4 Good Reasons To Look At Forex As An Investment

Pips Wizard Pro

These days there are many investors wondering if they should trade the Forex market or not. Many of them believe that Forex is only for large financial institutions, but this is not the case. While there are certainly plenty of big financial companies in the market, there are plenty of small investors in this market also. In reality the Forex market gives equal opportunity to small and large investors.

There are a number of reasons why you should consider putting money in foreign currency. Here are 4 of the best:

Liquidity

The Forex market is very liquid. To give you an idea of the size of the market, an average of $3,200,000,000,000 changes hands around the globe every day in the currency market. Whereas with the stock market you might have trouble getting rid of your investments, this will not be an issue with currency. In other words, there is less chance of getting stuck with an investment as it plummets.

Cheaper

The liquidity also gives you the chance of tighter bid/ask spreads. This means you will minimize the expenses of investing. The majority of broker platforms do not make you pay an individual cost for every transaction, because they earn their money by the spread from the quote for the various currencies.

Save Time

There are lots of Forex trading robots that will actually make your investing decision for you. If you use them then you can earn passive income, because you never have to touch them. Just keep in mind that you should not trust these robots for 100% of your Forex investments. If you have the time, it would definitely be advisable to invest yourself, because a human investor is always more profitable.

More leverage

As opposed to many other financial markets, the Forex market gives you huge amounts of leverage when investing. An investor with just $200-300 can often invest $10,000s of money in the market. But while lots of leverage can make you a huge amount of money, you can also lose a lot as well. So be cautious when using leverage.

Conclusion

Forex trading can be very profitable when used correctly. Investors globally are turing to it as an investment vechicle with stock markets becoming more and more uncertain. Above are 4 reasons which might make you consider putting your money into foreign currency. Just make sure to start slowly and learn as you go, and you will increase your odds of success.

Author Pete Southern is an active trader of forex and stock markets. Pete submits market reports to many online publications like www.forexrate.co.uk and is avid follower of the economy.

Strategies For Investment In Oil Futures

SetForget Pattern Profit

Movements in oil prices are very volatile. This will not change in the near future either as political and economic worries continue across the globe. Factors such as pipeline or supply disruption, conflict and war are just a few of the reasons why prices can fluctuate widely. If you are trading oil futures it is essential to take steps to protect your investments.

Hedging Your Profit

If the price of oil is fluctuating rapidly it means there is more risk in the market. To account for the added risk traders need to adjust their investment strategy accordingly. Many traders of oil futures look to hedge their positions in the event of volatility. By staying flat on their position and locking in profits allows them to ride through uncertainty and trade out of the position when a stable trend resumes.

Following the Trend

Anticipation of futures prices all depends on direction of the trend. Using a trend following strategy is not always easy in oil trading because of its wild swings however it is proven that when a direction is clear trend following is a very profitable way to trade. Many futures traders look for seasonal effects on prices of oil. Colder times mean higher demand and higher prices, warm means the opposite. There are many other regular patterns which can be forecast over the longer term for those who adapt to this style.

Day Trading Oil

If a trader is looking for shorter term investments in oil futures then they will encounter a very volatile environment. Huge intraday spikes can occur on inventory data being released. Any trader adopting this strategy needs to be aware of the risk that the market can swing against them fast. Protective stops and limit orders are essential to get out of a trade with profit or minimal loss.

Short term traders also need to have charting software. Plotting the oil futures price onto a chart can show them previous levels of support or resistance where the price has turned. Often the price will stall at these areas before deciding its next move which throws up opportunity to hop on board and profit from a ride in a different direction.

As with any investments traders must stay ahead of the news. Keeping up to date with political matters and economic data is essential to having a view on direction. It’s been seen time and time again that news drives prices, often wildly, in the direction of the trend. Don’t fight sentiment, go with the direction and trade the news.

To help keep ahead of the trend www.futuresforecasts.com offers daily directional forecast charts. The site is free and can be a useful guide to the futures market.

Currency Wars: A Valuable Economic Resource and Insightful Read

Books about finance don’t come more riveting than Currency Wars by James G. Rickards. Part novel, part non-fiction, the Currency Wars book explains in chronological order the global wars fought over the decades, not with guns and oil but with currencies. In doing so it lays down the foundation for the next forecasted world implosion, which although is sparked by imagination is alarmingly full of insight and probability. Currency Wars reviews have applauded his work, with US Today commenting that it is, “Outside-the-box thinking…an important contribution to the nation’s economic dialogue…an invaluable resource”. Others speak with more trepidation about his predicted financial threats.

Currency Wars: Section One

The Currency Wars book is split into three sections. The first section has the characteristics of a novel as opposed to a financial book. In the section the author Rickards describes in detail his participation in an activity at the Warfare Analysis Laboratory. Usually the group is used by the defense department to simulate war games for planning strategies. However, the activity that Rickards was involved in had nothing to do with on the ground military action, rather military, academic and government interests participated in a simulated currency war that used currencies and capital to bolster power in certain regions. He contributed to this ‘currency war’ by offering advice on the markets. I won’t tell you what the outcome of the war is.

Currency Wars: Section Two

The second section of the book is more historical and outlines the events and conditions that led up to the first two currency wars (named CWI and CWII) in the twentieth century. Rickards also provides some valuable insight into the motivations that drove these wars. According to the book Currency Wars, CWI was fought between 1921 and 1936 and CWII between 1967 and 1987. Both of these wars were waged between countries of competing national interests. These currency wars forced competitive devaluations and government interventions with global finances.

Super Profit Scalper

Currency Wars: Section Three

It is noteworthy that gold reappears throughout the Currency Wars book. According to Rickards, the currency wars were largely caused by the end of the Gold Standard in the global currency market after World War II. It also comes into play in the final section of the book where he gives his explanation as to why the world is now fighting CWIII. He also analyses in details the possible outcomes of CWIII (paper, gold and or chaos), giving the reader much to think about after the book even after the book has been put down. Currency Wars does not only target those concerned with finance, but also those who are interested in the future of our world and who enjoy solid and insightful speculation.

Penny Munroe is an avid writer in currency trading news and tips and aims to encourage any currency broker or trader to practice responsible trading. Her interest in currency markets started after she opened her own Forex trading account with a foreign currency broker.

Understanding and Using CFD Trading Strategies

Pips Wizard Pro

CFD Trading Strategies – The Advantages

Contract for Difference is a derivative used in the financial markets and is a commonly used tool in trading Forex. The CFD is a part of the trading strategies of many Forex traders due to its reliability and effectiveness. There are many reasons as to why the traders use the CFD Trading Strategies.

  • It allows you to hold a position without having to rely on financing. When the day ends, you can hold on to the position you had without taking any actions overnight. It is a great way to continue and consolidate a strong position in the Forex market for any trader.
  • The leverage that you can enjoy is one of the best. There are few other marketing tools which offer you so much leverage in Forex trading. You can trade in amounts far greater than you have in your account, without having to replenish it. This gives you the opportunity to make a far greater profit.
  • The Forex market is the most liquid financial market in the world and the liquidity can be enjoyed by you through a CFD trading strategy. You can enjoy a far deeper level of trading with the increased liquidity that you have.
  • The costs of trading will be lower than the other trading strategies because the commission rates which you will be paying are comparatively lower. This means that you can enjoy the services of a broker without having to pay too much money.
  • Quick movements in the Forex market due to high volatility enable the traders with CFD strategies to make profits without having to sit all day and watching the gradual movement of the prices. They stand to benefit far more from sudden movements.

You get to save time and energy which you would otherwise spend sitting and staring as the information is displayed on a screen in front of you.

How to Use the CFD Trading Strategies

With all these advantages, the CFD trading strategies are bound to be a popular choice for the Forex traders. Many of them have been using such strategies and making hordes of money through it. However, there is no guarantee that you will end up becoming rich by using CFD. There is no defined formula which you can use and make a profit through CFD. The leverage that you enjoy gives you a stronger position than you would enjoy otherwise from which you can use your skill to trade strongly. In fact, you will be able to know when you should enter and when you should exit the market.

The best thing about CFD Trading Strategies is that they allow you to carry over the advantage that you are enjoying from your position today. This means that when you return tomorrow, you will be more or less in the same position on which you stopped yesterday. The maximum effect of this can be seen in borrowing. Any amount you borrow today will have to be paid the next day but the amount of interest that you pay on the borrowing will be the one that was levied when you made the original borrowing.

Small Change, Big Profit

Another benefit is that even a small change in the market entitles you to a great profit. A prerequisite is that you should be in a position from where you can take advantage of the momentum shift. For this to happen, you have to withdraw your profits on a daily basis. A shortcoming here is that the fees and other costs you incur will be deducted from the profits. The amount that you receive each day will be significantly lower than if you waited for it to accumulate for a while before receiving it. However, you will be able to minimize the risk and be in a position from which you can maximize the profit from even a small price change.

Get your Forex no deposit bonus right now! Visit our Forex bonus page to discover more bonuses.