5 Key Factors to Consider When Choosing an Online Broker
/Lydia Wanjiru/ -- An online broker is quite essential for every investor. It is imperative to carry out a research to determine who an ideal online broker is. Here are a few factors to consider before you choose an online broker: 1. Minimum Initial Investment Most brokerages set a minimum initial investment or money that has to be deposited into the account to start trading. You can pick the best brokerage in the industry but fail to meet their minimum investment requirement. It is therefore vital for an investor to find out whether the amount of capital they have is sufficient to trade with a particular broker.
4 Basic Guidelines Useful in Trading Binary Options
/Lydia Wanjiru/ -- A binary option is a financial option that is considered to be an asset-or-nothing option, because the payoff is either you get a fixed amount of compensation or nothing at all when the option expires. It is also referred to as all-or-nothing or fixed-return options (FROs) and provides access to commodities and foreign exchange, indices, and stocks. Binary options are based on a Yes or a No proposition about whether an underlying asset will be above or below a certain price at a certain time. If the trader believes that the asset price will be below a certain price, he sells the option and if he believes it will be above a certain price he buys the option.
5 Key Investing Stages To Help You Achieve Financial Freedom
Sept. 18, 2017 /Lydia Wanjiru/ -- If you want to succeed financially, you must invest. Plan your financial short-term and long-term goals and objectives. It is no brainer that every journey must have a destination. In your financial journey, you need to put into consideration a number of things to achieve your goals at the end of it. This guide will give you a number of steps to take to help you to achieve financial security.
8 Common Types of Investment Risks
One of the biggest fears that engulf everybody when they think of investing is the loss of their hard-earned money. A risk is inevitable as every investment involves some degree of risk or taking some calculated risk. It is believed that the higher the risk the higher the returns. A risk is the level of uncertainty that a particular investment will gain if you invest in it or the level of a potential financial loss that you are likely to incur if you invest in a particular asset. Every investor should be concerned about the investment risk as much as they are concerned about the possibility of returns. Investing requires understanding the level of risks involved. Here are risks that every investor should be aware of: 1. Business risk Any business is exposed to uncertainties due to the economic downturns. A stockholder invests in the business when they purchase a portion of ownership in a company and a bondholder lends money to a business. If the business does not grow or do well and becomes bankrupt and its assets are liquidated, the common stockholders are among the last to get the proceeds from the dissolution. The bondholders are paid first, then the preferred shareholders and the ordinary shareholder gets the balance or the leftover which can be almost to or nothing. If you purchase individual stocks, you get exposed to business-specific risk and this can be reduced through asset diversification or buying a put option. 2. Market risk Market risk is also known as the systematic risk and affects all securities the same way. Market risk is caused by a factor that cannot be mitigated through diversification. 3. Price Volatility risk The stock price fluctuates up and down due to factors of supply and demand which are influenced by factors such as economic changes, changes in the company management. One way to measure volatility is the use of a beta and can approximate particular security returns against the returns of a benchmark such as S&P 500. 4. Inflation risk Inflation is the general upward movement of prices and reduces the investor purchasing power or the purchasing value of money. Inflation risk is caused by the decline in value of the stocks cash flow due to inflation or the chances that the cash flows from an investment will not be worth as much in the future. You can mitigate this risk by investing in inflation-protected securities such as inflation-indexed bonds or Treasury inflation-protected securities (TIPS). You can mitigate this type of risk through purchasing appreciable investments. 5. Interest Rate risk Interest rate risk arises due to fluctuations in interest rates and thus mostly affects the bond owners. A bonds measure of the interest rate risk exposure is determined by how sensitive its price is to interest rate changes in the market. The sensitivity depends on the bonds time to maturity and the coupon rate of the bond. 6. Liquidity risk Liquidity risk is the risk that arises due to inability to convert a security or a hard asset to cash when desired without loss in capital or income in the process because of limited opportunities. A good example is difficulties encountered when selling a real estate property at any given moment should an urgent need arise. An individual investor, a company or a financial institution is thus incapable of meeting short-term financial obligations. 7. Political/Social/Legislative risk These are risks that may occur due to the instability in the country due to the political environment, social changes or unfavorable government actions. 8. Currency/Exchange risk This is a risk that an investor is exposed to due to changes in the price of the currency against another. Investors should take risks that they can afford and look for ways to mitigate the risk that their securities are exposed to.
8 Popular Types of ETF to Include in Your Portfolio
An Investor should always seek for opportunities to increase their portfolio and capitalize on such opportunities. The need to hedge your investments against risks and other emerging issues is a valid reason to increase your portfolio exposure and to work on your investment strategies. Here is a list of the most popular types of ETFs to consider adding into your portfolio.
8 Key Things to Look For in Dividend Stocks
A stock dividend is the dividend payout that is made to the investors in form of additional shares instead of cash payouts. Most dividend stocks yield a higher percentage of return on average compared to treasury bonds and conventional bank savings annually from their payouts. However, dividend stocks payouts can change significantly at an impulse and in turn, changes your value of investments. Therefore, if you desire to invest in dividend stocks, you need to be very selective.
7 Common Features of Mutual Funds
Mutual funds are basically managed portfolio of stocks and/or bonds. Mutual funds are investments that can meet every investor’s unique need. The U.S has ranked over 4500 mutual funds. in all categories. Mutual funds meet all types of investors preferences as they can match any time horizon from short, medium, long, they can also match different investors risk tolerance from low, medium, high and they can be both open or closed-ended irrespective of whether you are making a small or a huge investment. Investors can invest in mutual funds to create wealth, to beat inflation and to save tax.
4 Common Types of Orders when Trading in Stocks
It is important for every stock investor to know the different types of orders in the stock market and when it is appropriate to apply them especially when you want to sell or buy stocks through a brokerage firm. Trade orders are instructions that are given to brokers to buy or sell a stock. All trades must have two orders which consist of an order to get into the trade or the buy order and an order to exit the trade or the sell order. Here are the 4 common types of orders to make trade in the stock market. 1. Market Orders A market order is one of the most basic types of stock market orders. A market order is an order that instructs the broker to sell or to buy at the best price that is currently available and at the time the order reaches the market. This type of order is executed immediately and you are guaranteed to get the trade filled (transacted) at the ask price as that is the price another trader is willing to sell at. There is, however, a possibility of a costly slippage but can be resolved by using only market orders that have good liquidity. Market orders cannot be accepted outside of the market hours given or when a particular stock is suspended. A market order is mostly preferred by the long-term investors because it is cheaper and the decision of making the investment is based on fundamentals that will happen over months and years and the market price is not much of an issue. 2. Limit Orders A limit order is an order to buy or to sell a stock at a specified price or at a better price. A buy limit order can only be executed at the specified limit price or at a lower price. A sell limit order will be executed at the specified limit price or at a higher price. With a limit order, you just don’t press the buy or the sell button but you must specify a price. Limits order advantage is that it prevents slippage. 3. Stop Loss Orders A stop-loss order otherwise called stop order, stopped market, no-stop buy or on-stop sell is an instruction placed with your broker to sell shares that you hold if the share price falls to a specified price. A stop-loss order is different from the limit and market orders where the order is executed immediately as the stop-loss order remains dormant or is put on hold until a certain price is passed. 4. Conditional Orders Conditional orders are executed only if a certain set of conditions are met. Different brokers have different conditions and you can gather more information on their websites or they can explain to you how they manage these types of orders upon request. Find out if there is an expiry date of the orders placed if the specified conditions are not met and the brokerage fees that would apply to you if you place the trade. There are instances when all or none of these orders apply for example when investing in penny stocks. An all or none order ensures that you either get the entire stock that you requested for or none at all. An order can be active or can be placed on a time restriction of “good -till- canceled”. This means that the order will remain active until when you decide to cancel it. If you don’t specify the exact time limit or time frame of expiry, the order is set as a trading day order. If the trading day ends and your order is still not transacted, then the order expires but you can still re-enter it or make it active on the following trading day.
3 Ways to Trade Forex
Forex exchange is an international market for trading currencies. According to a survey by the Bank for International Settlements in 2016, the average daily forex trading was 5.1$ trillion and of this, spot trading made up $2.6Traders have trillion.
4 Steps to Become a Successful Forex Trader (for dummies)
/Lydia Wanjiru/ -- To become a successful forex trader, you need to learn, practice and set a clear plan for the trade. Getting into the forex business is easy and you can follow a few simple steps. You need to learn how to mitigate losses while maximizing profits which you can achieve by identifying good trade setups that have a positive risk and reward set up.
How Trade a Small Trading Account in the Forex Market
There are many traders in the forex world who often blames the forex market and their account deposit for their failure. But in reality, your trading account deposit or the forex market has nothing to do with you a failure. You are not making a profit in the forex market only because you are not maintaining a strict trading discipline in the forex market. In order to trade the market successfully, you need to have very precise knowledge of the forex market. In this article, we will discuss how we can trade small trading account and become profitable in the in the forex industry.
6 Major Types of Strategies Traders can Opt for in Forex Trading
Trading Forex (FX) involves trading of currencies where you can buy one currency while selling another for speculation purposes. Forex trading just like any other investment involves taking calculated risks. When trading forex, you can make profits or losses. You need to master the best forex strategies that can work for you to benefit from forex trading. Currencies tend to fluctuate due to various factors like geopolitical, economical and more. The aim of trading in currencies is to make profits from the changes in prices. Here are 6 major types of strategies that traders can employ in forex trading: 1. Forex Scalping Strategy This strategy involves making a large number of trades and each trade makes small profits of about 5-10 pips per individual trade. This strategy requires constant forex analysis to be able to place multiple trades simultaneously and make profits. Trades in this strategy are very short-lived, possibly held just for just a few minutes and a trader seeks to quickly beat the bid/offer spread and make just a few points of profit before closing. If you opt for this strategy, you need to be very active in trading to avoid missing out on good opportunities. 2. Forex Trend Following Trading Strategy This strategy attempts to make use of the market trend mechanism with an aim of taking advantage of the long-term goals. Traders who choose this trading strategy use channel breakouts, current market price calculation and the moving average to determine the market direction and to generate signals. If you opt for this strategy, you do not need to forecast or predict the price levels. You simply follow the trend. This strategy deploys a risk management component that makes use of the current market volatility, current market price and the number of shares held. 3. Forex Volatility Trading Strategy Price volatility involves sharp movements in the prices. Volatility breakout systems are systems that are made to take advantage of this type of price actions. Their characteristics are: they don’t take advantage of the big moves, deals with short terms and quick trades, are based on the increase in volatility and the winning percentage of trades is higher, but the profit earned per trade is comparatively low. It is thus advisable to opt for this strategy if you have a good understanding of this volatility system. 4. Forex Breakout Trading Strategies Breakout strategy is a strategy that occurs when there is a breakout. A breakout is a point where the market tends to break away or starts to move away from a trading range. The trading range can be for any length. A breakout occurs if the price exceeds the higher or, the lower range. In simpler terms, a breakout occurs when the price moves beyond the highest high or lowest low for a specified number of days. For you to make money using this strategy, you need to be involved in buying higher and selling higher in the bull market and if you are dealing with the Bear market, you have to sell low and buy back lower. 5. Forex Swing Trading Strategies This trading strategy is simple and does not require you to hold the long-term trends to make profits. Swing trading involves having a set target and once you reach that target then that is the moment you opt out. This strategy is an excellent option if you are just starting forex trading as you do not have to be a long-term trend follower. 6. Forex Support and Resistance Trading Strategies Support in forex is actually a zone where the buyers tend to be more than the sellers, and the price tends to increase in value. The resistance is the opposite of support and means that the sellers are more than the buyers and thus that result in a price drop. These terms represent the tendency of a market to bounce back from previous lows and highs. Support is where the markets tend to rise from a previously established low and resistance is where the market tends to fall from a previously established high. You can opt to buy at the resistance and sell at the support. Resistance and the support are important parameters that tend to keep on changing depending on the market dynamics. Explore the Forex Support and Resistance Strategies thoroughly before you decide to apply this strategy.
Nevada School District, Middle School Sued Over Discrimination, Ban on 8th Grade Student’s Pro-Gun Rights Tee Shirt and Free Speech
Despite Increasing Focus on Electric Vehicles, Global Oil Demand Still Growing in the Short Term, Supporting Refining Margins, IHS Markit Says
Corbin Advisors Finds Industrial Sector Sentiment Still Strong; Luster of Last Quarter Fades Somewhat Amid Heightened Concerns
Resy Demonstrates Strategic Growth & Reveals First-of-its-Kind Hospitality Tools to Empower Restaurants on a Global Scale