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 9 Benefits of Trading Forex

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 9 Benefits of Trading Forex

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Forex is setting a high trend among millennials. It has been always recognized as a high-potential investment instrument. In fact, 46% of younger investors traded derivatives more than the average. With the entry of AI into trade, it has been a true game changer.

Trading strategy software gives you a competitive edge in the market like a trading pro. When it comes to forex trading, it’s not only about making the right trade, but also about making it at the right time and place. With trading automation software, you can shape your strategies based on real-time information.

Trading forex is unpredictable, but it can be a profitable way to make money. If you’re here, then you’re interested in what you can get from trading forex. This article will tackle some of its benefits, but first, let’s understand what it means.

What is Forex Trading?

The essence of forex trading is the act of buying and selling currencies for financial gain. As a forex trader, you will predict whether the value of a currency pair will rise or fall. The decision to buy or sell the pair depends on this choice.

Most forex transactions have a forex broker. With the advent of online trading, you can now use software for trading. To put it another way, when you use trading tool software, you can let the program handle your trade.

AI in Forex Trading

Does AI trade actually work? Trading automation software makes trading easier and stress-free. The majority of AI trading uses “trading robots.” They can do market research and execute transactions on a user’s behalf.

The AI trading system software has no emotions or psychological biases. As a result, applying AI makes transactions far more effective. When combined with fast execution, the outcomes are better profits.

If you are a beginner, AI trading platforms can help you develop and earn more money. The trading robots use machine learning and artificial intelligence in their trading strategies. It enables them to predict eventualities in real-time, resulting in the best trades.

The AI forex trading program places a trade after seeing a trading opportunity. It also uses the best stop loss and takes profit settings. You can use the entire method to trade the FX market with no manual input.

What Are the Benefits of Forex Trading? 

Forex trading has benefits that make the market appealing to traders. You should understand all that it has to offer before jumping in. Here are nine of its most significant benefits.

1. High Volatility

You can’t completely avoid currency volatility. But, you can prepare for how you handle unstable markets. To do this, you need to use different risk-management measures, including:

  • Trade ideas charting software. Earning a profit during a market slump is a good opportunity to take advantage of. Some trading analysis software offers charting software to members at no extra cost. You can check the charts for any period or view the current price fluctuations. This makes it simpler to see everything at once.

 

  • One-click trade. It recommends the position size to match your risk management rules based on the stop loss. It is a practical way to increase the efficiency of your order entry. You can place trades with a one-click transaction right away, so you don’t miss out on market prices.

 

Prices for some currencies vary because of the large volume of daily currency trades. And sometimes, it amounts to billions of dollars each minute. Speculating on price changes has the potential to result in significant rewards.

2. Fast Liquidity

Most forex traders use AI trading platforms, which improves the efficiency of order fulfillment. With these trading platforms, you can easily find a buyer or seller. Using one means you won’t have to worry about price manipulation and anomalies any longer.

3. No Regulator

Regulating foreign exchange is a difficult task since it takes place in a global and digital environment. Fortunately, this benefits traders like you. Without a centralized exchange system, independent organizations regulate each nation.

These consumer protection organizations make sure that brokers have valid licenses. They also have strict regulations for brokers to safeguard the interests of traders who use their services. Licensed forex brokers assure you that they are fair, transparent, and strictly monitored.

4. Works for all Trading Styles

Your trading approach will depend on your goals and resources for FX trading. There are many trading approaches you can try, including:

  • Swing trading
  • Scalping
  • Day trading
  • Price action method

Short selling (exchanging one currency for another) is a necessary component of forex trading. Earning or losing money will depend on your forecast. As a result, it is possible to make money regardless of how the market performs.

5. Large and Global Market

If you don’t know already, the foreign currency market is large. These merchants come from all around the world, connected through trading automation software. This market has a daily average currency transaction of more than $6.6 trillion. This makes it an even more profitable trading venue.

6. Round the Clock Market Hours

The currency market is always open 24 hours a day, 5 days a week. Plus, it is not based on what the market demands. That means you won’t have to wait for the opening bell. You can trade as long as a market is open somewhere in the world.

But to make the most of it, you should know the weekend forex trading hours. Consider putting stops and limits in place to mitigate gaping risks. Using AI trading software can help you manage your different trading systems.

7. Easily Accessible

One of the main benefits of forex trading is accessibility. It’s really simple to start trading forex, even with a small amount of money. This makes it a great avenue if you’re just starting on your journey with trading.

In short, money will not be an issue if you want to invest in forex trading. While that is the case, successful trading requires you to have enough trading knowledge and skills.

Luckily, you can practice forex trading with free demo accounts without taking any risks. Demo accounts let you practice using a trading platform. This will, then, help you become familiar with market movements.

Aside from this, some practice trading platforms work like real trading platforms. This way, you can create a risk management strategy without putting any money on the line.

8. The Use of Leverage

The best part of FX trading is that you can use margin trading with a large leverage factor. Leverage, or multiplier, allows you to open large trading positions with little capital. It works by borrowing money from a broker so that you can trade large positions in the currency. 

If you want to use leverage, maximizing your prospective rewards is your best strategy. And by using trading analysis software, you can better manage the risks that come with this. It offers running balances, stop losses, guaranteed stops, and price alerts.

9. Low Transactional Charges

For deals with high volume, there are sometimes no fees, or if there are any, you can still afford them. And you can thank forex brokers for that. If you want to know how they can do that, they use the spread to make money. This makes forex trading a cost-effective investment method.

AI Trading Platforms Makes Trading Forex a Rewarding Experience

Trading in the forex market is an exciting and rewarding practice. Remember that Forex is not a simple game that you can play with a few simple tricks. The most lucrative strategy for forex traders is to let money ride.

In the forex markets, volatility is the name of the game. Prices swing, and trends can turn on a dime. Trading needs a healthy amount of patience and discipline.

With that said, it’s hard to go wrong with a reliable AI trading platform. Research your options and ask the experts. With the right platform, you’ll see all that forex trading has to offer.

 

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Archives, Banking, Global Trade Daily

How Forex Trading Is Largely Expanding Globally

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Forex trading is growing rapidly around the world. For traders, this can be a welcome sign. For forex brokers and banks, there are many reasons for forex to expand globally. Forex trading is expanding so quickly because of its convenience and accessibility. In this article, you’ll see some of these reasons why forex is expanding in popularity around the globe.

Definition of Forex trading

Forex trading is the term given to the exchange of one currency for another, in order to profit from fluctuations in relative values. The forex market is a global marketplace and has become larger than stock markets with trillions of dollars per day traded between international currencies. This business includes buying one currency on speculation that it will increase in value against other currencies, or selling one currency on speculation that it will decrease in value against other currencies such as Bitcoin and Ethereum.

It should be noted there are risks involved when forex trading; however forex traders can still make profits over time periods due to these prices changing relatively quickly compared to stocks where changes take place much slower.

Forex trading is an international market

The forex market is truly an international one. Day traders and forex brokers are not limited to the forex markets in their own nation but can operate anywhere around the globe.

The forex industry has been growing steadily for years now and will continue to do so as more people see it as a good investment vehicle or currency converter package. If you want some investors who already invest in foreign currencies, then this could be your main source of potential clients. It’s really just like any other form of business as long as you have a sound forex trading strategy, you can be successful.

What are forex traders doing?

The forex market is one of the most exciting markets to trade in and there are several things that forex traders do on a daily basis. A trader will need to analyze the currency data for each pair they want to trade before taking any positions. This includes overall sentiment combined with technical analysis such as chart patterns or momentum indicators. When it comes time to execute trades, your forex broker may take care of this for you but some people prefer executing their own orders manually using a platform like MetaTrader (MT). There could also be other tasks involved if you’re working as part of an international team: coordinating updates between forex traders and forex brokers in different time zones, fielding requests from forex clients for assistance with strategy or execution of trades.

As of now, this market has spread across the whole world and it’s not planning on slowing down. The latest expansion came in the form of Fsca forex brokers in South Africa and will continue to grow every year. Getting into this game has become more profitable than ever because of this.

The forex market has grown exponentially in the last decade

If you look back into the last 10 years, forex trading has grown exponentially. Looking at the forex market in 2008, there were about $US$48 trillion traded, and today that number is closer to $US$80 trillion which shows a growth of over 50%.

Forecasting for the forex industry’s future looks very bright with estimates from analysts predicting it has grown by another 33% before 2020. The forex industry as a whole employs more than 400 thousand people across its various sectors (such as retail sales, IT, finance) so this kind of expansion could create up to 250 thousand new jobs during those five years if history is any indication. These numbers are also expected to increase overseas due to heightened globalization efforts seen throughout Europe especially since Brexit along with other forex markets such as India, China, and Russia.

It will continue to grow at a steady rate, with forex trading making up 40% of the world’s total market.

It’s a global industry that has seen over $5 trillion in daily turnover

The forex market has seen a global revolution over the past few years. In forex trading, people all around the world participate in buying and selling currencies with one another on a daily basis to make money off of fluctuations in exchange rates.

Forex traders are typically active investment professionals who trade forex as their primary occupation. It’s estimated that up to 80% of forex volume is traded electronically by computers (automated forex trading).

Forecasting currency rate movements can be challenging but it also carries substantial risk for failure. However, successful forex traders may earn more than $300 per hour or even more depending on how much they’re willing to invest into this type of venture.

The markets are open 24 hours a day from Sunday night through Friday afternoon. Forex trading is a global forex investment opportunity for individuals, funds and organizations of all types and sizes who want to invest and hedge their currency risk in the international markets.

How does forex trading work

Now it’s time to learn the process of forex trading.

-forex traders have a specific currency pair which they monitor on their computer screens

-they offer these currencies to the trader and charge for them

-The individual then decides whether or not he wants to buy those pairs of currencies from the broker, with his own money. If so, he will make an order that tells him how much forex he is willing to spend. The broker can either accept this request (in which case it’s called “taking” the trade) or reject it (it’s called “nixing”). When accepted by a broker, it becomes what is known as “a live deal”. Forex trades are completed in real-time, so when your order goes through you’ll know it.

-forex traders can also trade on a forex exchange

-in this case, they are trading currency pairs with other people (usually from the same country) that go through the forex market at about the same time as them

As you can see, forex trading is here to stay and it’s expanding all the time. It has become a very profitable market that sees newcomers almost every day. People who educate themselves in this business have a huge chance of success and, since it’s a global market, that will result in enormous wealth. If you’re keen to learn a new trade, this is perhaps perfect for you.

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What’s In Store For the 2021 Stock Market?

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The past 12 months have been an exciting and interesting time for all the stock exchanges around the world. Amid a global pandemic and political changes in dozens of developed nations, nearly all the key indicators showed surprising strength and durability, including the Dow Jones Industrial Average and the S & P 500. The Dow took a temporary hit at the beginning of 2020 when COVID struck, but since then has come roaring back.

It not only made up all those lost points but has tacked on about 4,000 more, currently hovering close to the 35,000 mark. The S&P 500 did almost the same thing, falling rapidly from mid-February to mid-March of last year, only to recoup all the loss and rise even higher, now sitting near the 4,300 mark. Here’s what the rest of 2021 could have in store for anyone interested in taking part in the global securities markets.

What’s the Purpose of the Stock Market?

Before examining what the rest of the year has in store for corporations and investors, it’s important to recall the two reasons the securities markets came into existence. Even after more than a century of daily buying, selling, and deal-making, those two purposes still underpin the existence of all the major global exchanges. The first purpose is to allow organizations, also known as listed firms, the chance to acquire capital so they can go about their daily operations, grow, and prosper. Second to that, but no less vital, is that the exchanges give ordinary investors the ability to benefit by owning a piece of any entity that is listed on the trading board.

Businesses Raise Money as Needed

For example, a new business might not have enough luck raising the funds it needs via private sources, loans, and angel investors. When that happens, it has the chance to apply to appear on the exchange’s board and accept direct capital inflow from the public, through a network of brokers.

Private Citizens Can Earn a Living

For individuals who want to own a portion of any listed entity, shares are available for sale. There’s no limit on investing timelines or amounts, as long as the purchase is legally made through a licensed agent. Many stock market enthusiasts who want to earn regular income learn how to day trade and take part in daily sessions. By definition, day traders close out all their positions each day, never holding equity shares overnight.

Corporate Earnings Estimates

After the COVID pandemic restrictions eased up and the global economy began getting back to normal in early 2021, many corporations unexpectedly exceeded earnings expectations. As is the case with share prices, earnings can sometimes travel for a while on built-up momentum. But even though most of the prognosticators and Sunday morning TV shows were expecting to see 2020’s momentum die down heading into the new year, it was not as significant as expected. Then, dozens of major companies began reporting record earnings early in the second quarter of 2021, which means there’s likely a new wave of enthusiasm and optimism coming out of the pandemic.

Overall Direction and New Leaders

Since March of 2020, the overall direction of the equity markets has been generally upward. Even in the doldrums of the later part of last year, the general trajectory of share prices was up, a megatrend that has continued to this day. What new leaders are emerging? Some of the biggest winners of the past six months have included companies in sectors like pharmaceuticals, healthcare, retail, and home improvement. Now that the economy is focused more on home delivery, online commerce, and working from home, merchants who have plugged into those major trends are enjoying broad-based success.

Low Risk, Not No Risk

Even the most diversified portfolio of blue-chip stocks still comes with risk. It’s essential for newcomers to the marketplace to understand that low risk is not the same thing as no risk. Anyone who puts their money on the line for the purposes of earning a profit from stocks, bonds, forex, options, commodities, or anything else, faces the ups and downs of the international economy. However, for prudent traders, there are multiple ways to minimize risk, keep an eye on account balances, and take part in one of the most exciting financial enterprises on earth: the international securities exchanges.

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Archives, Banking, Banking on Global Trade, Global Trade Daily

NEW YORK RANKS AS THE TRADING CAPITAL OF THE WORLD

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DailyFX has analyzed the finance and trading skills index, showing which skills can increase your salary, where in the world has the highest number of jobs and what salaries you can expect in the finance and trading sector. 

However, some words of warning: The research and data used in the DailyFX study were taken and analyzed in January, BEFORE the COVID-19 pandemic had impacted global financial markets. This study can be used as a reference and comparison to pre-pandemic areas, such as the health of the financial job market.

“The Top 20 Cities in the Global Financial Centers Index (GFCI)” was culled from data on finance and graduate vacancies per location, individual roles with the most availability and the most financially lucrative cities for each of these roles. Focus on the wider financial industry includes specific reports for trading.

Among the findings:

-London and New York lead the way with the most vacancies per trading role

-Having the skill of UCITS can increase your salary by more than $26,000

-San Francisco leads the way in locations for earning the most in finance

OPPORTUNITY FOR A CAREER

New York provides the most opportunities for those in trading roles. Combined with London they make up 42 percent of all trading roles available at the time of research. The U.S. provides the bulk of the locations, 59 percent of the 24,174 trading roles, with only Zurich and Frankfurt providing Europe’s next best locations.

Rank City Total No. of trading roles
1. New York 5,546
2. London 4,709
3. Chicago 2,823
4. Los Angeles 2,268
5. San Francisco 2,014
6. Toronto 1,761
7. Boston 1,636
8. Sydney 1,322
9. Vancouver 632
10. Dubai 520

 

TRADING ROLES: HOW MUCH DO THEY PAY?

 Rank Trading role Top earning location Salary
1. FX Trader San Francisco $98,280
2. Broker New York $72,852
3. Sales broker New York $74,255
4. Commodities trader San Francisco $63,667
5. Equity Broker San Francisco $85,774

 

OPPORTUNITY FOR A CAREER

Leading the opportunity index is London, with New York joining it at the top of DailyFX’s findings. Both cities provide significantly more opportunities for current professionals than their nearest rivals and graduates with 5.54 percent and 4.54 percent of all vacancies at graduate level. While other locations performed well, in the majority of cases the percentage of vacancies aimed at graduates was well below 1 percent. DailyFX’s results show that the worst location for graduates to look for a new role is Dubai with only 0.01 percent of all roles destined for graduates.

Rank Location Total No. of finance Vacancies  Total No. of finance graduate vacancies    % of graduate positions

 
1. London 32,274 7,499 5.79%
2. New York 17,688 5,881 4.54%
3. Chicago 8,849 1,503 1.16%
4. Hong Kong 8,801 1,432 1.11%
5. Singapore 8,584 971 0.75%

 

FINANCE ROLES: HOW MUCH DO THEY PAY?

Actuaries continue to earn good equivalent salaries at all three of the comparison levels shown. Budget analysts have the highest minimum salary of $53,501, while investor relations can achieve the highest maximum salary at $86,587.

One role with a wide range in potential salary is accountant. The research found that this role, which was most in demand according to vacancy data, has the lowest minimum salary of all roles analyzed at $39,942. Its maximum offered salary peaks at $78,523 but the overall average of $59,763 places it as the third lowest earning average salary.

While much of this data can be used as a guideline, many of the skills underpinning these industry roles are what many vacancies will be looking for. DailyFX undertook further research using the 20 most commonly appearing skills and experience criteria to understand how each particular skill and experience is valued in the industry. This was then used to reveal how the inclusion of each impacts the potential salary offered.

You can view more on the study here: www.dailyfx.com/forex/fundamental/article/special_report/2020/05/13/The-Financial-Trading-Skills-Index.html

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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Getting Caught on the Backswing – Will US Sanctions Undermine the Dollar?

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Since the Bretton Woods Agreement in 1944 there has been one currency that eclipses all others for international trade: the U.S. dollar. The dollar dominates when it comes to reserves and the settlement of trades, a hegemony that affords U.S. foreign policy incredible strength on the world stage. However, the U.S. reliance on the strength of the dollar to pursue far-reaching sanctions is also beginning to cut at the roots of that strength, as allies and global trading partners simultaneously pursue their own economic agenda and react to perceived over-reach by U.S. policymaker. 

A View from the Top

In 2019, the dollar comprised over 60% of global debt, more than 60% of global reserves for foreign exchange, and was the medium used in 40% of international payments, according to the European Central Bank (ECB). Despite the economic output of the Eurozone roughly matching that of the U.S., the euro accounted for only 20% of foreign exchange reserves and just over 20% of international debt (1).

This allows U.S. foreign policy a potency lacking in other international currencies. The Trump administration has relied heavily on this dynamic, imposing coercive economic measures on a wide spectrum of targets from Venezuela to North Korea and exponentially increasing the number of sanctioned entities. In fact, the U.S. sanctioned around 1,500 Specially Designated Nationals and Blocked Persons (SDNs) in 2018 alone, almost 50 % greater than in any other single year. 

Growing trends have become noticeable in the financial streams flowing between borders; a rise in the use of the euro, RMB and ruble as forex currencies, development of routes around the conventional financial sector, and flurry of interest surrounding the nascent potential of cryptocurrencies. The major drivers of these changes are unrelated to sanction policy and are more tied to the politicization of U.S. monetary policy or the inherent economic interests of other nations and trading blocs, including turning their own currencies into global standards. Regardless of the drivers, these developments suggest an international system ill-at-ease with the power of the dollar.

Secondary Nature, Primary Threat

The unrivaled strength of the U.S. dollar affords U.S. policymakers a weapon unavailable to any other nation. This is built on by the ‘secondary’ nature of U.S. sanctions – extending the impact of sanctions to non-U.S. entities who do business with sanctioned entities or individuals – that leaves few avenues to evade the regime. 

As virtually all dollar-denominated transactions pass through the U.S. financial system, even if just momentarily when they are “cleared,” very few businesses are able to trade with the targets of primary sanctions without themselves falling under the secondary regime. Violators are potentially liable for sizeable fines or other punishments, including being locked out of the U.S. financial system themselves. 

While this is a useful tool for closing down avenues of terrorism, crime or other illicit activity, it also means countries that disagree with the targets of U.S. sanctions must either comply or place their own industry at risk. The EU-U.S. divergence on the Iranian Nuclear deal, or on U.S. sanctions towards Cuba, are good example of this. 

This increasing sanctions activity provides the seedlings that may undermine the dollar’s strength, as it prompts allies that disagree with sanctions regimes to develop alternatives to the dollar – such as the Euro, Chinese RMB or Russian ruble. Special Purpose Vehicles, such as the EU-Russian INSTEX, are created – albeit with difficulty – to provide routes around the conventional financial system. 

Alternatives

Against this politicization of the dollar, various countries are developing alternatives. The euro is staking its claim with the development of the INSTEX vehicle and a declaration by Jean Claude Juncker, then-president of the European Commission, “to do more to allow our single currency to play its full role on the international sector” (2).

Similar gauntlets are being thrown by the ruble – Russia has been developing its own payments system since the Crimean sanctions in 2014 – and the RMB, with the Chinese Cross-Border Interbank Payment System (CIPS) launched in 2015. Given the size of the Chinese market and its growing world position, the RMB could theoretically pose a challenge to the dollar. However, the politicization of the RMB’s value – witnessed most recently in its rapid devaluation targeted at injuring the U.S. as part of the trade war – undermines its use as a global currency in the near to medium term. 

Another potential pitfall for the dollar is the development of new financial technologies, including the much-discussed Blockchain and cryptocurrencies. Such systems allow for the circumvention of the U.S. financial system and enable payments in relation to sanctioned activities, and have already have been used to facilitate illicit payments in North Korea and Iran. 

Mobile payments are also on the rise, further reducing global exposure to the dollar. However, as with other examples above, the use of some of these alternatives are being driven in significant part by illicit activity, which may lay the seeds of its own demise or limited adoption. 

The dollar’s strength on the international stage is undeniable, affording U.S. foreign policy unparalleled reach and potency. However, increasing international attention is being given to the Trump Administration’s fondness for relying on coercive economic measures in foreign policy, including the imposition of sanctions, tariffs, export controls, and investment restrictions. 

Each time a trading partner or ally objects to the U.S. policy goals but is forced to accept a new sanctions regime because of the dollar’s dominance, that dominance is eroded. While the dollar remains by far the best safe-haven for investments, backed as it is by a resilient economy and a history of stability, the potential corrosive effect of sanctions cannot be ignored. The future use of sanctions should factor in this unintended consequence and overall sanctions policy designed to ensure the long-term dominance of the U.S. dollar. 

 

Matthew Oresman leads Pillsbury Winthrop Shaw Pittman’s International Public Policy practice, carrying out high-profile activities in many of the world’s capital cities. He principally advises governments, political leaders, businesses and NGOs on achieving their most important objectives. He regularly designs and implements legal and policy solutions, including managing integrated U.S. and Europe-based initiatives. He advises global businesses on entry into emerging markets and compliance with U.S. and international regulations.

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(1)https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp190215~15c89d887b.en.html

(2) See Juncker, J.C. (2018), “The Hour of European Sovereignty”, State of the Union Address 2018 – https://ec.europa.eu/commission/sites/beta-political/files/soteu2018-speech_en_0.pdf