What is Leverage in Forex Trading?

Many financial terms can be somewhat confusing, especially to those newer to the world of finance.   Forex trading is one such activity that has several definitions and meanings, which can make it difficult for someone new to learn about this field to understand what it all means.   Leverage is one of these terms.   What is Leverage? If you use leverage correctly, it is a powerful tool that can benefit your trading career greatly.   Be sure to research how much you can borrow with your broker before investing any money into the market, as this will determine if leverage is proper for you or not.   Leverage is the amount that you borrow when making a trade, while margin is the collateral that you must post to do so. Using more leverage increases your risk, but it also means a higher return on investment (ROI)   For

Read more

The best commodities to trade in forex

The benefits of trading in commodities are well documented. In a world where many people’s income depends on it, traders and investors look for ways to secure their future by investing money now. It often means putting some into volatile assets like those from countries with large reserves deposits like Canada or Australia, who have been known commodity producers throughout history!   The key here, though, is that these forex pairs offer additional returns and provide diversification because each country has its unique set prices associated with them depending on how much they produce at home. This is opposed to say only owning stocks all over the globe without any geographical considerations whatsoever would leave one exposed to significant risks if something goes wrong anywhere else.   One of the main reasons commodities are so profitable is because there is a relatively low barrier to entry when it comes to

Read more
Options Trading for Beginners

Options Trading for Beginners

Strategies used in options trading have been running the gamut ranging from exotic “multi-legged” beast to more uncomplicated “single-legged” trades. Even so, no matter how complex or simple they are, one thing all strategies have in common is that they are based on the puts and calls fundamentals. Here are options strategies that are built on the basics of puts and calls. These strategies are what are commonly known as being “one-legged.” It is also worth noting that simple isn’t always an indication of a ‘risk-free’ strategy. All it means is that the strategies are not as complicated as the multi-legged option stratagems. Long call Strategy In this strategy, you can “go long” or purchase a call option. It’s a straightforward strategy wagering that an underlying stock will rise higher than the strike price by expiration date. Why it’s used Those who are not worried about losing the premium opt

Read more

CFD Trading – A Beginner’s Guide

CFD is an acronym for Contract for Difference, which is a contract between a broker and a trader in relation to value change for assets over time. Contract for Differences or CFDs present traders with a cheaper way of trading different assets like currencies, stocks, indices, and commodities without the need to raise a large capital to begin. When trading CFDs, a trader does not have to own the underlying assets they want to trade since CFD trading uses leverage and margins to make a profit. This means that players can buy market positions with less capital since they do not have to own the asset. If you are new to CFD trading, it is important to arm yourself with tips and tricks to make the most of your strategy. This beginner’s guide will help you understand CFD trading. How CFD trading works In CFD trading, a trader makes money

Read more

How a Novice Trader Can Gain from Forex CFD

It can be hectic for a complete novice to get started with forex CFD. For instance, you may not understand what makes forex CFD unique. You may also want to know why some traders discourage you from venturing into forex CFDs and why it suits day traders. If you seek answers to the above frequent worries, you are in the right place. Here, you will get the most straightforward explanation of forex CFD definition, upsides and downsides, and a recommended way to start enjoying its benefits. What is more? Read on to find out. Understand the Uniqueness of Forex CFDs Simply put, forex CFD trading entails speculating on a currency pair. You can either go long or short on a currency pair. Here is more explanation of the technical terms. A standard forex trading environment involves owning (through buying) or selling currency pairs. Currency pairs often come in two parts.

Read more