Tag: leverage

Forex 101: Understanding Leverage and Margin

Trading Articles
For any forex trader, it is essential to understand two concepts: leverage and margin. Leverage lets traders to into currency trading using an amount that is actually more than what is available in their respective accounts. With this, forex traders have the chance to have “bloated” funds. Meanwhile, margin refers to the actual funds needed for a trading account to be considered as collateral that is necessary to cover potential losses. A closer look into leverage Compared to the stock market, traders within a forex market are more vulnerable to losses. Fortunately, forex trading promises higher profits, but the risks remain high. Most brokers allow a leverage of 100:1. It means one can buy or sell €100,000 worth of currencies. This is possible even if you have only around €1,000 worth o

ETF Trading – Diversify your forex portfolio

Financial Markets Explained
ETF Trading is one of the most popular alternatives to the conventional forex trading. ETF stands for exchange traded funds. ETF Trading makes for an exciting and fast growing segment of the financial investment industry and makes for a formidable replacement to mutual funds as a preferred choice for fund managers. ETF Trading has been available since the late 80's as they are growing at a tremendous rate as more and more financial investors are starting to be aware of the profit potential from trading ETF's. At the outset, an ETF Trading fund comprises of a group of stocks, bonds or other investment vehicles similar to that of a mutual fund. But there in ends the similarity. Unlike mutual funds, ETF's trade the same way as stocks do, thus allowing an investor to buy and sell during the...

Dodd-Frank act and July 15th Deadline

Financial Markets Explained
July 15th 2011 is a big day for forex brokers as well as binary options brokers across the world. Exactly one year ago, on July 15th 2010, the Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). On July 21, 2010, President Obama signed into law the “Dodd-Frank Wall Street Reform Act” (the “Dodd-Frank Act” or “Act”). The Dodd-Frank Act most likely will bring about sweeping regulatory changes within the financial services industry. However, at over 2,300 pages in length, few people have read this legislation in its entirety. Of those individuals who have read the Act, few can comprehend the implications of such sweeping reform. This act/regulation will significantly change the structure of US based over-the-counter derivaties markets. The reg

Understanding Forex Margin Trading

Trading Articles
Forex Margin Trading is likely one of the fairest and essentially the most compelling investment method available in the forex markets. Forex Margin trading refers back to the leverage quantity given to the traders to trade available in the market. Forex margin trading can be a thought of a forex trader who borrows money from the Forex brokerage firm with a purpose to utilize the dollars specially for trading the Forex markets. Because of forex margin trading, a trader with only a modest capital is able to put money into significantly bigger value contracts. This is also some other term for leverage. The financing proportion in forex margin trading is above 20 times, because of this the Forex traders’ funds may enlarge to twenty times to carry on the trading. Some brokers offer you a le
What influences a company’s share price

What influences a company’s share price

Financial Markets Explained
Ever noticed when the stock market crashes or corrects itself, it does so quickly and sharply? This is fear at work. When the market is positive and moves up, this is greed at work. The market always moves down quicker than it moves up, therefore we can deduce that fear is a stronger emotion than greed. This can also be interpreted in financial terms such as bullish and bearish, where the term bullish or bullish market means the market is positive and rising while bearish or bearish market refers to the stock market going southwards. At a basic level, a stock is the initial capital that a company has. When a company goes public (meaning that the ownership of the company shifts from a closed and private group of individuals to whoever wishes to buy a share in the company), it splits this...