Tag: featured

How does money disappear in a stock market crash

How does money disappear in a stock market crash

Financial Markets Explained
Where does money go when markets crash? "Brexit crash wiped out a record $3 trillion," the headlines screamed after the UK voted to leave the EU. It is not uncommon to read such headlines in the financial media which usually comes following a stock market crash. But what exactly does it mean? Where was the $3 trillion to begin with and how can money just disappear into thin air? In a stock market collapse do people really lose their pension and invested money? Who gets the lost money? Certainly the lost money can't just vaporize can it? A quick answer to the above question is "There was no $3 trillion to begin with." Read on below to get a more clear understanding of how money works in the stock market and more importantly how money is said to disappear during a stock market crash
Difference between Money and Currency explained

Difference between Money and Currency explained

Financial Markets Explained
Money and currency are often interchanged and used loosely. But what is money and what is currency? What are the differences between money and currency? If you were asked, “how much money does it take to buy a car” your typical answer would be, “You can buy the car for $50,000” What you mean by that is that you value your car at 50,000 US dollars. What if the buyer was from Germany? Your German customer will still pay you 50,000 US dollars, but in effect he is paying you €45,454 (at a EURUSD exchange rate of $1.10, or where 1 US dollar is equal to 1.10 euro). As you can see, the money value remains the same, but the currency value changes. Money is therefore a store of value, currency is a form of exchanging this value. What is money? Money is a term that is loosely used and is
Trading with stage analysis, the Stan Weinstein way

Trading with stage analysis, the Stan Weinstein way

Trading Strategies
Stage analysis trading strategy is a relatively popular trend trading strategy that was discussed in detail by Stan Weinstein, in the book, Secrets for Profiting in Bull and Bear markets. While the basic principle of trading with stage analysis is merely following the trend, Stan Weinstein gives a more structural approach to this trading strategy. According to Weinstein, stage analysis uses chart patterns in order to derive the four stages in a security's price. Once the stages are determined, there are specific guidelines that determine when to buy and sell. Stage analysis was initially described for the stock markets, but could very well be used for the forex markets as well. With stage analysis, traders can hold on to positions and helps to enter the trend at a relatively early stage...
Evaluating A Forex Broker

Evaluating A Forex Broker

Trading Articles
For many people who may be considering forex trading for the first time, one of the benefits is that it's considered to be a simpler process than, say, delving into the stock market. The ease of entry into the forex market is sometimes cited as one of its most alluring features. To an extent, this means you can set up an account to trade forex with a relatively small sum, particularly compared to other markets. But it also refers to the relative ease of setting up a portfolio. The misconception, however, is that many interpret "ease of entry" to mean that they can simply go online and buy and sell currencies the way they might do when purchasing a commodity like gold or silver (or even Bitcoin). While some experienced forex traders would argue that trades can be executed in a more hassl...
What is ‘Helicopter Money’ Policy?

What is ‘Helicopter Money’ Policy?

Financial Markets Explained
Helicopter Money is a proposed alternative in the world of easy monetary policy. One could be forgiven to mistake the term as a phenomenon where loads of money is simply dropped from a Helicopter. Helicopter Money is seen by many critics as the next step after Quantitative Easing. Helicopter Money, although might seem new to many has been around for years. The term is attributed to Milton Friedman and his parable of 'Helicopter drop of money' in 1969. “Let us suppose now that one day a helicopter flies over this community and drops an additional $1000 in bills from the sky, .... Let us suppose further that everyone is convinced that this is a unique event which will never be repeated,” (Friedman 1969, pp 4–5) In this article you will learn how helicopter money works, how it can be implem