What is a demo account?

 What is a demo account?

 A demo account is a virtual account that allows a trader to   make virtual trade with it; it is a trading account that allows an investor to test the feature of a trading platform before putting his/her money. Demo account are free of charge and they represent  the actual market conditions, some forex brokerage firm limit the number of days for the demo account but a good  broker will allow an unlimited access of the demo account. The demo account are virtually funded and this allow the investor carry out a programmed trade in order to be familiar with the in and out of the trading platform before funding or placing a trade.

It allow a trader to experiment wide range of trading options like options, futures, etc it allow an investors to be familiar with the various forex tools and to try several trading strategies at no risk.

 Demo account is a risk free forex training account, it only require your email address,  name and phone number, you don’t have to deposit fund before you can start to use it,  therefore you have nothing to lose while practicing the forex.

 Demo account enable you t o develop a trading system that works for you, understanding any forex trading platform  for the first time can be challenging and time consuming, likewise  venturing into any forex trading platform without actually  understanding it can amount to  a great error. Therefore forex demo accounts are designed purposely to solve the above issues.  To turn any new forex dummy into an equipped trader.

 Using demo account allows any forex dummy to test various trading strategy before coming up with the best one that suit him or her.  Demo account will allow forex trader to weigh the strength and weakness of the various trading skills before adopting the proven one without risking his money.

 Most forex trading platform come with their various tools, software designs and some distinct features, therefore using a demo account will allow any new forex trader to be familiar to all these technicalities before venturing into the real forex and therefore saving your money.

 All what you do in the demo account is with the  virtual money  and most of the time forex brokers will put a lot of fund into the demo account and this means you venture into any trading strategy, taking several position, testing, learning  and taking analysis without any fear .

 Another thing with demo account is that you will lack one skill of real risk management , trading  without your real hard earned money will have psychological effect on you because you may takes several position without undertaking the necessary forex research.

Trading in demo forex account   may make you to have a poor management skill and high profit expectations, most forex brokers will deposit large amount of money into the demo account ranging up to $100, 000 and a real forex investor may not have that money in reality.

 Opening a new demo account is very important as this will help you to learn forex trading and to be familiar with your trading platform before actually putting your money.

Forex Trading Technology

 Forex trading technology

Forex trading technology is any platform used by forex traders to manage their forex transactions they are    generally made for personal forex trading. They are of different types designed for different purposes, but they generally support the following functionality.

·         Manually   management and execution of forex trading

·         Chart platform for  past exchange rate and technical analysis

·         Give recommended level at investors can open and exit trade

·         Execute trade automatically based on pre-programmed trading algorithms.

 They offer their user the ability to manually enter and execute trade with a registered forex online broker. This platform depend on a reliable internet connectivity   to operate efficiently, some platform can operate based on a software download and are mostly used by window-based computers.  

 Some forex trading technology will enable a user to manage a multiple account, support direct live online charting and algorithms trading support.

 Most forex trading technology has charting software that enable trader to technically review forex exchange analysis. It enables a trader to plot the progress of exchange rate overtime for different period.

 Forex trading technologies are of two types, the online platform and the downloaded platform all comes with its advantages and disadvantages.

 The online platform require no any download time and also no installation difficulties that may result, you  only need  your username and a password , you access it where ever there is internet connectivity with any device that support a compatible browser , non window based devices can access it and there must be a reliable internet connectivity.

 The download platform, need that you must download it to your computer before you can use  it, and after you have download it you also need to install it before you can use it for your forex trading,  the download time can take several  seconds, minutes to even hours depending on the size of the forex trading software and the speed of your internet connectivity,  one problem with download platform is that  some device that are not window-based cannot install it and therefore  they are restricted from using it.

 There is also a software update, some trading platform will provide the software update free for ever while others may not, software update are necessary because  most new version may give greater simplicity and increased functionality as well guaranteed online security.

 Forex trading software vary from a broker to broker or firm to firm, all claiming to give better forex experience to users. Below are some of the top forex trading platforms:

·         Avatrade: it is forex trading platform that offer range of trading platforms including Avatrade, Meta trader 4 and mirror trader.

·         Fxpro: this forex platform offer web based ,downloadable and mobile applications

·         Meta trader 4:  this platform allow user to analyze quote.

·         FXCM:  this offer multiple of platform to meet the need of every user, it allows its users to compare different platform and make choice.

·         Alpari: it offers Meta trader4, Meta trader 5 and Alpari option trader for users.

·         Oando fxtrade: it offers low spreads and immediate forex execution.

·         Fair forex technology: is a technology provider for online forex traders.

what to know about the stock exchange

 The stock exchange is a form of exchange that provides investors with a platform to buy or sell stocks and securities. Stockbrokers and  traders, can buy or sale  stocks, bonds etc in the stock exchange,  it also provide other  financial  facilities for services like issue  and redemption of securities and also the payment  of dividends and profits .

 Stocks, bonds, units trust, pooled investment and other securities are traded on the stock exchange, the stock exchange function as an auction market with investors buying and selling securities at a central location called the floor of the exchange.

 For a stock to be traded on the floor of the exchange the stock has to be listed  with the exchange, and to trade a stock an investor need stockbroker  to execute his order,  but modern  technology has made it possible for investors to trade stock online. Before trading on the exchange an individual must become a member.

 The stock are introduced into the exchange by an initial public offer in the primary market and are subsequently traded in the secondary markets, stock exchange is the most important component of the stock market, the price of stocks in the stock market are affected by the power of demand and supply, other factors also contribute to the rise or fall of stocks in the stock exchange, factors like quarterly performance,   company management team etc.

 Stock can also be traded outside the stock exchange and this called issue over –the-counter,   this is how derivatives and bonds are traded in the market. Stock exchange is the one of the most important component of global security market.

Trading software like electronic communication center, alternative trading system and ‘’dark pools’’ has taken away most of the activities of the stock exchange.

 The stock exchange has many roles in the economy; it raises capital for businesses by selling its stock in the exchange to the public.

 Stock exchange provide a means of borrowing  capital to firms through bonds  and other securities, thereby providing an alternative to bank loan. Stock exchange help capital intensive companies to go public, these companies need large capital at the start ups and   by issuing its stocks to the public it generate the necessary capital required.

 There are listing requirement before any company can be listed in the stock exchange, each exchange has its peculiar listing requirement, the world major stock exchange has their particular listing requirement of which each firm must meet before it  get listed.

Below are various stock exchanges and their listing requirement:

·         Newyork stock exchange: to get listed on the newyork stock exchange a company most have at least offered 1 million shares with total worth of $100 million  and most have make profit of at least  $11 million in the past three years.

·         Nasdaq stock exchange: a company must have offfered 1.25 million shares with total worth of $70 million and must have made not less than $11 million in the past three years.

·         The London stock exchange.  A company must have market capitalization of £700,000, three years of audited financial statement ,   minimum float capital of 25%, and sufficient working capital for 12 months.

how you need to know before in trading euro

Euro is the official currency of euro zone, 19 out of the 28 member state of the European union, it is the official currency of the European union, euro is in use roughly by more than 337 million Europeans, in Africa about 182 million are using the euro, euro has a total of 210 million people using it outside the Euro zone as of 2015 including the 210 million Africans. The euro is the second most traded currency in the world after the united state dollar with almost £1 trillion in circulation as of 2014 according to triennial central bank survey 2007. The euro banknote and coins is the highest in circulation, based on IMF GDP 2008 survey and purchasing power parity, the euro is the second largest economics in the world after overtaking the united state dollar.

The name euro replace, ECU, the European currency unit in  1995, with an exchange rate ratio of 1:1 to the united state dollar of US$1.173, the euro fall  in 2012  below  fall below US$1.12 FOR the first time in two years over concern  rise on the Greek  debt and Spain  economy.  As of march 24, 2015 the EURO/USD RATIO IS 1.091155 according to Google finance.

 In 2009 euro has increase trade in the euro zone from 5% to 10% because of the introduction of the single euro cu, other studies suggested  it at 3% while another study says  , the increase in the euro trade  rate is between 9-14%.

  Research also indicates that physical investment has increased in the euro zone by 5%, the stock value of FDI has also increase by 20% in value due to the introduction of the single currency, this shows that, the single currency has boosted trade in the euro zone, the introduction of the euro has increase investment especially in countries has previously a weaker currency. Euro has made firm to access financing without much difficulties, exchange rate within euro zones has been eliminated.

 Not as speculated by many, the introduction of the euro did little to increase the inflation rate.

 The euro eliminated the high risk to exposure to the exchange currency rate; it has eliminated the risk associated with exchange rate market both within and outside the euro zone. The main reason for the introduction of the euro is to eliminate the risk involved with exchanging currency and the costs. This allow people to benefit from previously unprofitable trade, banks has to charge same rate for within and cross border   transaction within the euro zone.

The new single euro has decrease interest in the euro zone, especially countries with previously a weaker currency like Greece, Ireland, Portugal, Spain, and Italy. The effect of the reduction of the interest rate combined with high liquidity has  affected the most,  are countries with lower past currency  and has forced them to borrow  money and this has rise their  public and private debt levels.   The euro was aimed at reducing the interest rate and there has little effect on the exchange rate and therefore the forex market.

check exchange rate using real time currency converter

 Currency converter,

CHECK YOUR CURRENCY VALUE NOW:

 

Powered by TransferMate

 A currency converter is a software  that can convert one currency to another in order to check its corresponding value,  the software can either be in web platform or a mobile app that convert one currency to another based on  current exchange rate or bank exchange rate.

 The web plat form of currency converter is based on a real market exchange rate while the mobile apps platform of the currency converter may need some manipulation before it can be used, in the mobile platform of a currency converter, the user need to input the current market exchange rate from time to time, to ensure that he/she uses the current exchange rate,

 In order to use the currency converter a user need to input  a unit of his own country currency like ‘’ 100 , 1000, 5000’’ etc and select one or more of the other currency he/she wish to check their value, he  will see the   new monetary value of the new currency.

 Currency converters aimed at maintaining current market value of currency from time to time, so that the calculated monetary value tally with real time result whenever the exchange rate varies, this is done by connecting to the database of current currency exchange rate, some currency converter update its exchange daily while currency converters every hour, therefore knowing which does every hour and which does on daily basis is important. Note that currency exchange rate varies with bank exchange rate, bank exchange rate is the real time exchange rate plus added profits, this is why bank exchange rate is mostly higher, and currency converters are based on real time exchange rate. So   before buying a foreign currency from a commercial bank, keep in mind that you will be charged more than the calculated monetary value you obtain from your currency converter.

 Currency converters are not bias, they display monetary value irrespective of buying or selling.

Currency converters are used for probing the monetary value of a foreign currency before buying, this is useful to a traveler, it is very important to know the monetary value a foreign currency before travelling so as to know the actual amount of money you are spending, because buying commodities with currencies like euro, British pounds or dollar makes it to look cheap to an uninformed traveler, while in reality may be expensive.

 as stated above , currency value can be  determined by contacting a local commercial banks, but note the  commercial banks ued to add a small amount of profit,  an online source like, Google finance, yahoo finance can give you a real time exchange rate for currencies 

CHECK YOUR CURRENCY VALUE NOW:

 

Participant in the forex market

Participant in the forex market

 There are many participants in forex market than any other market, ranging from government via the central bank, banks and financial institution, hedgers and speculators.

 The major participant in forex market are government and central banks, though the two are dependent on each other, most central bank operate based on government policy they work with federal or central government to keep the country currency at a certain value, some government prefer an independent central government, they function to maintain interest rate, keeping inflation rate at beeriest minimum level. They function to maintain a county’s foreign reserve at a certain amount to attain some goals. Some government works hand and hand with their central bank to maintain their currency value.

 Commercial banks also participate in forex market either between one bank and the other   or between banks and individuals  who need foreign currency  for  travelling,  commercial banks can carry out inter-bank  forex transaction  between  each order through electronic brokerage system, but this is done  on credit with banks that have credit relationship with each other,  larger banks with deeper  pocket will have better  pricing than the other. The smaller a bank is the less trading possibilities it can get.

 Most banks act as dealers and they are ready to buy or sell currency at the bid or ask price, they do so by selling currency at higher prices than they obtain it thereby making money in the process and therefore it is possible to see different banks with different exchange rate for same currency.

Hedgers: they are investors who try to avoid the fluctuating nature of the foreign currency, this happen in international business. In an international business an investor need foreign currency for selling to his client or buying from another business man.  This is where hedging come into play. An international business man from Nigeria who wants to buy electronics from a US based company has to pay the price of the goods in the US dollar, and must change his naira to the US dollar to pay the US based company.  Hedging come into play when it is a future contract. If the US dollar gains value over the Nigerian naira, the business man from Nigeria will have to pay more than the original amount. This is unwelcomed to most business managers and the best that they could do is to buy the US dollar and keep it to pay for the future contract. But it is not economical to do so. Therefore the Nigerian business has to apply hedging strategy to enter into a contract to lock in the exchange rate for that transaction.

Speculators: they are investors that take advantage of the fluctuating nature of the exchange rate to make money.  Speculators uses risky and uncommon strategies to make money from forex market, notable among them are the speculators is George Soros who took advantage of the fall in pound sterling and made a roughly profit around $1 billion in just a month, another speculator is nick leeso a trader with England’s    Baring Bank who on the other hand makes a speculation on the yen and led him loose $1.4 billion dollar.

Forex trading risk

  Risk is a probability or threat of damage, loss, liability or any other negative occurrence caused by external or internal vulnerabilities and that may be prevented by taking precautionary measures. In finance risk is defined as the probability that actual returns on an investment will be lower than the anticipated return. From the above, it means risk can be covered provided that the necessary preemptive measures are put in place.

 Forex trading is a highly risky kind of business because of its large size, volume, volatility, and its global nature. The market is highly liquid, large volume of currencies can be traded without actually changing any exchange rate, investors can take large positions because of low leverage requirement placed by most industry brokers, this is what make the forex market highly risky, because when the exchange rate of a currency pair an investor is trading changes, the investor gains when it is appreciated likewise when the exchange rate falls the investor also lose. For example  an investor can trade $500, 000 dollars by only placing $5000  and borrowing the rest from his broker, the fact is that  if you are using a leverage of 100:1   on $5000 invested , you  automatically control $500,000 capitals, if your currency pay get appreciated by 1% you get profit of $499, 000 capitals  but if the currency move against you a loss of 1%  will lead to a loss of $499,000 0f capitals or all of your $5000 original investment , this happen because of the used of leverage in the forex market, unlike other investment where a  loss of 1% will only mean  $50 dollar loss.

 Forex market has only few commodities traded unlike stock market that has tens of thousands of stocks to trade, they are the eight pair of the currency pair ,  they are USD/JPY,USD/CHF, EUR/USD,GBP/USD plus the following USD/CAD,AUD/USD and NZD/USD and other cross currency which are just the combination of the major currencies what forex investors has to do is focus only on the economic and political news of this major countries and no how to profit from it. in forex you can benefit from each rising and falling because when you buy you are also selling and you can take different position from time to time because of the high liquidity of the market, any time you want to buy a particular currency others are ready to sell. One advantage of forex is that margins are low while leverage are high meaning with your little investment you get enough capital to take several positions.

 There things you need to put in place in other to benefit from forex market and lower risk in the forex market:

·         Exit the market when you reach your profit target.

·         You should be lowering risk wile trading forex

·         Setting your stop orders above your limit orders

·         Control risks by determining your exist point.

Lose is inevitable in forex trading, even the forex gurus too make loses, the best way to trade forex is to minimize your loses. Find forex marketing strategies and stick to it.