Analyst blog

  • What Forex Trading Is All About

    The Foreign Exchange or Forex market offers the largest number of trading opportunities in the world. Every day more than $1.8 trillion in volume is bought and sold over the industry’s decentralized system. Given that FX investing is one of the newest ways to earn a profit online, the speed with which it has gained popularity is impressive. Forex trading involves comparing two currencies and deciding which is likely to appreciate more over a given period of time. This type of speculation features 5 unique reasons why currency pair trading is a great choice for beginning investors.

     

    Simplicity

    At its heart, Forex is comparing the performance of two economies, as represented by their regional currencies. For example, when the U.S. economic outlook is good, the price of the dollar goes up. Likewise, a strong U.K. economy boosts the Pound, and when the EU is doing well, the Euro is worth more. As a FX trader, you first need to look at financial reports and recent news to determine which of two currencies is likely to do better.

    You will then open an order by simultaneously purchasing the currency whose price is expected to go up and selling the currency whose price is expected to go down. When you are ready to close the order, simply reverse the transaction by selling the currency you originally purchased and buying the currency that you originally sold. Your profit is the difference in the price between the open and close of the order. This makes Forex trading one of the easiest investment opportunities to understand.

     

    Availability

    The Forex market is open 24 hours a day between 5pm EST on Sunday and 5pm EST on Friday. There are also dozens of currencies that can be selected. This means that no matter where you are located, or when you have free time free, you can always find an asset that’s available for active trading. Most other markets have much shorter hours or offer fewer choices. Some brokers even offer specialized software that lets you plan in advance to make the most of potential market conditions, by letting you create orders that go into effect if certain conditions are met. This way, you never miss out on a trade.

     

    Flexibility

    Unlike traditional stocks and commodities investing, in Forex, you are not taking physical ownership of an asset. Instead, you are only concerned with price differentials at the beginning and end of each trade. This format means that you can profit both when an asset’s price is going up, as well as when it’s going down. So, if you see economic news that makes you believe the Pound will lose ground to the Dollar, you can sell the GBP/USD currency pair. At the end of the order, you would buy GBP back at the lower price, and keep the difference as your profit. This gives you even more ways to make the most of your deposit.

     

    When beginners are searching for new chances at high earnings, these three things are a major part of why Forex is a good fit for most new traders. Another important part of successful FX investing is choosing the right broker. If you would like to learn more about making the most of simplicity, availability, and flexibility in your trading strategy, we recommend speaking with an Account Manager from GreenFields Capital. For more information on opening a Forex account, make sure to visit our web page.

    Click to read more
  • How Forex Traders Make Money

    Foreign exchange (FX or Forex) trading is a relatively recent way to make money from investing online. Unlike exchange-based methods such as stock and commodity trading, Forex involve taking advantage of the constantly changing prices for hundreds of currency pairs. To make a profit, you try to sell a pair at a price that is higher than what you paid to buy it. While this may seem simple, we’d like to explore a few easily learned techniques which can help you improve your results.

    Trading Calendar

    The most important way to maximize how much money you can make from Forex is to keep track of the trading calendar. FX pairs are basically a way to balance the performance of one country or region’s economy against that of another regional economy. This means that currency prices are tied to economic reports that are issued by governments on a consistent basis.

    Many brokers provide access to a calendar that can be used to filter upcoming reports that are expected to have an impact on a specific currency. Some Account Managers will also send out signals which will alert you to upcoming events. Make a note of these reports. You can then prepare your account so that you are ready to place appropriate orders as soon as you have decided how the market will react.

    Automated Trading

    This can be made easier by creating rules that will trigger order activity when certain conditions are met. Software, such as the popular Metatrader 4 (MT4) can now be used to place trades automatically based on customized rules you select in advance. You can also create entry and exit points for orders to reduce your losses or lock in profits. This will allow you to make the most of every market move, even if it occurs when you are not available to trade manually. Automated trading can also take some of the emotion out of trading, which is a common cause of reduced profitability.

    Trader Psychology

    So, of course our last piece of advice is to take the emotion out of trading! No one is perfect. The markets are unpredictable in their nature, so one unsuccessful trade is not a personal failure. Numerous studies have shown that the majority of trades are made in the right direction. For example, you buy the EUR/USD and the price subsequently goes up.

    Where novice investors, and unfortunately sometimes even professionals, mess up is that they stay in bad trades too long, and leave good trades too early. Decide in advance how much of your equity you are willing to risk on a single trade. Once you have lost that amount, close the trade and start over with something new. A good rule of thumb is to limit risk on any one trade to one percent or less of your account balance. Additionally, create Take Profit settings so that you can keep profitable orders open for as long as possible.

    Adding these three techniques to your repertoire will help you graduate from a beginner to a star Forex trader. After you have mastered these skills, you can add more advanced techniques which will allow you to climb to the top of the FX investor ranks.  If you are interested in more tips about how to enhance your trading outcomes, we recommend speaking with an Account Manager from GreenFields Capital. For more information on opening a Forex account, make sure to visit our web page.

    Click to read more
  • Is Forex Trading Halal?

    As foreign currency exchange has become more accepted, most governments have deemed it to be a legal form of investment and give oversight of these types of transactions to the same regulatory authorities who manage stock and commodities. While we recommend contacting your region’s fiscal authorities regarding the rules of Forex trading in your area, in general, investors will not be restricted based on local legislation. However, some individuals have personal reasons for being hesitant about opening an FX account. One major example is Muslim traders, who are concerned that open positions could lead to transgressing the religion’s prohibitions against making or receiving interest payments.

    Interest is an important part of standard currency trading because at the end of each day, each pair’s value is updated to reflect changes in the daily rates applied by the various central banks. This can result in account holders being given a small credit or debit based on the new rates. For some currency pairs, this revision is substantial enough that traders rely upon it as part of their strategy. Because the credit or debit is typically applied when one trading day rolls over into the next, the payment is usually labeled as a “rollover” adjustment.

    If Forex orders are subject to interest, and Muslim clients are unable to accept or pay interest, how can they participate in this type of investment? Once FX trading became popularly internationally, brokerages worked hard to come up with a solution. There are two ways that interest can be avoided. The first is managed by the clients themselves. The second is activated by special account settings created by the broker’s programming team.

    If a client wishes to trade a regular account without incurring interest, the easiest way is to make sure that any open positions are closed before trade rollover at 5pm Eastern, Sunday through Friday. Since interest updates are only made to positions that are being actively traded at this time, if there are no open positions, then you won’t be subject to these credits and debits. However, this requires the trader to be very careful about keeping track of their account. Also, if there is an emergency which keeps the client from trading, or a platform issue occurs at this time, it may be impossible to close the trade as desired. This answer can also mean closing out a winning trade early, leading to worse performance than otherwise could be expected.

    The other way to avoid interest conflicts is to set up an account which does not pay interest on open positions. Instead, the client either pays a per trade commission fee or agrees to receive a slightly higher spread. The spread is the difference between the buy and sell price of an instrument, and a higher spread makes it slightly more expensive to enter a trade. In either case, the client is then able to leave positions open without having to worry about interest fees.

    Islamic investors can trade Forex successfully if they choose the right trading method or account type. You should still expect excellent customer service from your broker no matter whether you have an Islamic account or not. If you would like to work with a trader who can provide a good experience we recommend working with GreenFields Capital. For more information on opening an Islamic account, make sure to visit our web page.

    Click to read more
  • Is Forex Trading Gambling?

    With all of its benefits, many people wonder whether forex trading is really just gambling, and are concerned that there is a hidden catch. However, unlike investment vehicles like binary options, there is already an established correlation between market news and currency prices. Therefore, those who are willing to do the research necessary to find the right assets and the best times to trade will soon see that this financial activity is not merely a matter of luck.

    FX trading involves buying and selling a pair of currencies at the same time. Traders want to buy the currency whose price they feel will go up and sell the currency whose price they feel will go down. Your profit is measured by how much the currency that you felt would perform better increased in value. If your selected currency depreciated, then you lose money.

    Because of the large number of currency pairs that are available, it is easy to find an option that represents your preferred level of risk based your knowledge of the market. The most popular currencies are the U.S. dollar, the Canadian dollar, the Australian dollar, the British pound, the euro, the New Zealand dollar, the Swiss Franc, and the Japanese Yen. Most actively traded currency pairs are based on at least one of these currencies, with almost 85% of the transactions involving the U.S. dollar.

    Because each of the most popular Forex currencies are associated with a different region, it is not hard to look for news related to the underlying region and then project whether this will cause the country’s economy and monetary units to go up in value. This is one reason why traders tend to rely on reports released by governments related to unemployment, GDP, and consumer confidence, in order to determine the strength of the USD, CAD, JPY, etc., prior to placing a trade. This type of research is called fundamentals analysis.

    After several years, investors realized that the markets were often cyclical, with periods of highs and lows that could be determined by carefully examining previous trends. By looking for patterns in charts and then finding how those configurations related to price movements, traders eventually created indicators that can flag potential shifts. This trading is referred to as technical analysis, and often relies on things like candlesticks, bar graphs, and oscillators, which tell when is a good time to buy or sell a specific pair.

    Learning how to use both fundamental and technical analysis can greatly improve your success rate. Most traders profit the most when they stick with a relatively small number of Forex pairs, and keep up to date on building a diverse portfolio. Now is a great time to explore the investment opportunities offered by a respected platform such as that provided by GreenFields Capital. For more information on pairs trading, make sure to visit our web page.

     

     

    Click to read more
  • How Can I Decide Between Bitcoin and Forex?

    In the last decade, Bitcoin has gone from being an unknown method of payment used by hackers and cyber criminals to a legitimate method of investment. The benefits of using alt coins like Bitcoin include freedom from government control over the currency’s value and anonymity of ownership. The rise of decentralized cryptocurrencies has created a popular alternative to fiat currencies like the dollar. Nevertheless, there are still significant issues that investors should be aware of when deciding whether to focus on Bitcoin or more traditional Forex trading.

    These alternative forms of funds transfer are based on using computers to solve complicated puzzles to produce digital assets, in a process called mining. As new coins are mined, the cryptography algorithms keep track of their location, but do not log the name of the owner of the coin. At first, the advantages of this level of privacy were noticed by people working in the black market. Then, as countries across the world began seizing private savings to make up for budget deficits, regular citizens also sought out other places to store wealth. While Gold tends to serve a similar function, Bitcoin and other altcoins like Ripple and Ethereum have an additional plus, as they can be exchanged within minutes from anywhere in the world via the internet.

    Eventually, online CFD brokerages such as GreenFields Capital began to include digital currencies within their collection of tradeable assets. With this type of investment, you don’t need to take physical possession of the asset, you merely trade on the price fluctuations. Bitcoin, like traditional Forex pairs, has no regulatory authority who oversees setting prices. This encourages volatility, which is a primary driver of profitability. However, online traders do receive some signals regarding reasonable exchange rates for different pairs, based on how the central banks which issue the underlying currencies set interest rates or carry out financial policies.

    In contrast, Bitcoin prices are dependent almost entirely on the opinion of the market regarding its value. This tends to become a self-fulfilling prophecy. Investors looking for alternative ways to earn profits push the price of Bitcoin higher, and then more investors follow to take advantage of the resulting uptrend. This continues until there is an event which causes a sell off, which then sets off a major drop in prices. Bitcoin has faced this cycle several times since its creation in 2009. Some events which have triggered declines include news of security breaches, failures of large cryptocurrency exchanges such as Mt. Gox, and government crackdowns on the use of Bitcoin, which happened in China in 2017.

    When choosing between investing in Bitcoin and Forex, traders need to understand a wide range of variables which govern the potential fluctuations in earnings. The current geo-political situation, upcoming reports from government agencies, and even seasonal considerations, including major shopping events like Cyber Monday or year-end tax avoidance activity, can all affect both assets. We recommend speaking with an account manager to get a complete picture of how to choose the best investment according to the market cycle and your individual needs.

    Click to read more
  • What are Indices?

    When analysts refer to the “stock market”, they are usually referring to one of the major stock indices, like the Dow Jones Industrial Average, S&P 500, or the London FTSE. Indices are based on the average prices of many selected stocks from a given country or region. Sometimes, the companies are included because they are the largest corporations in the area. Alternatively, they may be chosen to reflect a wide variety of industries.

    Unlike the stock price of a single company, the value of an index is a measure of a region’s business environment as a whole. However, how well this is accomplished is related both to the stocks which are chosen, as well as to how their prices are weighted. For example, the DOW, arguably the most well-known member of this group, only contains 30 companies. Additionally, there is no adjustment for a business’s size when averaging the prices. This means that uptrends and downtrends for smaller brands with high stock prices, such as Visa or IBM, can have an outsized effect on the index.

    There are many popular exchanges which reflect their local business makeup. In the United States, the major indices include the DOW, S&P 500, and the NASDAQ. Europe has London’s FTSE, the German DAX, and the French CAC. Traders interested in the Asian market usually work with the Shanghai Stock Exchange, while investors with a focus on the Middle East pay attention to the Tadawul Exchange.

    One way to avoid this is to use a more diverse basket of companies and to give each corporation’s stock price a different weight, related to its size. The S&P 500 is named for the amount of stocks that are included in its list. This allows more representation from the different sectors that contribute to the U.S. economy. Market capitalization also leads to a higher relevance between the index’s value and the movements of its most important members.

    Investors who work with indices tend to predict price movements using the same tools as those who work with single stocks. However, it can be difficult for fundamentals traders to track quarterly earnings reports and market news for such a large number of companies. This has led to an increased use of charts, candlesticks, and technical indicators such as the Relative Strength Index (RSI) to figure out when to place buy and sell orders.

    Every index offers traders a simple way to turn stock market performance into a profitable opportunity. Many CFD brokers are even letting clients trade cryptocurrencies like Bitcoin against exotic assets such as oil or gold. We recommend trading this type of asset on a respected platform such as that provided by GreenFields Capital. For more information on indices trading, make sure to visit our web page.

    Click to read more
  • Why Invest in Stocks?

    While some businesses operate solely from their proceeds and reserve capital, others need to raise additional revenue to cover debts or to create the capital needed for growth. One way for a company to create money is to become a corporation and sell parts of itself to the public. These parts are referred to as stock or shares.

    When a company “goes public”, an initial valuation is set which covers both the number of shares that are for sale, as well as how much these will be worth in total. After this, however, investors value a corporation based on how much stock is available for sale, and the general perception of how well the business is performing.

    When a company is doing well, or even when it does better than expected, its price is likely to rise. When a company does badly, or fails to meet analyst forecasts, its value typically goes down. People who focus on this type of venture try to predict price movements so that they can buy when the prices are low, and sell when the prices are high, in order to earn a profit.

    There are several indicators that people can rely upon to determine the direction of potential price changes. Some individuals focus on fundamentals. This involves looking at quarterly and annual earnings reports and watching for news events such as major production increases or layoffs which could have a positive or negative impact on the company’s bottom line. Others are more interested in technical reports. Technical specialists work with charts to try and find mathematical patterns which signal good times to buy and sell.

    While investors have been buying and selling stocks for centuries, the rise of the internet and personal computers has changed this type of trading significantly. Until recently, most people needed to work with a broker, who often took a significant commission in exchange for arranging for transfers between buyers and sellers. Additionally, stocks were typically purchased without the use of leverage, meaning that the buyer had to raise the full value of the shares before completing the purchase, making this an activity that was primarily for the rich.

    However, individuals eventually gained more direct access to stock sales, resulting in increased popularity. Beginning in the 1990s, CFD trading also allows profits from price movements without needing to take physical ownership of the underlying instrument. This type of transaction could also be done on margin, letting investors enter into contracts by putting down only a fraction of the original value.

     

    Stock sales continue to offer an excellent way to profit from knowledge of a given company’s performance. Now is the perfect time to start trading on a respected CFD platform such as that provided by GreenFields Capital. For more information on buying and selling shares, make sure to visit our web page.

    Click to read more
  • Why Should I trade Currencies?

    Forex trading, or currency pair trading, is one of today’s most popular investments thanks to advances in online technology. In this type of investment, orders are opened when you buy one currency while simultaneously selling a different currency. Closing the order then requires you to sell the first currency while purchasing back the second. The goal is to take advantage of changes in the prices of the two currencies, which will hopefully leave you with a profit after the order is completed.

    While there are several currencies that can be traded, most transactions are based on combinations of the following eight options: the U.S. dollar, the Canadian dollar, the euro, the pound, the yen, the Swiss franc, the Australian dollar, and the New Zealand dollar. The price of each currency is based on the strength of its underlying economy. Therefore, Forex trading ultimately involves comparing the relative strengths of two countries or regions to determine which is likely to be the top performer.

    Experienced Forex traders keep track of several indicators when predicting price movements. Information on the U.S. economy are the most influential because the U.S. dollar is a part of about 85% of all currency trades. Some popular reports which can affect the dollar’s value include the monthly Non Farm Payroll figures which cover employment rates, announcements from the Federal Reserve regarding interest rate changes, and monthly analysis of the size of the U.S. economy, commonly referred to as Gross Domestic Product (GDP). Every country or region produces similar reports which help investors decide the likely direction of the related currency.

    Forex trading only became widely available to the public in the 1990s when the internet and personal computers allowed traders to place orders through a decentralized system. Prior to this, currency trading was only an option for major banks, also called Tier I banks, because of the specialized tools and high volumes needed to participate in the exchanges. These interbank transactions still account for the largest portion of Forex trading. However, smaller brokerages eventually stepped in to pool orders and served as intermediaries between individual traders and Tier I banks.

    While competition has reduced the costs associated with trading currencies, there are still a few fees that traders should keep in mind. One cost is called the spread, and it is built into the prices quoted for each currency pair. The spread is the difference that exists between a pair’s buy price and its sell price. Because you must buy and sell the currency pair, you are impacted by this difference right away. To make up for this loss before the order closes, the pair’s price must move enough for you to make a profit.

    Traders should also watch for rollover. This is an interest charge applied to trades that remain open between one trading day and another. The trading day ends at 5pm Eastern time. Rollover is calculated based on changes in rates announced by each currency’s Central Bank. Because this rate can go up or down, you can receive a credit or a debit associated with your open trades. Occasionally, some brokers also charge commissions or transactions fees to process orders for their clients.

    Forex trading is a simple way to profit from investing online. Many CFD brokers will even allow clients to use leverage, which means that you can open a trade with only a small portion of the order’s actual value. Now is the perfect time to start trading currencies on a respected CFD platform such as that provided by GreenFields Capital. For more information on Forex, make sure to visit our web page.

    Click to read more
  • What are Cryptocurrencies?

    Cryptocurrencies, also known as digital currencies or altcoins, are a relatively new type of asset. They are decentralized and do not have oversight by any outside authority, unlike fiat currencies such as the dollar or euro. The first popular one, Bitcoin, was created in 2009, and now has hundreds of competitors, such as Ethereum and Ripple. While these payment methods were first viewed primarily as an anonymous way to transfer funds, they are now more mainstream thanks to increased global acceptance.

    Digital currencies are usually created, or “mined”, using powerful computers to solve difficult algorithmic puzzles. There is an electronic ledger which tracks when a new coin is created. The ledger also has a record of the location of each coin as it is transferred from person to person, but the actual name of the person who owns the coin is not listed. Individuals can also buy altcoins through peer-to-peer networks where the price is set by an agreement between the parties.

     

    Ancient cultures such as the Egyptians, Greeks, and Romans created easily portable coins that could be exchanged for goods and services. However, consumers soon realized that government backed money could easily lose or gain value based on the policies of those issuing the credits. For example, let’s say the value of a single unit of a country’s currency was originally worth 0.2 percent of the total value of a country’s net worth. Then government decides to create twice as many coins to pay its debts, without increasing the country’s productivity. Each coin is now worth only 0.1 percent of the country’s total net worth, leading to an immediate loss in its value and buying power. This loss of value and subsequent rise in the price of goods and services is called inflation.

    Governments can also influence the value of a currency by making it harder or easier to borrow money. They do this by changing the interest rate that the country’s national bank, normally referred to as a Central Bank, uses to lend money to retail banks. When interest rates are higher, these retail banks can offer better returns, and foreign investors buy more of the country’s currency, once again increasing its value. On the other hand, lower interest rates reduce investment and cause the currency’s value to drop.

    For those interested in cryptocurrencies, the ability of a government to influence the value of the local currency is problematic. If the country runs into economic difficulties, or has a political upheaval, those in charge can easily take control of the local money. Depositors in several European countries learned this the hard way during the recent global recession, when pensioners were forced to turn over all or most of their retirement funds to the state to help with budget shortfalls. Because cryptocurrencies like Bitcoin were not held in banks under government control, these funds were kept safe from seizure.

    The rise of online trading has allowed investors to profit from price movements in cryptocurrencies, without having to physically purchase the underlying altcoin. Many CFD brokers are even letting clients trade cryptocurrencies like Bitcoin against exotic assets such as oil or gold. Now is the perfect time to start trading cryptocurrencies on a respected platform such as that provided by GreenFields Capital. For more information on cryptocurrency trading, make sure to visit our web page.

    Click to read more
  • Visa – a Core Stock for Every Portfolio

    Quick Facts about Visa

    Visa is one of the most successful IPOs in modern history. Since Visa went public at a split-adjusted price of $11 per share in 2008, it has risen by more than 800%.
    It operates as the world’s largest retail electronic payments network and is one of the most recognized global financial services brands.
    Visa facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities.
    Visa has more than half of all credit cards’ market volume, and about 70% of all debit card volume.
    It has number of unique potentials as an investment tool.

    Earning Results & Achievement
    Visa Q3 earnings results show a fourth quarter in a row, where the company exceeded expectations for both revenue and earnings. This also marked the twelfth quarter in a row, where Visa surpassed its earnings potentials.
    Visa Q3 achievements: 38% payments volume growth, 44% increase in payments transactions, 26% increase in net operating revenue.
    Q3 achievements have demonstrated that the company is effectively growing at an above average pace. With the global economy expected to grow 2.7% in 2017, and 2.9% in 2018, Visa’s outlook remains positive, and after the last strong results, we are expecting the stock to drive higher in the next few months.
    On the technical point of view, the stock has broken the resistance at $98.2 and passed the $100 barrier. Thus, we should look at the resistance at $98 – $98.2 as an important point for the continues positive trend.
    With that in mind, it is not surprising to see that Warren Buffett owns 10.56 million shares of Visa that equals current market value of $938.6 million. This represents 0.56% ownership in the company.
    In conclusion, Visa may be considered as one of the biggest companies in the industry. Its major risks could involve the rise of the new payment methods. The investors can expect Visa to generate high earnings. Therefore, larger dividend growth is expected in the future.

    Click to read more
To see more articles Click here
X
Email:
Password:
Forgot Password?
DON'T HAVE AN ACCOUNT YET?