What is CFD trading?

What is CFD trading?

CFD stands for Contract for Difference. It was initially designed in the 1980s to help businesses manage their risk. If a business is involved in importing and exporting goods, it could find that its profit/loss margins are extremely volatile thanks to currency fluctuations. In other words, when you buy something from abroad using a different currency than your own, the value of that foreign currency can change after you have made your purchase – resulting in either a healthy profit or a crushing loss. The CFD allows both buyers and sellers to avoid this asymmetric risk. In essence, what happens Continue Reading →

Understanding candlesticks in forex

  Various factors affect the movement of currency rates and forex market analysis. More often than not, one such factor is the use of candlesticks in technical analysis. Candlestick charts (also known as Japanese candlesticks) consist of a rectangle of a body and an upper and lower shadow. The rectangle’s colour represents whether or not the closing price for that particular time was higher or lower than the opening price. It gives traders important information about what happened during the trading session within the set time frame. The length of each part of the rectangle – body, upper shadow, and Continue Reading →

What spreads do retail brokers offer in forex?

Retail brokers are all the same, aren’t they?   It is usually not true when it comes to forex spread betting. While all retail brokers offer the standard market spreads on major currency pairs, there are often significant differences in offering other financial instruments.   It can help you tremendously when deciding which broker to adopt because you will be able to trade different instruments at much tighter spreads than many of your competitors.   Some firms have much more comprehensive offerings than others, so having tight spreads could prove very beneficial over time if you use any of these Continue Reading →

The Difference Between Forex and Commodity Trading

What’s the difference between commodity trading and forex trading, you ask? Commodity Trading It’s simply that commodities are agricultural products such as cocoa beans, pork bellies and rice. In contrast, forex or foreign exchange is the trade of any financial instrument that has monetary value.   Commodity traders deal in so-called commodities. These are raw materials that have a variety of different uses, such as oil or precious metals. Commodity traders work together with large companies to provide them with these raw materials.   A commodity trader will generally buy something when there is an abundant supply and then sell Continue Reading →

Making Smart Investments Through Fundamental Analysis

Stock prices are subject to change almost every minute of the day, this is why investors need to be keen and observant of the various trends within the stock market. Every investor should spend time in some in-depth research and use their findings to forecast possible trends within the market. Fundamental analysis looks at various factors that impact future stock prices. It mainly focuses on measuring the intrinsic value of a share, as a way of evaluating securities. A lot of data has to be analysed to determine the value of the security. Some of this data includes financial statements, Continue Reading →