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CFD Trading Strategies: 3 Critical Factors To Profitable Forex

CFD Trading Strategies: 3 Critical Factors To Profitable Forex

Forex, understandable a trading of two international or two foreign currency exchange speculative market, is as old as the existence of money as a means of exchange for goods or services. The difference in their accessibility to the ordinary man is the availability of enabling technology with time. In other words, when the transaction was exclusively between countries and major banks, trade was so limited.

Nowadays, with internet technology and advancement in modern trading tools, almost anybody can now trade. The situation has been further enhanced with the leveraging power of Contracts For Difference (CFD). Specifically, this article is a focus on CFD trading strategies. The critical factors being discussed here would lead to profitable Forex trading if implemented.

  1. CFD Trading Leverage

A leveraged stock market opportunity that gives you access to greater funds than trading actual stock market. With CFD trading, you do not have to pay for the full value of the trading position you have chosen. Rather, you put up a deposit or margin, from as little as 5%. In other words, a trader can leverage his/her trade up to 20 times the initial capital.

  1. Develop a Trading Pattern That Suits Your Personal Profile

Educate yourself properly. A good CFD trading plan is critical to your success on a long term.

Identify what you are good at and keep it

CFDs can be used to trade an extremely wide array of financial products and this means they offer a way to easily start dealing across a large cross-section of the market. For example, a trader that has interest in shares, the level of the price of oil, or the exchange rate of the British Pound against the US Dollar, can deal in all these markets from one account of a single CFD provider.

  1. Use Stops Religiously

Stops enable you to protect your worse-case scenario by limiting your downside (unless the stock caps considerably).

Stop loss that limits the downside – A stop loss order is an automated instruction given by the trader to deal if the price runs counter to speculation. A stop order can either be attached to an existing position, or it can be used to initiate or start a new position.

Summary: As a leveraged (instrument) system of trading, CFD is arguably the most powerful. The benefits are enormous if well planned, and losses could be overwhelming if trading position is not well articulated. CFD trading strategies as discussed in this article is an analysis of 3 critical factors to profitable Forex. These strategies work and would always work if well implemented. Give them a try.

Keeping Your Losses At A Minimum

Keeping Your Losses At A Minimum

We once wrote a little piece about keeping your losses to a minimum since letting a losing trade get wildly out of hand will cost you dearly. So we got a question we’d like to share with you:

“I agree with your concept of bailing out of a trade quickly before it snowballs into something ugly. I think that is why we use stops. But I have a question about that. What do you do if you buy a stock on Monday and it ends the day right about where you bought it. But then Tuesday it opens down 50 cents and falls from there, hitting your stop. Do we let the stop take over?”

What a good question and the answer is going to need some explanation. We don’t usually like to get too involved with the first half hour of trading. It’s that first opening 40 minutes of trading where the overnight market orders are getting processed, where the morning’s economic data is getting “knee jerked around” and overall it’s usually a good time to avoid.

So, what does one do when a stock opens the next day and it’s at your stop? In general terms the best thing to do is ignore your stop. Why? Again, the market is at it’s most volatile during that open, and more times than not the first few moves are not indicative of what’s going to happen for the course of the day. Even if it is, we usually see a decent bounce once the initial move takes place.

In other words, let’s use an example. You buy XYZ on Friday. You pay 20 for it. But Friday night it closes at just 20.02. You had set a tight stop at 19.70 . So, Monday morning we see the market’s in a bit of a funk, the futures are a bit red, and sure enough XYZ opens at 19.70 and starts inching lower. In 5 minutes it’s 19.60. If you honored your stop, you just lost 30 cents.

Now let’s say it’s going to be a bad day. After trading down to 19.60 XYZ bounces and gets to 19.90 but then starts fading. The market is soggy. It’s now 10:10 am and XYZ is sliding back down. If it hits 19.70 we’d take it off the table and bail. Yes, you took a loss, but it’s just 30 cents and at the end of the day GLXX is at 19.50. You did well.

Now let’s say that instead it’s the kind of day where the morning’s funk wears off. Again, you bought at 20 its opening at 19.70 it trades down to 19.65 and then “levels out”. By 10:10 the market is perking up. The DOW just went green. The NASDAQ is perking up. XYZ is now 19.85 and inching higher. You hold it and find that when the final bell rings, XYZ is at 20.15. You won.

The key was to not get stopped out at the open in either case. When a market opens sour and we’re already underwater at the opening bell, we take the mechanical stops off. We want to see if it’s really going to be a bad day, or if it’s just morning funk, and you cannnot know that until some time passes.

Certainly you don’t want this to get out of hand! We mean if it opens at your stop and then ten minutes later it’s down to say 19.40, we’d probably sell the first meaningful bounce and wonder what the heck went wrong! But you understand what we are saying. We rarely if ever will sell out at the open. You can usually “do better” by waiting for a bounce, and there’s always a bounce. If the bounce holds and the market is warming, chances are you’ll end up back in the green or at least, down just pennies. It’s not easy to watch, but getting taken out on a gap down will usually find yourself kicking yourself.

Options For Fixed Income Funds And Fixed Income Security

Fixed Income Funds And Fixed Income

These days there are many options available to help you stretch your dollars further. Using fixed income funds to help supplement your monthly income is a good choice for those who need a little bit extra each month. When you have to survive on a specific amount each month it can be difficult to meet all of your obligations.

Determining the amount you need to have coming in each month is important. There are several choices for creating a fixed income that you will receive each and every month. You will likely find that you need to use a broker to help you with this process.

When working to determine which firm to use, you will want to check their credentials as well as their history. Customers who have been satisfied with the service will be more than happy to tell you about their experiences. At the same time those who have not been satisfied are also likely to give you that information.

Selecting the right investments is the biggest part of this process. Finding those that will provide you with a fixed amount each month through interest payments is important. Brokers are well aware of the options that are available and can help you make the right choices.

Many people today are very hesitant about investing as there have been numerous issues over the recent history. These issues have resulted in significant losses for investors which make people be more cautious about investing in general. Using the options available for fixed income funds can be very helpful.

When you begin this process you want to determine how much fixed income security you need. This step helps you to rule out those that will not offer enough. After that you need to determine how much you need to invest to reach the goals that you have set.

Deciding to use fixed income funds for a fixed income security investment is a big decision. You first need to determine whether or not you will have the available funds to make the investment. If you do not have a personal portfolio already, you will need to work on creating one of course.

Once you have determined the needed amount of fixed income funds you wish to receive, you need to find a broker to help you create your fixed income security. There are several good choices that you might make. When considering the options you will always want to check references to ensure you are fully protected against loss.

Different Ways Of Gold Investments

Different Ways Of Gold Investments

There are different ways of investing in gold and this really depends on what you can afford. Gold investment is a very wise thing to do. Coins, bars and exchange traded funds are different ways of gold investments. Gold bars are the most traditional way of investing. These can be bought and sold in major banks over the counter. Bars are accessible in several sizes.

We can hold these bars directly by keeping it to ourselves or by keeping it in a vault on our behalf. Coin is another way of investing. It is a popular way of holding gold. Bullion coins are priced according to its weight plus premium. Most people invest in gold coins because it’s less expensive and easy to store.

Gold exchange traded funds are traded like shares. These are fully backed by gold which is deposited and insured. The account of gold is managed by buying and selling gold in the open market. These ways reflect an easy way to gain exposure to the gold price without inconvenience. Small commission is charged for trading in gold funds. Economies of scale, liquidity, and ease of buying and selling of these funds make this method a very easy method of investing. These gold investments are a very popular method.

Having gold accounts is another gold investments method. Gold money is a digital gold currency provider. We can have these accounts too instead of having to keep it physically. Derivatives are another popular way of investing in gold. Derivatives such as gold forwards, futures and options can be used every where. In the US gold futures are mainly traded on the New York Commodities Exchange. It can be traded else where too.

Mining companies do not represent gold but they are shares in gold mining companies. For instance if gold prices rise hen profit of the gold mining company might rise and then the value of share will also increase. Unlike gold bullion, unhedged gold shares are regarded as extremely volatile and risky.

The intensification of gold mining profits during times of rising prices can cause gold rush in mining industry. To decrease this volatility many mining companies hedge the gold prices. These are different ways if investing in gold. We can store them or keep them in the bank. During crisis this asset helps us and in a way keeps us out of any monetary crisis. We can choose any of the above methods depending on what best suits us or our gold portfolio.

The Best Funds For You

The Best Funds For You

Stocks and shares scare most people, so it obviously would not be smart to invest our money in something that we don’t understand or are not sure about. There are of course several safe investment areas available to us, but we are required to understand and analyze these as well before we simply invest our money. We need to be smart about our investments and put our money into investments that would give us the highest returns. While investing through big investment companies may seem like a good way to gain returns, we have no control over the gains we earn.

Mutual funds performance is out of our hands, and we are unable to customize these funds according to what we need and require. There is also a high fee to pay to avail of these services and the time taken to get returns is long and uncontrollable. Even though there are several types of mutual funds available to us, the drawbacks of all are the same, so people who are looking for safe returns fast are at a loss in the mutual fund market.

For people who are still looking to make collective investments, the safer option would be the Index Fund. This type of fund is different, as it aims to recreate the movements of a specific market, and market conditions are not very important. To avail of such a fund, the fee required is minimal, however returns are not minimized.

The low cost of this fund makes it appealing and also accessible to people who are at the lower end of the income bracket. It is also easy to manage these funds, and the investment objectives of such a fund are easy to understand. These funds are simply rebalanced every six months or every year. Style drifts are not possible with these types of funds, so diversification of a portfolio is more accurate and can easily be increased.

The turnover expected from these funds is lower, as they are passive funds and not active funds. This means that capital gain taxes are not applied to these funds and so the investor need not pay the taxes that would come along with a high turnover rate. Investing in different types of funds eventually lies on the person and what kind of returns there are looking for, but in the end the safer way to invest would be through a fund that offers higher returns with low investments, and has a nearly hundred per cent accuracy rate of being able to predict the returns a person will gain.

Top Funds to Increase The Alpha in Your Folio

Top Funds to Increase The Alpha

The need of the hour or more rightly each hour seems to be minimizing risks and maximizing profits. In order to quench this wish the investors start a drive to identify stocks that yield them a full alpha. Theoretically Alpha is the surplus return of an asset in correspondence to its benchmark index.

Aggressive and advanced strategies to manage investments in a portfolio call for high risk methods. Only a few would want to adopt this approach after the markets facing a brunt of the European crisis. One clever method is to benefit from disclosures made by some of the brightest minds through 13F Declarations; all big institutional investors or hedge fund issuers who have more than $100 million worth of transactions are directed by Securities and Exchange Control [SEC] to make their top equity assets public after the end of each quarter within a stipulated time frame of 45 days.

GURU ETF scouts for the best of the stocks that are declared by the top money managers in their 13 F listings, and then picks the best of the lot (all under equal weight age) through logical calculations of a trade mark data software . This data program is developed by AG& G Structured Solutions, Germany; the same company is responsible for making similar systems for standard benchmarks like S and P.

Investors can research through 13F filings themselves as these declarations are made public, one may find good online references on or, those who deem it as unnecessary can directly invest in a fund that gives you a stable and equal exposure to the top 50 picks that are available among the assets of the best hedge funds worldwide and delivers as per the performance of the Solactive Guru Index.

Your portfolio will reflect big names without paying high expenses of 2% plus a 20% on profits which is a norm with most good hedge fund investments. The annual expenses with these benchmark bound ETFs hover around 0.75% – 0.80% and low operational expenses is one of the biggest winners for this product and main reason for growing investor attention towards it.

A top hedge fund holding ETF follows a reshuffle quarterly, after the hedging managers make their equity disclosure; the fact doesn’t go well with some skeptics who believe that at the time of the declaration, the stock may not be as attractive when the fund bought it as the news is almost +4 months old. Other notable downside could be that the better stocks are not given higher weight age.

Being pure play products, most hedge fund ETF assign 2% asset-allocation to each security due to the exposure uniformity in the benchmark itself.

Stocks that are acquired are understandably among the best in the world. Dependence on technology is third highest and along with the heavy weights like Google Inc. and Facebook equities like the magna chip semiconductors and NXP semiconductors are also included. Heaviest sectors are the financials and industrials; together they make up for the 38% of the Index.

The guru index and its related funds were introduced in 2012 and its past performance has been quite encouraging. Although since inception, the index has delivered a cumulative return of 23.41%, what it will churn out in the long term future remains to be seen.

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