Netting or hedging account, what is the difference between these two types of accounts
Hedging and netting accounts are the two main types of accounts used in forex or stock exchange trading.
A hedging account is a type of trading account that allows traders to simultaneously open positions in different directions for the same currency pair.
The main feature of this type of account is the ability to hedge or lock positions , which allows you to reduce exchange rate risks when using certain strategies.
With this type of account, you can simultaneously open several buy and sell orders for one currency pair.
A netting account is a type of Forex trading account that allows traders to open only one position on one currency pair at a time.
What is Flash Crash, the causes and consequences of this phenomenon?
A flash crash is a sell-off of a stock or other exchange-traded asset that causes the price to drop hundreds of points in a very short time.
Often during a Flash Crash, the price drop occurs so quickly and unexpectedly that many traders perceive this event as an error of the trading platform.
And they begin to look for the reason for such an event on the Internet or contact the support of their broker’s clients.
In fact, their assumptions often turn out to be not so far from the true reasons causing the Flash Crash.
What Causes Flash Crash?
Human error - The US Securities and Exchange Commission (SEC) has identified humans as the main cause of periodic crashes in the stock and foreign exchange markets.
Features of working with Forex trading advisors, pros and cons of such trading
Expert Advisor (EA), which is also commonly called advisors for automatic trading on the stock exchange, are becoming more and more popular among traders every year.
These programs not only help to automatically make money on Forex, but also relieve the trader from constantly sitting in front of a computer monitor, thereby saving time and nerves.
However, there are still many skeptics who doubt the effectiveness of this tool, stating that the advisor often becomes the reason for losing the deposit.
But the reason for the failures lies not so much in the scripts themselves, but in the wrong approach to their use.
Risk and Reward ratio, a simple approach to calculating the loss/profit ratio when trading on the stock exchange
Traders who are just starting to trade on the stock exchange mainly think only about the amount of profit received and quite rarely plan for possible losses.
At the same time, the main role in planning successful transactions is played by the ratio of acceptable loss to planned profit.
Often such a ratio is expressed through the following formula - risk/reward ratio, which allows you to assess the prospects of a transaction.
Typically, both parameters involved in the formula are set using stop orders, so you can imagine that:
Risk is the amount of loss that you assume before opening a trade through the stop loss order parameter.
What type of account is best to open for stock trading?
After you have registered with one of the stock brokers, you need to open a trading account.
This is quite an important point, because the right choice can help not only improve trading efficiency, but also save money.
True, choosing an account type sometimes raises questions for a novice trader, so we will try to figure out which option is best suited to your situation.
Today, most brokers offer up to five different account options, each of which has its own advantages and disadvantages.
Principles of price formation in the Forex currency market
When starting to trade Forex, many traders completely ignore the theoretical foundations of the foreign exchange market, relying only on indicator signals.
Moreover, they do this completely in vain, because knowledge of the principles of price formation allows you to understand what is currently happening on the stock exchange and can serve as an excellent filter for false signals when making the right decision.
The essence of the process is that each indicator signal in the trading platform must be based on a specific event.
That is, if the script gives a signal for a trend reversal, and there are no strong events in the news feed, you need to think carefully before opening a deal.
What is a VPS server for trading
Any trader who decides to achieve results on Forex faces certain difficulties over time.
Only beginners naively believe that a personal computer and a little luck are enough to succeed.
Having mastered the basics of working in the market and gained experience, a trader inevitably has to think about the help of trading robots and scripts, because keeping track of a dynamic market throughout the day is very problematic.
Using trading experts in trading has a number of advantages:
• 24/7 monitoring of the market situation even when there is no trader at the terminal;
• the speed at which operations are performed is incomparable with human capabilities;
• strict adherence to the trading strategy, when trader intervention under the influence of emotions is excluded.
Stock market participants or those who can influence the price of shares
In order to successfully trade in the stock market, you need to understand at least a little about who determines the value of securities.
How their decisions can affect the value of shares, how to use this information when forecasting rates and making plans.
Stock market participants are all those who issue, regulate the process and influence the demand or supply of securities.
At the moment, these include issuers that issue securities, investors who finance the issue, the state regulating the circulation of these securities, organizations that protect the interests of investors, professional participants who make money from this process.
Each of the listed groups influences the process of securities circulation in its own way, pursuing certain goals.
Free stock trading training
In any business, the most important stage is learning the basics; without this, it is simply impossible to achieve anything.
And the quality of your studies directly determines whether you can become a professional in your chosen specialty.
Most traders who fail on Forex switch to the stock market, and to some extent this is absolutely correct, because the behavior of securities is more logical.
The main thing is to find high-quality training in stock trading, because modern Internet resources are more focused on providing information on the Forex market.
There are few traders who trade stocks, and therefore it is difficult to find blogs dedicated to working with this market segment.
How to learn to forecast the Forex market
For those who have just come to the stock exchange, it seems that the main thing is to trade with the trend, that is, open orders in the direction of the existing trend.
In fact, what is more important is not what trend exists at the moment, but what it will be in a minute, hour or day.
That is, you need to predict the further price movement and, based on the forecast, make a decision on the direction of the future transaction.
Therefore, before you start trading on Forex, it is so important to learn how to predict exchange rates; this, so to speak, is the key to successful trading.
A novice trader must know at least the basics of this science; without this, most transactions will be unprofitable.
Quoted and base currencies and their role in the quotation
When trading Forex you have to deal with a lot of different concepts to which the calculation of various parameters that are important in trading is tied.
One of these concepts is the quote and everything connected with it, since on the basis of this knowledge the cost of the lot and the value of the point, as well as the swap, are calculated.
The quotation is formed by two currencies, the first of which is the base one, the second the quoted one. It would seem that there is nothing simpler, but.
Base currency
This is the currency in which transactions are carried out and the volume of the transaction is calculated in it, which is why it is called the base one.
For example, GBPUSD currency pair British pound US dollar, here the base is the British pound, volumes are calculated in it.
Types of Forex trading positions
In the terminology of financial markets, the word “order” is used quite often, meaning a trading order.
Experienced traders often replace this term with the word "position".
Depending on the direction of the transaction, positions are divided into long (purchase of an asset) and short (sale of an asset), according to the duration of the transaction they can be short-term or long-term, and according to the opening time - urgent or deferred.
Based on this classification, orders are based that can be opened in the trader’s trading terminal.
What can you learn from the broker's specification?
One of the most important stages when trading Forex is choosing a broker, but in order to make the most successful choice you need to compare the trading conditions of different brokerage companies.
The easiest way to do this is to obtain information directly from the broker’s website and analyze the specification of assets available for trading.
In order to find this specification, go to the website of the company that interests you - http://time-forex.com/spisok-brokerov , there we click on the “Trading” tab.
Next, select the “Contract Specifications” tab; sometimes this information may be hidden under another menu item.
After the transition, you will see a table containing all the necessary information on currency pairs or other assets - cryptocurrencies, stocks, metals or futures:
Forex trading basics.
In order to trade on the currency exchange, you need to know some practical and theoretical basics
of forex trading. This is the minimum without which you simply cannot trade and will quickly lose your funds. Therefore, spending a few minutes reading this article will not be in vain and will save you from some mistakes.
The basics of forex trading include such points as general concepts, technical aspects of transactions, fundamental and technical analysis and basic strategies for trading.
In the classical concept, Forex is currency trading, but thanks to the expanded capabilities of the trading terminal, you can now trade precious metals, stocks, contracts and other instruments.
Correlation of currency pairs, table and indicator for calculating the indicator
Many people often hear the statement that exchange rates have a stable relationship.
However, almost nowhere there are precise practical recommendations for applying the acquired knowledge in practice. To understand this, you should consider the concept of correction factor.
Currency pair correlation is a relationship or relationship. In the understanding of traders or investors, this concept refers to the coefficient of interdependence of financial assets.
This indicator is very often used in many trading strategies, and it should be noted that there is a connection not only between exchange rates, but also a stable correlation between assets included in different groups.
The most striking example of correlation at the moment is the dependence of cryptocurrency rates; when the price of Bitcoin changes, the rates of other cryptocurrencies begin to change almost immediately.
Long-term Forex trading. The secret of stable profits
Many traders, having gained sufficient experience and gained some success in intraday trading, sooner or later begin to think about long-term or medium-term trading.
In fact, there is simply a huge myth surrounding scalping and intraday trading about the profitability of this approach.
Most beginners mistakenly believe that by devoting more time to trading, you will somehow miraculously earn more.
Unfortunately, this approach is fundamentally wrong and has been hammered into us since the era of the Soviet Union.
For example, in the past, people who performed more than the norm in production were strongly encouraged, rewarded, and newspapers wrote about them.
Review of the MetaTrader 4 trading terminal
Today it is difficult to imagine how trading would have developed if trading terminals had not appeared.
And in truth, anyone who has read many classics of stock trading may have noticed that traders used to sit with a newspaper in their hands at brokerage companies, trying to carry out one or another currency transaction.
The situation was the same with technical analysis, because of which traders spent days sitting in front of large Whatman papers, calculating formulas for simple indicators and plotting them on pre-drawn charts.
It is worth reading a book about the Ichimoku indicator, in which you would learn that Goichi Hosoda (who invented this indicator) together with his students spent days drawing his indicator to predict the Japanese index.
How to use Pending Orders to make a profit
Exchange trading allows you to open not only forward transactions, but also deferred ones, the opening of which will occur
after some time and only if certain conditions are met.
That is, you can give an order to buy a currency if its rate drops below the specified level, thereby completing a transaction on the most favorable terms and without even being present at the trading terminal.
Such orders are carried out using pending orders, which, due to their functionality, significantly expand trading capabilities.
Internet brokers.
Recently, the concept of Internet trading has widely entered the life of every user of the World Wide Web; now there is no need
to look for a company that will provide access to trading, go to the office, enter into contracts and give orders over the phone.
It is enough to have a computer, laptop or even a smartphone and you are already a participant in trading on an online exchange, which allows you to enter into transactions with currencies, buy and buy gold or shares. The main component of this type of earnings are Internet brokers.
Internet brokers are companies that provide access to financial markets exclusively online, providing the opportunity to make transactions on the stock exchange using software or web terminals on their own websites.
The importance of fundamental analysis in Forex.
Recently, the number of opponents of fundamental analysis has increased significantly; many traders
do not attach any importance to it when trading Forex.
Why analyze the economic situation or follow the news if the price includes everything?
The unpleasant result of such conclusions is triggered stop losses, and if the trader did not take care of stop orders, then drained deposits.
Yes, it is not always possible to predict how a currency will behave after the release of this or that news, but it is better to be prepared for the appearance of those same ones and take their release into account in your trading.
The best time to trade Forex.
The advantage of working on Forex is that you create your own work schedule,
because the Forex exchange operates around the clock, except weekends and holidays.
That is, trading begins early in the morning on Monday and ends late at night on Friday; you can trade both during normal working hours and late in the evening or early in the morning.
When is the best time to trade Forex - in the morning, afternoon or evening, or maybe at night?
Forex history.
Currency exchange has been taking place since the emergence of these same currencies and the development of trade relations between different countries.
function was performed by money changers in the markets; in fact, they set the exchange rate depending on the purchasing power of a particular monetary unit.
An important role was played by the metal from which the money was made; gold and silver coins were valued by weight, others according to the same purchasing principle and equivalent to gold.
In a more civilized form, exchange began in the 19th century, and the history of Forex itself began only in the second half of the 20th century.
The history of Forex actually began with the advent of the Jamaican currency system, the main point of which was the liberalization of gold prices. As a result, the concept of a floating exchange rate appeared.
The essence of the Forex market.
An investor who plans to work on the currency exchange in order to make a profit must
have a clear understanding of what Forex is all about.
First of all, he needs to know that Forex (from FOReign EXchange) is a global foreign exchange market that was formed in the early seventies of the last century, immediately after the abandonment of fixed exchange rates and the transition to floating ones. The history of this transition is very dramatic and is directly related to the destruction of the Bretton Woods international financial system, which was based on the obligation of the United States of America to exchange its national currency (US dollar) for physical gold to anyone at a clearly fixed rate (at that time it was 35 North American dollars per 1 ounce).
When the United States unilaterally refused to fulfill this obligation, a need arose for trading platforms that provide the exchange of some currencies for others at free rates. This is how the foreign exchange market arose, without which international trade in goods and services could not exist normally. So, at its core, Forex is a global exchanger whose daily turnover amounts to billions of dollars.
Three components of success in Forex.
You have probably heard more than once sad stories of playing forex, in which traders lost their money, and the reason for this
was circumstances beyond their control.
Most of these stories are completely far from the truth, it’s just that people tend to shift their blame onto others, try to remember the last time someone you know said, “I did the wrong thing.”
It almost always sounds like - The boss, work colleague, wife (husband) and so on are to blame, and Forex is no exception; you can make money on it only with strict discipline and self-control.
There are three main components without which you simply cannot achieve success in stock trading:
Register for a Forex demo or real account in a few minutes
In order to start trading on a foreign exchange exchange, you first need to get on it. Many beginners think that in order to trade they
should register directly on the exchange itself, but this is not entirely true.
It is practically impossible to become a bidder on your own; this requires not only a lot of money, but also expensive licenses.
Therefore, all trading is carried out through intermediaries - dealing centers (brokers), they are the ones who provide the average trader with access to the foreign exchange market, while charging their own commission (spread and swap).
Forex registration itself and opening a demo account takes only a few minutes, after which you will have access to all the functionality of the trader’s trading account.
It will also be possible to download the programs necessary for operation.
Forex registration takes place according to the following scheme:
What is the essence of trading on the stock exchange?
You can talk about trading for hours and still not understand what the essence of this type of trading is.
Therefore, in this article I will try to outline the main points of trading as briefly as possible so that they become understandable even to a person far from financial activities.
The essence of trading is, first of all, speculative trading on the stock exchange with the aim of making a profit, not pursuing any other goals other than making money.
Trading is available to almost everyone with money and a computer with Internet access, regardless of their profession and education, and sometimes age.
In addition, the following main points should be noted:
Exchange instruments.
A person who decides to become a trader first of all has a question - what to trade on the stock exchange?
Indeed, in a modern trader terminal the choice is quite wide.
In total, there are about 100 stock trading tools available, and choosing the most suitable one is not so easy.
And often the entire success of a trader’s career and the amount of earnings depends on this. Let’s try to understand the main groups of assets available for trading.
Exchange instruments - shares of large companies, indices, precious metals, commodity and currency futures and currency pairs.
Features that you should consider when starting to trade Forex.
Any business related to making money has its own characteristics, without taking into account which you can make a lot of annoying mistakes, which will then
result in the loss of money.
Forex trading is almost always associated with a lot of money, so losses here can be more than noticeable for your budget, and you can lose money even where you have no idea.
Let's move on to the main issues without taking into account which it is better not to start stock trading.
1. Losses - losing on Forex is much easier than making money, especially for novice traders, so it is not recommended to trade with other people's money, borrowed or credited.
Education for working in Forex.
Most of my friends, having learned that I make money on Forex, ask - What kind of education is needed for this?
Yes, I won’t lie, I graduated from university with a degree in finance, and therefore I can say for sure what I learned from the knowledge I gained during my five years of study.
Practically - nothing, that is, everything that I used in stock trading can be learned within a week, mainly general knowledge regarding fundamental analysis and currencies.
What kind of education is needed to work in Forex?
Best time frame.
One of the main points when trading forex is the time frame; discussions have always arisen among traders on which time
frame is better to trade.
First of all, it should be noted that it is not the time frame itself that is more important, but the duration of the transactions, and what tab your terminal is open on is more important for analyzing and tracking the market.
Therefore, when making a choice, first of all, you should decide on your financial capabilities and the immediate goals that you set.
1. If you urgently need money and want to earn it using high leverage, there is only one way out - to trade using scalping, and these are short-term transactions from 1 to 15 minutes.
Page 1 of 2
- To the begining
- Back
- 1
- 2
- Forward
- In the end