A Quick Introduction to Short Selling Currency and Its Use in the Forex Market

There are many strategies used when trading in the financial markets. Traders in the markets often buy shares or assets when they think that their value will go low. When a trader does this, the expectation is that the value of that asset will go high just in time for them to sell. By doing this, therefore, the trader is able to make some money. This is what shorting is all about in the markets. In the currency market, this process is a bit different since it involves two currencies where the short position sees one currency in the pair falling and the other one rising. Let us look at the strategy in detail.

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Short Selling in the Currency Market

As stated in the introduction, short selling in the forex market involves a pair of currency. Take the USD/EUR pair for instance. This pair comprises of base currency (the USD) and the quote currency (EUR). If the quote of the currency is USD/EUR=0.88 and the trader decides to go short, then they will basically be short selling the base currency while going long on the quote currency. In the hypothetical situation here, quote indicates that 1 USD equals 0.88 EUR.

The Premise of Shorting in the Forex Market

The premise of every trade done by a trader is that their move will allow them to make a profit. When a trader is short selling the USD therefore, they are expecting that at a point in time, the USD will be lower in value compared to the EUR. The ideas that inform such a move come from the research done on the market. Short selling in the currency market is pretty straightforward. There are no special requirements that a trader needs to comply with, nor are there special rules on the trade.

Risks Involved in Short Selling

Like in every other market, there are risks involved in going short particularly in the currency market. When a trader decides to go short, they are putting themselves at risk of losing money exponentially. This is because short selling assumes that the price will fall. If the price decides to rise however, there is no upper limit on how much the price of the currency can rise. Long selling does not have such a risk since the price of the currency can only fall to zero and not beyond. Traders thus are exposed to risk when going short and there needs to be a means of limiting the risks.

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How to Limit the Risks?

Fortunately, there are a number of ways through which a trader can limit the risks of short selling. One of the most effective ways of doing this is by using a stop loss. Stop losses are used across the financial markets and they provide a simple mechanism of exiting the trade when there are no profits to be made. The stop-loss tells the broker to exit the trade when a set short value limit is reached. The opposite this is placing a limit order, which exits the trade when the projected profit is met.

Crucial Issues to Note When Short Selling

As previously indicated, the forex market is great for traders who want to short sell. It is a flexible market that welcomes traders of all calibers. The market is nevertheless quite risky when it comes to short selling, especially when compared to other markets. The upper limit of loss is virtually infinite even though the lower limit of profit is 100%. Traders need to be prudent when trading in this market, therefore.

In summary

Short selling is a great way to make money in the forex market. For this strategy to succeed, the forex trader needs to be a good risk manager. The use of tools like stop loss is advised as the market is rather unpredictable. It is advisable to never risk more than 1% of the account. The basic premises of shorting in the market is similar to what is common in other financial markets. With proper strategies on risk elimination, there is a lot to be gained when shorting in the foreign exchange market.

Your Checklist: 5 Brilliant Investment Tips That Will Generate You Millions

In today’s modern society where debt is national and public debt is higher than it’s ever been, and no matter how much some of us don’t like it, money is the tool for achieving freedom and allows us to do what we want, it’s no wonder so many have their eyes set on the 1-million-dollar milestone.

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Having this amount of money in your bank account will typically mean you’ve reached a level of financial security and you can focus on the more positive aspects of life. One of the best ways to do this is to invest your
money now and get the return in the future, but you’re probably wondering how to do this.

While there are plenty of ways to invest your money, today we’re going to explore the five most brilliant investment tips you need to know in order to hit seven digits in your bank account.

#1 – Don’t Worry About Small Losses

It’s easy to get caught up in the trap of checking your investments every second of every day. However, this a sure-fire way to caught up and disappointed with your everyday losses, which are to be expected when you’re on an investment plan.

This can then cause you to make rash decisions that are going to leave you worse off in the long-term. Instead, remember to play the long game and remember that small losses are expected on your way to large wealth.

#2 – Avoid Penny Stocks

The common problem with investment is the temptation to invest your hard-earned money into penny stocks. After all, surely there’s less to lose over the long-term? However, this just a misconception because even if your $10 stock plunges to zero, mathematically, you’ve still lost 100% of your original investment.

This means the risk is just the same, but you’re not opening yourself up to the opportunity of earning more profit back on your original funds. Penny stocks also tend to be less regulated than higher earning stocks.

#3 – Don’t Chase the Highest Tips

During your time in the investment industry, you’re going to be presented with ‘tips’, or ‘hot tips’ that are going to try to persuade you into buying into certain stocks or shares for maximum, lucrative returns.

While these tips could be right, never take them at face value and always do your own research prior to investing your hard-earned money. The more you know about an investment yourself, the safer the bet will be.

#4 – Have an Open Mind

One of the most important things to remember is that you need to go into your investment strategy with an open mind. There are a ton of smaller stocks out there, especially in tech or in other industries that may be small now but have a huge potential to become blue-chip clients in the future.

Again, do your research and get as educated as you possibly can. The more informed you are, the more likely you are to get the best results.

#5 – Stick to Your Guns

When you’re investing your money, most of the time you’ll have a strategy, whether that’s one you’ve made yourself or developed using a professional financial advisor, like this Sydney finance broker. Strategies are designed to work well over the long-term; and if you panic and keep changing it, you’re never going to get the results you’re aiming for.

Summary

This is just scratching the surface of what tips are out there when it comes to turning a small fortune into millions. The best way to go is to get as educated as you can on the subject and use a professional advisor to help you make these all-important decisions.

Branching Out: How to Choose the Best Investment Broker for Your Needs

For people who have taken the audacious step towards investing, you cannot do so without first owning a brokerage account. Technological advancements coupled with the way the internet has infested every nook and cranny of day-to-day financial institutions, and there has never been a better time to invest your funds.

Competitions are rife amongst brokerage firms, with every broker offering new deals, the ability to trade stocks, and even involved in options trading—all of this done to convince you to join forces with them.

Choosing the right broker for your investment should be as important as choosing the right bank for your transactions. One should not outweigh the other. As a young investor, for you to become successful in the journey of investment, you need to properly deliberate on what services and products these brokers offer that will suit your needs. Many investors have fallen prey into nefarious brokerage firms in times past due to the lack of proper information

So, how do you choose the best investment broker that is right for you—in a sea full of brokers?

We’ll be looking at some of the factors that should aid your decision in selecting a broker for your investment. You can view here for more information regarding investments. 

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Cost per trade

This is a necessity in every brokerage firms. Since the costs can be compared with other competitions, you should take out your time and look at every cost per trade each broker offers. The importance of this cannot be overemphasized. Take your time and investigate all the costs. There are some brokers that have minimum commission off trades from stocks but will not be suitable for you if you mostly invest mutual funds where the commission may not be attractive to you.

Investment options

Flip through the list of brokers and check out the variety of investment options they provide. A young investor should be armed with this information; a good broker offers you the options of investing an assortment of assets, be it bonds, treasury securities, exchange-traded funds (EFTs), options, stocks, futures, real estate investment trusts, and even certificates of deposits. For investors planning to only invest in ETFs, you need to choose a broker that will offer that service, the cost of that service and the possibility of spreading your wings in the future.

Referrals

No matter how convincing a broker ad may be, there are things that may not be apparent to you. Hence, before making the decision to create an account in a brokerage firm, you need to reach out to those who are currently investing in that firm or have been in times past. In the same vein, be careful of relying on opinions of such brokerage comparison sites, as some of them may, in reality, be an affiliate of the brokerage firm you’re planning to join. The best way to spot them is to look at how they present the information. If they provide unrealistic information, donating 5stars to brokers, your suspicion should be piqued.

Minimum Initial Investment

Most brokers have minimum initial investments that run into thousands of dollars. However, there are some brokers with little low minimum initial investments in hundreds of dollars. You should check for the clause in the minimum trades and also the penalty of not abiding by the requirements.

Types of Retirement Account

It is best to confirm the many types of retirement accounts a broker offers before signing up with them. If you want to set up a regular account with plans of opening an IRA or a custodial account for your kids in the future, you need to check if the broker can meet this need. This will not only save you unnecessary research time in the future but will make your decisions easier to make.

Direct Investment Advice

Before you sign up you with a broker, you need to find out if the broker offers direct investment advice, and if there is a charge for that particular service. Most brokers provide limited investment advice and offer you the opportunity of having full unrestricted direct investment advice for a fee. Also, there are brokers that’d charge you for broker-assisted transactions or for advice on a need-to-know basis. You should understand that the reason why most brokers offer low transaction fees is that they offer little or no assistance. You should inquire into the handiness of such services from brokers before settling on anyone—being aware that it could change the structure of charges should you choose them. 

Interest on Uninvested Funds

While some brokers offer interests on funds that have not been invested, some don’t. Look out for the ones that do while checking with the other parameters listed above before making a choice.

License.

Perhaps the most important factor to note down is to check if the broker is properly licensed with regulatory bodies like the Securities and Exchange Commission, and the Commodities Futures Trading Commission and other state commissions.

Experience

You need to find out the wealth of experience of a broker before choosing to sign up with them. This also involves finding out the number of training he or she has, plus the strategy and manner they approach investment.

Customer service

Finding a broker who is easily accessible and can attend to your questions and needs should be a top priority when choosing a broker. Check for the variety of customer support (direct phone, live chat, email) before making a decision

Visit Local Office

You can also pay a visit to the local office of the broker and talk to an executive there. If you are impressed with your findings there, you can make the choice of signing up.

When you place all these factors into consideration, choosing a brokerage firm that will meet your needs will not be difficult. Always remember that if you are not satisfied with the services of a broker, you are free to close down your account and choose another broker who understands your needs and gives you value.

3 Rules For Investing In Property Abroad

When you’re looking for investment options for your savings, you’ve probably thought about real estate. Property prices are on the rise and there are a lot of different ways that you can take advantage of that to make good money investing in property. One of the best ways to invest in real estate is to buy a property abroad. You’ve got more options for renting it out and you can make better money letting it for shorter periods to people when they’re travelling. The prices tend to be a lot lower as well so the initial investment isn’t anywhere near as high. But there are a whole new set of challenges involved with real estate investment in another country so you’ve got to be careful. If you’re considering it, here are some basic rules that you need to follow when investing in property abroad

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Be Careful With Up And Coming Locations

A lot of people try to get a good deal by finding somewhere that is an up and coming location where property prices are still low. They buy a property now while it’s cheap and in a few years, when the area turns into a tourist hotspot, the value of that property shoots right up and they make loads of money renting the place out. That’s a great strategy, as long as it actually works. Often, there are a lot of rumours about a place that turn out to be nothing more than that. If you buy a property based on these rumours, you could end up stuck with a house that nobody will rent or buy and the value might even go down. When you’re looking at properties for sale, it’s best to go for well established areas that are already popular. You’ll pay more for the property but you can massively reduce the risks involved.

Don’t Forget About Taxes

Every country has their own rules about taxation when you’re buying a property so don’t forget to do your research. You might have to pay stamp duty or some equivalent as well as VAT on the property and the rates might be a lot higher than they are at home. If you don’t factor this in when you’re pricing up properties, you might be in for a nasty shock when you actually come to buy the place and all of the taxes are added on top.

Rental Laws

There are different laws about renting out a property in different countries as well. In some places, only certain properties can legally be rented out. For example, there has been a lot of trouble in New York recently with Airbnb because there are strict regulations about the type of building that can be used for short term lets. If you don’t check the laws before you purchase a property, you might end up with a place that you can’t legally put tenants in.

There are a lot of tricky legal considerations to deal with when you’re investing in property abroad and it can cause you a lot of trouble if you get it wrong so always do your research properly before you make any decisions.

A Beginners Guide To Bitcoin and Blockchain

You have probably heard the terms Bitcoin and Blockchain but maybe you don’t understand what they mean. The post below and accompanying infographic provides a beginners guide to Bitcoin and Blockchain.

Bitcoin is the first ever decentralized cryptocurrency which can be even termed as the digital or virtual currency, says cryptosuper.market. Bitcoin is fungible, portable, divisible and irreversible.

The Bitcoin was invented by the name SATOSHI NAKAMOTO in the year 2008 and it was later published as open source in the year 2009. But the person or group behind the invention have no traces of identity as the bitcoin was published by an unknown person or group using the alias Satoshi Nakamoto.

After the invention of Bitcoins many cryptocurrencies emerged, where some used the same system and structure of bitcoin and others implemented the structure and made better digital form of currency. Though there are many forms, bitcoin stands first-1st among them. As the rest of the forms are derived from the bitcoins they are often termed as ALTCOINS which means Alternate coins of bitcoin.

At first Litecoin was taken as an altcoin which later lead to various Altcoins as Dogecoin, Ethereum, Monero and etc. Each and every altcoin has its own specifications where some of them even beat the functioning of bitcoin in some aspects as some of the Altcoins stand as the best by offering greater anonymity than bitcoin.

A Beginners Guide To Bitcoin and Blockchain – What is Blockchain?

To record all the transactions of the bitcoins a public ledger called BLOCKCHAIN has been invented where the blockchain stood as undeniably an ingenious or a creative invention. The blockchain plays an important role, the whole bitcoin network completely relies on the blockchain.

Blockchain is further classified as three types namely public, private and consortium blockchain. Generally blockchain follows a state of consensus where the transactions takes place between the users and are usually confirmed within 10 minutes of Block Time by the network, through a process called Mining.

Block time is often defined as the time taken by the network to generate an extra block in the blockchain. The Block Time differs for each and every Cryptocurrency form, the Block time for Ethereum is 20 seconds.

A chronological order is enforced in the blockchain system by mining. Mining allows different computers to agree on the state of system and it protects the neutrality of the network.

The first ever international blockchain transaction was completed on October 24, 2016. Brokered by the Commonwealth Bank of Australia and Wells Fargo & Co (WFC).

Now there comes the question of storage of bitcoins, bitcoins are generally stored in the bitcoin wallet or crypto wallet. Cryptocurrency is not actually or directly stored in a crypto wallet.

Instead, a private key is stored that generally shows ownership of a public key. So in general a crypto wallet stores both private and public keys and allows to receive and send coins.

If a person loses his / her wallet due to the corruption of the wallet file or hard disk or the data disruption the lost bitcoins that are present in the wallet can’t be retrieved back and they are to be considered that they are lost forever. There are many offline and hardware wallets available.

The Bitcoins use peer to peer (P2P) networking system which doesn’t involve any third party interference in the transaction process. The success rate of the trade increases with the P2P networking system.

P2P networking system became first popular in 1999 with the introduction of Napster application, it is a file system which generally has a set of central servers that’s used to link people who had files with those requested files.

Since the transactions directly take place between the users without the interference of any third party, the transactions are irreversible.  But at one point it is possible to refund if and only if the receiver agrees to cancel the transaction.

Generally people often get confused about owning a cryptocurrency, the major point that concerns them which coin to select. Though bitcoin stands first it even has some drawbacks which are recovered in its altcoins. People now-a-days are interested in bitcoins because of its speed of transaction and very low transaction fee offered.

Bitcoin is the world’s most widely used cryptocurrency and thus bitcoin is increasingly viewed as a morganatic or legitimate means of exchange. But there is even a point to be concerned as the price of bitcoin is volatile, price of bitcoin can unpredictably decrease or increase over a short period of time due to its novel nature, young economy and illiquid markets.

It isn’t a tough task to own a bitcoin as there are 4 basic ways through which a person can own a bitcoin, a person can buy them form bitcoin exchange sources or can buy bitcoins from any of their friends or relatives or near by trader or by Accepting Bitcoins as payment for goods and services they provide or by mining the bitcoins.

All the three ways are simple and easy but care must be taken while dealing with unknown people or traders whereas mining isn’t that easy as it seems to be as it’s a process which involves in usage of special software to solve mathematical algorithms in exchange of bitcoins and it isn’t possible as it once was.

If a person wants to begin a transaction and he knows nothing regarding the process then that’s totally futile. We can conclude the information regarding beginning transaction process or steps of the transaction process in few steps as : a transaction can be termed a general transfer of value between the Bitcoin wallets that are involved in the blockchain.

Bitcoin wallets have private key which is generally used to sign transactions by providing a proof (mathematical proof) that the request have come from the owner of the wallet. The signature also prevents transaction being altered by others once it has been issued or started.

All transactions are between the users and are usually confirmed within 10 minutes of block time by the network through mining.

Nowadays for the convenience of the bitcoin users many Bitcoin ATMs have been installed and there are about 3164 ATM machines through out the world. Bitcoin kiosks (Look like traditional ATMs) are generally the machines which are connected to internet and allow the insertion of cash in exchange for bitcoins. As per the study, bitcoin ATM charges about 7% on transaction and 50$ as exchange rate.

Is Bitcoin legal?

There are many countries which legalized the usage of bitcoins and whereas there are many countries which have banned the usage of bitcoins and declared bitcoins illegal. In short we can say that the bitcoin isn’t legalized all over the world.

Countries or Nations like Ecuador, Bolivia, Bangladesh, Kyrgyzstan and Saudi Arabia banned the usage of bitcoins and declared bitcoins illegal whereas, countries like United States, Canada, Australia and European Union accept the usage of bitcoin declaring it legal.

In cryptocurrency we usually have a fork which is given as change in protocol, the forks are classified into hard forks and soft forks. The first Bitcoin fork was NAMECOIN published or generated in the year 2010 and a hard fork published in the year 2017 was Bitcoin Gold.

The most common fork used is the SegWit which is a soft fork, SegWit (Short for Segregated Witness) and SegWit is a protocol upgrade that changes the way data is stored.

The total dollar market value is generally determined by Market Cap value or Market Capitalization value. The market cap value is mathematically calculated using MC=N x P, where MC is the market capitalization, P is closing price per share and N is number of shares outstanding.

Bitcoins are even helpful in the payment sector. For the first time University Of Nicosia, Cyprus accepted fees in the form of bitcoins. Bitcoins are even used in shopping, online transactions and payment.

There are many payment service providers (PSP) offering online services dealing with cryptocurrencies. There are many payment service providers where Bitpay and Coinbase are internationally top ranking exchange providers for bitcoins. The basic work of the payment service provider is to accept bitcoin on behalf of the merchant and convert it to the local or Fiat currency.

Lightning network effectively creates a layer on top of bitcoin and it helps in fast and cheap transactions which can net settle to the blockchain. Lightning Network is pretty complicated and is an extremely promising as a cryptocurrency game-changer.

DAO tokens came into existence in the year 2016, the main usage of the DAO tokens was that the were to receive DAO tokens and then vote for a project to fund. But the concept didn’t work successfully as many people didn’t want the system to be present.

ICO (Initial Coin Offering) refers to the creation and sale of digital tokens. The first sale was held in the year 2014, it’s a project that came into existence to create some certain amount of a digital tokens and sell it to the people usually in exchange of their cryptocurrencies such as Ethereum or Bitcoin.

We hope you have enjoyed this beginners guide to Bitcoin and the Blockchain, if you did please comment and share.

The infographic below helps explain further – courtesy of Bitcoinfy.net

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