it to animals.

Two specific animals, to be precise: the bull, and the bear.

A bull market refers to a financial market in which prices are rising, or are expected to rise.

This often takes place when the economy is strong, or is strengthening, and investor confidence generally climbs during this period as well.

Conversely, a bear market refers to one in which prices are falling, or are expected to fall.

A bear market may be due to a weak or slowing economy, or due to certain cataclysmic events which affect investor confidence (like Covid-19).

Can’t remember which is which? The actual origins of these terms are well documented over the years. It is often explained that the terms “bear” and “bull” are derived from the way in which each animal attacks its opponents.

While a bull will thrust its horns up into the air to jab you in the face (soaring stock prices), a bear will respond aggressively by swiping down with its paws (market is retracting).

Short selling

“Wow, you’re short selling XXX, you must know something we don’t!”

Short selling, in case you’re wondering, has nothing to do with your height.

It refers to a trading strategy which speculates on the decline of a stock.

Simply put, you borrow a stock, sell the stock (when the price is higher), and you purchase the stock again, at a lower price, to return it to the lender.

Still confused? Let’s use a simple example to illustrate this.

You borrow 100 shares of a company, whose shares are currently trading at S$1 per share, because you think that the shares of the company are going to decline soon.

You proceed to sell the stocks for a total of S$100.

Assuming your prediction is correct, and the share price dips to S$0.80 per share the next week, you re-purchase 100 shares to return to the lender, and keep a tidy profit.

This is a fairly advanced strategy, namely because you stand to lose A LOT if you speculate wrongly.

Using the same example, if shares proceed to skyrocket in price to S$10 per share instead of declining in price, you stand to lose more than S$900 from your initial S$100 trade.

Ouch.

Unsolicited advice: Don’t engage in short-selling simply because you have a hunch that a stock may go down in price. Make sure you make well-informed decisions (based on actual data), and be mindful of the risks you’re taking – similar to trading when you believe a stock is on the up.

Margin (or leverage)

“Wow, you’re buying on margin, you must be quite confident!”

Trading on margin refers to enhancing your buying or selling power by borrowing to trade.

The idea is relatively straightforward: you use whatever securities you currently have (or cash) as collateral for a loan, and then you use the combined assets to buy more securities than you otherwise could.

As you are using borrowed money for trading, your gains will be magnified.

Naturally, this loan doesn’t come without a catch. If the market moves against you, your losses will also be magnified, meaning you could lose more than your initial deposit.

Additionally, if your margin account falls below a certain amount (likely due to a losing trade), the broker may initiate a Margin Call.

In a margin call, a provider will demand that you deposit additional cash or securities into the account in order to bring it up to a minimum value, known as the maintenance margin.

If you are unable to do so, you may be forced to sell your securities, regardless of the market price, which may put you in an even deeper loss.

Even more unsolicited advice: Don’t engage in margin trading unless you have done your research and you are really, very, absolutely sure about your investment strategy.

Contract for Difference trading

“I heard you are doing Contract for Difference trading, make sure you can bear the risks!”

A Contract for Difference (CFD) is a form of derivative trading, which enables you to speculate on the rising or falling prices of fast-moving global financial instruments, such as shares, commodities or forex.

Unlike conventional trading, you don’t actually buy or sell the physical asset when you trade CFDs.

Instead, you enter into an agreement with the provider on the ‘price’ of whatever you are buying. As you don’t own the physical share, CFDs open up additional markets to trade outside of traditional shares.

This includes oil, gold, the US dollar, and even commodities like soybeans.

CFDs are also leveraged products. This is effectively the same as trading on margin, meaning that you only need to deposit a small percentage of the full value of the trade in order to open a position.

While CFD trading has the potential to magnify your returns significantly, you may also lose more than the capital deposited, which can be very problematic.

CFD trading can be highly lucrative, as it allows you to amass huge profits, even if you lack significant capital.

However, it is important to bear in mind that CFD is a very risky form of investment, and that losses are most often a part of CFD trading strategies.

Consider using CMC Markets to start your investment journey

Still confused? Totally understandable.

For a beginner, trading and investment may seem really complicated, but with a little bit of research, it’s honestly not rocket science.

This is also something that is really useful for everyone to understand, given how it is vital for us to beat inflation (I assume this is quite important for most people).

If the road ahead seems daunting, no worries.

You can consider using CMC Markets to help you kick-start your investment journey.

CMC Markets is an award-winning trading provider with over 30 years of experience in the industry. The platform allows traders to access competitive spreads and low margins, which will keep your trading costs down.

They also have an app for both Apple and Android users.

Opening an account with CMC Market is free, and new users can open a demo account, where they will be provided virtual money to test out the platform’s features, before they decide to start trading for real.

CMC is also licensed and regulated by the Monetary Authority of Singapore (MAS), so users can rest easy.

Ultimately, trading is not for the faint of heart, and there are certainly risks involved.

However, if you spend the necessary time to learn more about trading, and you manage your risks carefully, the upsides can be spectacular (for your wallet).

This sponsored article by CMC Markets made the writer wish he spent more time learning about trading, and less time hoping for a magic genie to appear.

Visit cmcmarkets.com.sg for more information. 

This advertisement is for information only, not an investment recommendation or financial advice. Losses can exceed your initial deposit. See risk warning/disclosure & other important information on cmcmarkets.com.sg. This advertisement is not reviewed by the Monetary Authority of Singapore (MAS). CMC Markets is regulated by MAS. 

Top image via Unsplash.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Broker Reviews

Buycryptomarkets Review – top 75 Broker?

Buycryptomarket for trading crypto

Buycryptomarkets Review

buycryptomarkets is a global forex and CFD broker with trading platforms that is suitable and fully functional for all devices.

This is a good option for all levels of traders, although the product portfolio is average, and there is an inactivity fee to be aware of.

Initially formulated in 2023 to provide a robust forex trading platform, buycryptomarkets offers to include CFDs, indices, shares, commodities, and cryptocurrencies.

buycryptomarkets has several trading tools and features designed to make your trading experience as smooth as possible. The trading platform has been heralded as a simple and convenient platform without losing the functionality you would find at MetaTrader 4. Some education is also available through the trading platform, and highly responsive customer service is available 24 hours a day.

Please read my full buycryptomarkets review for further details of this forex broker so you can decide whether buycryptomarkets can meet your needs.

Who is buycryptomarkets?

buycryptomarkets is a global forex, spread betting, and CFD online broker. buycryptomarkets is an online Crypto and Forex Broker providing traders across the globe with cutting-edge technology to trade the world’s markets. In a continuous effort to give their traders a more comfortable and safe trading experience, their experts have been improving their service and solutions ensuring traders have the freedom to trade whenever and wherever they like.

 

buycryptomarkets product range overview

The product range at buycryptomarkets is average compared to other brokers. They offer a solid selection of currency pairs and CFDs, no futures CFDs, and an average number of commodity and stock index CFDs. additionally, they do offer leverage trading on the main cryptocurrencies.

Forex trading

More than 50 Forex pairs are available at buycryptomarkets with no commission and some of the tightest spreads in the industry.

Indices and Financial Trading

Indices and financial CFDs have flexible margin requirements and low spreads, representing some of the industry’s best spreads. There are no overnight or hidden fees of any description to worry about.

Commodities Trading

At buycryptomarkets, there are several commodity CFDs, including metals and energies.

Share CFDs Trading

Trade more than 100 company shares without ever owning the underlying security. At buycryptomarkets, you can access global stock exchanges with the option to go long and short and benefit from leverage. For non-leverage trading, there is zero commission.

 

Buycryptomarkets Accounts

There are a few trading account options at buycryptomarkets.  there is not a lot of info concerning this till you are actually in the registration process.

the only thing you should know is that the minimum deposit for opening an account is only $250.

Variety of Trading Accounts

No matter your trading exposure, you deserve an opportunity to trade in CFDs. With access to multiple trading account types, you can choose the right account for yourself and start performing trades in multiple CFDs.

The more experience you gain in the online trading market, the higher trading account you can adopt to trade in more challenging environments. If you are a beginner, start by making a minimum deposit of $250 to trade with a basic account.

Buycryptomarkets  web trading platform

The web platform allows you to place trades directly from your web browser in an easy-to-use interface that is customisable and available in several languages. The web trading platform falls short because of its lack of social trading; however, it is well-designed with several useful features.

There is a two-step login for additional security, and you can search for an asset using its name or by category. Order types include:

I was impressed with both the portfolio and fee reports which were comprehensive and easy to use, with clear information on commission, swap fees, and performance.

There are also the following useful features available on the trading platform:

Trailing stop

Trailing the position of a current price can then trigger a stop order as the price reaches a predetermined distance from a stop order. It works similarly to a stop order but in a more controlled way that aligns with movements in the market.

Market Sentiment

This allows you to closely monitor movements in the market using data from other traders concerning a specific instrument.

Hedging

This allows you to mitigate risks by investing in the same product in a different direction.

Charts

Real-time charts provide up-to-the-moment information, including historical trends, forecasts, and current trends.

Buycryptomarkets mobile trading platform

The mobile trading platform is in keeping with the web trading platform, with much of the same functionality. 

The actual design is well laid out and easy to use with customizability. I found the mobile app fast with personalised watch lists and the ability to open positions directly from real-time charts.

There are price alerts that include statistical alerts, which can be monthly or yearly for currency pairs, indices, etc. Clicking on the alert will automatically open the app on the instrument.

 

buycryptomarkets customer service review

Customer service is excellent at buycryptomarkets, with immediate response times across multiple channels.

There are several channels for contacting customer support, including phone and email. When I tested their service, my query was dealt with immediately without even the intervention of a chatbot. The service provided via email and phone was similar, with fast, relevant responses to my queries. Customer service is provided 24/5, which is above average.

buycryptomarkets is opening an account.

The account opening process is straightforward, fully digital and quick. You will need your ID.

To open your account, you should first decide on the account type you wish to open

Then you can follow these quick and easy steps:

  • Select your country of residence
  • Add personal information, including name and email address
  • Choose a password
  • Enter your home address and tax residency
  • Complete some simple questions relating to your trading experience
  • Fill in information about your personal finances, such as income savings and employment status
  • Select your base currency
  • Upload your ID documentation and proof of address, such as a utility bill or bank statement.

buycryptomarkets Deposit and Withdrawal

Deposits and withdrawals and essentially free, and the minimum deposit is high compared to what you would find at other brokers.

Before making your first deposit, you will need to choose between the following base currencies:

EUR, USD, GBP

Deposit options include:

  1. Bank transfer
  2. Credit and debit card
  3. Cryptocurrency

The minimum deposit is $5000, which is higher than other brokers. There are no fees should you choose to deposit via bank transfer from your bank account.

Bank transfers take several business days.

Withdrawals can be made using the same methods accepted for deposits, and there are no withdrawal fees for electronic wallets and credit/debit cards. 

buycryptomarkets safety

buycryptomarkets is not regulated by the Financial Conduct Authority (FCA) but is performing full due diligence to comply with AML regulations.

In addition, all client funds are held in segregated bank accounts to protect those funds should buycryptomarkets go bust.

The buycryptomarkets negative balance protection protects client funds should their balance go negative.

buycryptomarkets fees

buycryptomarkets has low CFD and forex fees and average non-trading fees.

Fees can be separated into two main categories for a CFD and forex broker: trading and non-trading fees.

Trading fees

The trading fees will vary depending on the financial instruments you are trading within each asset class. Trading fees can be charged as a spread, a commission, or a financing rate.

Spreads differ between the bid and ask price for a foreign currency price. Here’s how buycryptomarkets spreads compare against some other forex brokers:

Non-trading fees

buycryptomarkets has low non-trading fees as they do not charge deposit and withdrawal fees, and there is no account fee.

Inactivity fees are charged. There are inactivity fees to be aware of. However, these will only kick in once your account has been inactive for several months and you have a positive balance.

Who is buycryptomarkets suitable for?

buycryptomarkets is suitable for all levels of traders looking for a solid trading platform and very competitive spreads.

The selection of account types is aimed at both retail and professional investors.

Forex Risk Disclaimer

There is a very high degree of risk involved in trading securities. Concerning margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to leverage, creditworthiness, limited regulatory protection, and market volatility that may substantially affect the price or liquidity of a currency or related instrument. It should not be assumed that these products’ methods, techniques, or indicators will be profitable or will not result in losses.

 

Continue Reading

Broker Reviews

Exallt Review – Demo Account – top 75 Broker ?

exallt review

Introduction to Exallt Review 

Let us start from the beginning. People should remember that Exallt offers many investment tools in the capital markets. Creating a portfolio with cryptocurrencies, stocks, commodities, ETFs, and more is possible.

It is a new brokerage that has just opened its door. That said, Exallt Live can offer exemplary services and products.

To get more details, proceed with Exallt review. The next sections will provide a detailed professional analysis of the broker and its offerings.

Broker Name:Exallt
Broker Type:CFD broker
Operating since year:2023
Regulation:Only KYC/AML
Broker status:Independent Broker
Customer Service
Phone:+44 2086382873
Email:[email protected]
Languages:English, Spanish
Availability:phone, email, Social Media
Trading
Trading platforms: Desktop, Mobile and Webtrader
The Trading platform Time zone:
Demo account:Yes
Mobile trading:yes
Web-based trading:yes
Bonuses:yes
Other trading instruments:Forex, CFD, crypto, commodities, indices, stocks
Account
Minimum deposit ($):$5000
Maximal leverage:1:400

 

Exallt Trading Products and Interesting Details

Commodities

Explore top commodities, trade what you want, when you want.

Explore trending commodities such as gold, silver, oil, and others, use innovative tools and make informed trading decisions at Exallt. Benefit from advanced charting and analysis as well as ultra-fast transaction processing. Exallt delivers a trading environment that helps investors to grow.

Interestingly, it is possible to trade different types of commodities. For example, oil and natural gas. Moreover, precious metals such as gold and silver.

Forex

Forex trading is made simple by Exallt.

Forex is the most traded market in the world. It is a decentralised global market for the trading of currencies. The most popular FX pairs involve major international currencies and experience the highest trading volumes and liquidity. This market determines foreign exchange rates for every currency.

Indices

Expand your trading opportunities. Trade the most popular indices at Exallt!

Indices are another in-demand trading asset. An index measures the performance of a group of stocks, bonds, or other assets. By trading indices, you can gain exposure to a wide range of assets without buying them individually. Most index trading is done with financial derivatives like CFDs. This makes it an ideal way to diversify your portfolio and manage risk.

Stocks

Trade stocks at Exallt.

Exallt is about making stock trading easier. Get real-time access to stocks from top exchanges of the world. Diversify your portfolio with a large variety of leading global stocks. Stock trading ensures two ways of earnings: through capital appreciation or dividend payments. This market features the potential for the highest returns.

Cryptocurrencies

Exalt – the easiest and the most secure way to trade cryptocurrencies.

If you can time the market right, trading cryptocurrencies gives you much higher returns than traditional investments. It minimizes risk as you speculate on the rise and fall of the market without owning the asset. Being decentralised, cryptocurrencies allow for more freedom in trading, as there are no restrictions on how much can be traded or how often.

range of markets

range of markets

Exallt and its Trading Platform

It is hard not to mention its platform. Hopefully, it is quite easy to use the platform. 

As a reminder, trading is simple. The first step is to select an asset. All users have to do is click on the “asset” tab on the platform. They need to choose a preferred asset from the extensive tradable asset selection offered by the firm.

The next step is deciding on the amount a trader wants to invest in any trade. Unsurprisingly, the higher the investment, the higher the potential rewards.

Moreover, deciding whether to go short or long on their preferred asset is important. Advanced charts, graphical trading tools, technical indicators, and live analysis help to make an informed decision on probable future price movements.

It is important to remember about risk factors. When a trade position opens, customers should protect their positions from market risks. Customers should use Stop Loss and Take Profit orders. Thanks to Stop Loss orders, it is possible to reduce potential losses. Moreover, Take Profit orders allows users to lock in their profits.

Users should remember that Stop Loss and Take Profit orders will automatically close their positions when triggered.

Exallt trading platform for all devices

Exallt trading platform for all devices

Exallt and Education

Hopefully, Exallt Live offers interesting information. It is desirable to read every chapter of the guide. Moreover, people will find this guide brimming with information for their financial education. Furthermore, Exallt ’s goal is to educate investors and bring transparent investing to anyone who wants it, not just the elite.

Security Of Funds

RISK MANAGEMENT

Exallt continually detects, assesses, monitors, and controls each risk associated with platform users’ trading transactions, operations, and actions. This means that they continuously evaluate the effectiveness and compliance of the policies, approaches, and procedures. Such a system approach allows Exallt to cover its financial needs and capital requirements quickly.

SEGREGATED ACCOUNTS

Exallt is incredibly proud of ensuring the ultimate protection of clients’ funds. They apply a model that keeps our clients’ funds separate from the company funds. In the unlikely event that Exallt would ever enter liquidation, the clients’ funds are wholly segregated off the balance sheet and cannot be used to cover the company’s debts and pay back creditors.

REACHING THE TOP EU BANKING INSTITUTIONS

Exallt attentively chooses the financial services to partner with. Exalt needs additional facilities to support and conduct transactions. They partnered with payment service providers to work with numerous banks worldwide, including central tier-one banks such as Barclays, HSBC & Deutsche Bank. Rest assured, the security of Clients’ funds, alongside Execution and Customer support, forms the essential focus of Exallt’s activity.

Exallt Review: Conclusion

As can be seen from the review of Exallt , it makes sense to cooperate with this firm. . Moreover, its website provides many interesting details, and it is desirable to have a look through their website to see how well Exallt suits you.

We strongly hope that this Exallt review will give you accurate information about the broker enabling you to make the right decision of choosing this broker.

Continue Reading

Broker Reviews

Trading 212 review

Trading 212 Trading 212 deals View Similar Amazon US Trading 212 is a London-based brokerage platform that aims to democratize trading by making it accessible to the masses. Founded in 2006, Trading 212 allows users to trade in a variety of assets including Forex and currencies, gold, commodities, crypto, and stocks, etc.

Trading 212 is a London-based brokerage platform that aims to democratize trading by making it accessible to the masses. Founded in 2006, Trading 212 allows users to trade in a variety of assets including Forex and currencies, gold, commodities, crypto, and stocks, etc.

Trading 212 got the license to operate in the UK in 2013 and is approved by the FCA (Financial Conduct Authority of England and Wales). It has a freemium model offering the basic services without any charge hoping that the users opt for other paid services or transact on the CFD area of the platform.

As a user, you can use their web-based trading suite or download the application on your computer. There is even a mobile app available for both iOS and Android phones, in case you want to transact on the go.

What to expect

Trading 212 offers an easy DIY platform and allows over 1,800 instruments to trade, offering enough options to traders to decide where and how they want to invest their money. These instruments include major cryptocurrencies like Bitcoin, Ripple, LiteCoin, Ethereum, Monero, EOS, Dash, Neo and more. Traditional assets like stocks, commodities and indices can also be traded on the platform. The diverse list of assets and choices available to trade on the platform should be attractive to many users.

Trading 212 2

(Image credit: Trading 212)

For first-timers, Trading 212 offers a demo account which lets you try out the platform and perform test transactions without registration. This demo account gives you a real-time experience of how the platform works on your computer and mobile applications. In case you decide to sign up, you do need to provide some official documents to verify your identity and address. These documents include:

  • ID Proof: a scanned color copy of passport, driving license or national ID
  • Address Proof: a utility bill or bank statement from the past three months carrying your address

These are simply standard requirements as part of anti-money laundering legislation.

Trading 212 3

(Image credit: Trading 212)

There is a set of questions which you need to answer for the company to understand your experience level as a trader. Trading 212 might reject your application on sign up, if the firm feels that it might be too risky for you to transact on such a platform. The entire signup process may take a good 10-15 minutes, so keep that much time handy.

Trading 212 offers you three different types of account: Trading 212 Invest, Trading 212 CFD and Trading 212 ISA.

Trading 212 Invest is best suited for traders who like to invest and trade in equities. However, the platform does not allow short-selling of equities, so in case you’re only interested in this type of trading then Trading 212 is not the right platform for you. Trading 212 ISA is only for UK-based traders who want to benefit from tax-free trading up to a certain amount, while Trading 212 CFD is open for all international traders.

In terms of deposit and withdrawal options, Trading 212 offers multiple choices like bank transfers, credit and debit card payments, Skrill, PayPal, Dotpay, Giropay, and Direct eBanking. Note that it only accepts payments in currencies like GBP, EUR and USD.

Trading 212 4

(Image credit: Trading 212)

The web platform is very easy to use and it offers an organized layout. On the extreme left, you have the instruments you follow by adding them to your watch-list. All your pending orders or previous purchases show right next to the watch-list. In case you want to modify your transaction after looking at the live trends, this can be done here as well.

The center part of the screen displays a detailed graph of any instrument that you want to follow. Useful tips and videos can be found on the bar on the right side. Various reports can be found grouped right under the login section.

Mobile app

The Trading 212 mobile application is also fairly easy to use and shows information in an easy to understand graphical format. Simple swipe gestures help you switch between different sections and instruments. You can set price alerts, access forum, reports, or training videos right from the menu. There is a demo account available for the mobile app too that allows you to transact in all the instruments.

Charges

Trading 212 is one of the few platforms that does not charge you for transactions and is transparent about the costs applicable with paid-for services. While withdrawing funds, there is a fee applicable on the wire transfers. Third-party transfer fees may also be levied, if applicable. The platform wants you to remain active and charges you for inactivity, if inactive for over 180 days consecutively.

Support

Customer support is one of the most important features of any trading platform. Support is available by calling in, email or even through the contact page on the site. The website also has a live chat option in case you want to chat with a representative.

Trading 212 offers support in a wide range of languages including English, German, Dutch, Spanish, French, Italian, Polish, Serbian, Norwegian, Swedish, Czech, Russian, Romanian, Turkish, Arabic, and Chinese.

Regulations and credibility

Trading 212 is a trusted broker registered in England and Wales, and is authorized by the Financial Conduct Authority (FCA). It is also registered in Bulgaria and is regulated by the local Financial Supervision Commission.

The company keeps the clients’ funds separate from the company funds and are protected under the Financial Services Compensation Scheme (FSCS) which offers a security of up to £85,000. In Bulgaria, 90% of deposits with a limit of €20,000 are secured by the Investors Compensation Fund or ICF Bulgaria.

Trading 212 allows users from across the globe to sign up, though regulations prohibit sign up from regions like American Samoa, Belgium, Democratic People’s Republic of Korea (DPRK), Guam, Northern Cyprus, Northern Mariana Islands, Puerto Rico, Turkey, United States of America, and United States Virgin Islands.

Final verdict

Trading 212 is a very user-friendly trading platform, especially for beginners. The fact that you can try out the platform both on mobile and web before taking the plunge is a big advantage. Limitations like no short-selling may be a turn off for traders. However, the fact that Trading 212 offers over 1,800 assets and is very transparent about charges makes it one of the easiest recommendations for us.

Continue Reading

Trending