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What is Forex Trading? – Explained – Investment U

Many investors may be asking “what is forex trading?” Foreign exchange is known as forex, FX or currency trading. Forex trading is essentially a marketplace where you can trade currencies from different countries. You have probably heard of people making millions through currency trading and wondered how it works. Since the forex market’s trading volume…

Many investors may be asking “what is forex trading?” Foreign exchange is known as forex, FX or currency trading. Forex trading is essentially a marketplace where you can trade currencies from different countries. You have probably heard of people making millions through currency trading and wondered how it works. Since the forex market’s trading volume tops $6.6 trillion per day, there is a huge potential to earn money if you know what you are doing.

What Is Forex Trading?

Imagine you own an oil tanker. After leaving the Middle East with a shipment of oil, you drop it off in the United States. The buyer pays you in American dollars, but your company is based in Europe. In order to bring your profits home, you have to convert your dollars into euros.

Forex trading was originally a way to help companies exchange goods between different countries. Over time, savvy investors realized that they could make money by investing in different currencies. Because of changes in a country’s economy and monetary policy, a currency’s value can increase or decrease over time. For example, a single United States dollar was worth 226.63 Japanese yen in 1980. In 2020, a dollar was worth 105.59 Japanese yen. This means an investment of $1,000 in Japanese yen in 1980 could be exchanged for $2,146.32 today.

When you exchange currencies, you are always working with something known as a currency pair. You sell one currency while you buy another currency. These currencies are represented by a three-letter code. For example, the Japanese yen is represented by JPY, and USD stands for the United States dollar.

Meanwhile, EUR stands for the European Union’s euro. The British pound is represented by GBP. Along with the yen and dollar, the euro and pound are the most commonly traded currencies. Because of this, you will often see currency pairs like USD/JPY, GBP/USD, GBP/EUR and EUR/USD. If you buy the USD/GBP pair, you are basically purchasing the United States dollar by selling the British pound.

Forex Pairs

The following are the four main kinds of forex pairs.

  • Major pairs: The major pairs are made up of seven different currencies. Roughly 80% of forex trades consist of these currencies.
  • Minor pairs: These pairs are not traded as often. Often, they involve the major currencies trading against each other instead of trading against the United States dollar. This includes currencies like the Canadian dollar, which is represented as CAD.
  • Regional pairs: These pairs are classified according to where they are in the world. For example, one collection of regional pairs is from Scandinavia.
  • Exotic pairs: Exotic pairs involve trading a major currency for a currency from an emerging economy or a small economy.

Is Forex Better Than Stocks?

Choosing whether you invest in the forex or the stock market depends on your risk tolerance and trading style. Each market has a different level of volatility. Equities tend to work better for buy-and-hold investors, but the forex market is popular among active traders. Forex is better than stocks in some cases, but it all depends on your personal situation.

Volatility

Volatility is a key difference between stock markets and forex investments. A stock has high volatility if the price swings drastically in a short amount of time. Traders typically use the forex market’s volatility to make short-term profits.

Trading Hours

Unlike the stock market, the forex market is always open. Normally, the stock market is only open during the daytime on weekdays. If you want to trade throughout the day and night, the forex market can offer more flexibility.

Leverage

With the forex market, you can use leverage to earn higher profits. Investors can normally get 2:1 leverage for stocks. Meanwhile, the forex market can offer 50:1 leverage. This means you can leverage an investment of $1 like it is worth $50. If you make a profitable trade, you will get substantially more in profits. Although, leverage can be a double edged sword and can lead to larger losses as well…

Is It Safe to Do Forex Trading?

Any investment involves some degree of risk. Forex trading can be risky if you use a significant amount of leverage. With leverage, it is possible to lose your entire investment and more if you’re not careful. Because of this, you should do your research and use practice accounts before you trade with real money.

How Do I Start Trading Forex?

When you trade in the forex market, you are buying one currency while selling another currency. On your last vacation, you probably conducted a forex trade without realizing it. When you arrived in another country, you might have exchanged your currency at a foreign exchange kiosk. Fortunately, you can also find online kiosks that allow you to take a position in a certain currency. Then, you can earn a profit if the change in prices moves in your favor.

Spot Transactions

Spot transactions are deals that are delivered within two business days or less. With the USD/CAD pair, spot transactions settle in just a single business day. These trades occur at the prevailing market rate.

Forex Rollover

In general, most retail traders do not actually want to receive the currencies they purchase because they are just trying to earn a profit. Because of this, retail brokers will normally rollover trading position at the end of the day or close and settle the difference. When the trader eventually decides to close their trade, they can realize their profits or losses.

Forex Futures

A futures contract is when you make an agreement with someone else to deliver a certain amount of a currency at a set date. This date is known as the expiry. Once you agree to the contract’s terms, they are non-negotiable. Often, people buy and sell these contracts before they expire to realize the profits or losses right away.

Forex Forward Transactions

When a transaction is settled later than the spot transaction, it is called a forward transaction. These prices are determined by changing the spot rate to accommodate the difference between each currency’s interest rates. Because a forward can be completely customized, you can change the amount of money or use a holiday as your settlement date.

The Advantages of Forex Trading

While there are downsides to any investment vehicle, forex trading offers a number of useful benefits.

  • Forex marketplaces are open 24 hours a day.
  • You can go long or short on any position.
  • High volatility gives you many trading opportunities.
  • You can get more out of your investment by using leverage.
  • You can pick a variety of currency pairs.

Forex trading has risks, so it’s important to do your research before you get started. Many brokers offer demo accounts you can use to practice trading before you use real money. Once you start trading, you can use leverage to increase your profits as you buy and sell currency pairs.

What is Forex Trading? Find Out More

Hopefully now you know the answer to “what is forex trading?” At Investment U it is our goal to provide you with all of the tools you’ll need to become a smarter and more profitable investor. Signing up for the Trade of the Day e-letter is the first step toward accomplishing this goal. At 5 p.m. ET, Monday through Friday, you’ll receive a quick recap of one of the most important trades we’re tracking. These are often the trades that could lead to substantial wealth creation – and you’ll know about them well before anyone else.

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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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Supreme Court Sides With Bits of Gold in Bank Dispute

Supreme Court Sides With Bitcoin Broker “Bits of Gold” in Israeli Bank Dispute

Upon appeal, the Israeli Supreme Court has rejected the closure of Bits of Gold’s banking facilities at Leumi bank, Tel Aviv.

The Israeli cryptocurrency brokerage’s appeal followed a previous ruling against it that has now been set aside by the higher court.

As Israel and many other countries struggle with the accelerated phenomenon of virtual currencies, Leumi Bank recently made the news for being a particularly blunt in its rejection of Bitcoin.

We should of course not be surprised with the banks attitude towards bitcoin or any other cryptocurrency for that matter. keep in mind that the banks become more and more obsolete because of them. Bits of gold versus leumi

They will keep on loosing money which now they make with ridiculous commissions of work that is fully automated. so they will try to see how they are able to make the operation and acquiring cryptos  as hard as possible knowing that they will never be able to stop them.

There is widespread anticipation that the upcoming G20 Summit in March 2018 will produce a global, moderate framework for a regulatory approach. Set against that are persistent hostile stances the world over from banks, asset managers and even governments towards cryptocurrencies.

Now that the countries understand there is money to be made with Taxation in cryptocurrencies they might want to make sure that the banks stay within their lane. 

Apart from the Israeli revenue service opting to tax cryptocurrency assets as “properties” and other more positive developments dating back to mid-2017, Israel remains a strange mix of genteel acceptance alongside wildly opposing voices.

There is thus Hope But no decision

Bits of Gold has fought a David and Goliath battle since their banker decided it wanted to steer clear of all cryptocurrency-related business.

On record as recently telling another bitcoin-related trader that they simply don’t want the business, Leumi Bank’s hard-line stance is accumulating bad press. The second-largest bank in Israel appears as discriminatory when analyzing virtual currency traders and other digital coin businesses.

During 2017, a customer made a bank transfer to the Kraken exchange site for buying bitcoin worth $1000. The bank identified the request, halted it, and started investigating.

The elated CEO of Bits of Gold, Youval Rouach said that “The court’s decision enables us to focus on the growth of the Israeli cryptocurrency community.”

 

The February 26 Supreme Court ruling granted Bits of Gold a temporary injunction against their account closure pending further scrutiny by the bank and other parties. The presiding bench declared that the company had “acted transparently and did not violate any provision of law.”

Calling the bank’s concerns “speculative” and turning an unsympathetic ear to the plaintiff, the ruling does, however, allow for the bank to still close the account on any small technical detail that defies legislation. As a record of a public spat around cryptocurrency’s right to be recognized in many ways, the ruling is seen as a victory for the local cryptocurrency community.

One Small Step Forward

Although not as absolute as nations like China that has opted for draconian bans, Israel is a front line for digital coins’ right not just to exist, but also become assets in the true sense of the word. The Supreme Court noted in its written ruling that Bits of Gold had not made itself guilty of the violation of any standing laws since opening its doors for business.

 

The Bits of Gold v. Leumi Bank case might become something of a test case once the bank applies its mind in scrutinizing the company’s accounts against the backdrop of existing legislation. The outcome will also be informed by sentiment post the G20 Summit due in March as well as other global regulatory trends.

Now that the countries understand there is money to be made with Taxation in cryptocurrencies they might want to make sure that the banks stay within their lane.

This was First Published by coindesk

 

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