Facebook Twitter
Facebook Twitter
Home Blog Page 25

The Risks of High-Frequency Trading (HFT)

By
Market Place
-
0
What Makes an Elite Trader

At the beginning of last year, the Members of Congress in the US, Edward J. Markey, stated algorithm trading or high frequency trading clearly corresponds to a high level of risk to the safety and permanence of the capital market in the US and the fact it should be truncated as soon as possible. And he isn’t alone in saying HFT does indeed pose considerable risks to the trading infrastructure.

Many financial analysts claim to back this same assertion with the proof taken from recent market events, such as the Flash Crash along with the loss Knight Capital as a result of a software malfunction. Mentioned below is the summary of the overall risk associated with high frequency trading:

  • The sheer speed of the trade puts most trading styles at a considerable disadvantage
  • High frequency trading intensifies market volatility
  • Most of the ‘other’ types of investors usually run away from it
  • HFT volume has a risky high proportion of the total traded volume

But it is also important to understand the fact not everyone agrees with the analysis made in regards to the potential dangers of high frequency trading. It is true the machines have taken over when you talk about modern trading. They have taken the place of human specialists or the smart market makers and a majority of the trading quotes, offers and bids which come flowing in today flow in through high frequency trading computers and systems.

And it is also true the Flash Crash that occurred back in 2010 is a great example of the dangers posed by high frequency trading when Waddell & Reed incorrectly keyed a trading order which resulted in a terrible market dive. HFTs went scurrying out of the scene as the market fell for a short period of time and there were no bid being placed and there were significantly big price dislocations demonstrated by the 10% market freefall.

A Drop in High Frequency Trading

Despite the fact that several trading companies get to enjoy the high speed benefits of HFT, it has been seen that there has been a considerable drop in profitability using HFT. If you look at the reports from 2011 and 2012, you will see that those years saw considerable drops (7.8 billion shares each day to 6.5 billion shares). The drop was of 17%. Another thing to consider is the fact HFT is all about speed and co-location.

HFT providers such as Citadel, Virtu Financial and GETCO have to all constantly bring in new technology and upgrade processing units to match each other’s speed. According to a report, it was revealed GETCO spent a total of $37 million on upgrades.

Lower volumes are bad for HFT solely because of the fact the lower the amount of the orders that enter the market, the fewer the opportunities to make a bid/offer. Another problem that isn’t highlighted much is the fact the amount of traders who want to willingly use HFT is dropping. One of the major concerns with HFT today is the fact that it might blow out of proportion in the capital markets, just like what happened at Knight Capital. Companies employing HFT and the HFT vendors have both failed to display a successful effort to manage and control high frequency trading.

The only things you need to have are state of the art evaluation and tracking control systems to prevent events like the Flash Crash from happening again. Because if HFT isn’t controlled, the losses could easily keep piling up and then you would need to place a more drastic countermeasure: a ban on HFT, which most traders suggest should happen now. But if you talk about the future and improvements, then taking a drastic step like banning it now could overcomplicate the situation.

The science of HFT systems and processors enable the computers to analyze and predict your moves in the market which mean there could be landmines everywhere you look. It is no surprise the framework of modern trading has been forever altered. A human hand that just takes a couple of seconds to conduct a trade now is replaced by a machine which can do the same trade in a millisecond or a microsecond.

The fact is HFT can neither be called bad nor can it be called good and that’s the way it’s going to be in the future as well.

- Advertisement -

The Future of Trading – Part 1

By
Market Place
-
0
Forex Traders Chart

With so many technological advancements, predicting the future of trading can’t really be that difficult. Computers can break down currency transactions to search for good stock prices just as any normal trader would. However, the only major difference between human traders and machines is that machines don’t employ the use of chat rooms, which, if you can remember, have attracted a high degree of scrutiny from trading regulators who attempted to disclose all evidence leading to manipulative practices in the market.

And because of this high frequency trading is seen as a solution to the Forex market and has now become a benchmark in case of trading complications and a crisis in the markets. So, what are human traders to do then just babysit the algorithm trading systems? ICAP’s Justyn Trenner stated,

“To the extent the future is machines, its humans babysitting machines, it’s like the U.S. Air flight that landed on the Hudson River. The pilot had to control the angle of descent manually and used the autopilot to keep the plane level; Captain Sullenberger could only do this because he knew how to use the machine”.

And it is true when you think about it, because can you ever go to sleep behind the wheel after putting your car on cruise control? However, if you look at the algorithm and high frequency trading from a broader perspective, you will realize the machines can significantly aid traders in choosing the most perfect trade condition and help execute decisions fairly rapidly.

The chief execute of C-View, Paul Chappell said,

“[Algorithms] seem the most appropriate way to execute a trade. We have implemented a tool to take profit and stop losses on each currency. This program automatically puts a risk wrap around our trades, saving us the manual effort of introducing the same controls manually.”

Over the last couple of years, you may have witnessed a great deal of change in the financial community, more specifically in trading and the investment markets. There have been some cutting edge advancements made pertaining to how trading data and information is transferred and how traders use this information to conduct fast trades. Not to mention the significant progress which has been made in regards to how traders communicate with each other.

>The technology has made a great impact on the financial industry and has helped democratize entire equity markets. In simple words, traders are now seeing an end to trading floors where trades in stocks, commodities and foreign exchange. This is how technology impacted trading:

Simultaneous Access and Information Gathering

For a majority of traders and investors, the technological trends shifts in trading have provided a beneficial window of opportunity. And traders and investors these days and for the days to come will not have to lead a central position at an important hedge fund and neither would they have to work hard to make important connections with the brokerage community over at Wall Street.

This is mainly because of the fact that all vital information and updates pertaining to the stock and Forex markets are now made available instantly to all traders via news sources like CNBC and Bloomberg as well as on websites like Forbes.com and Seeking Alpha and social media networks like Facebook and Twitter. This automation and the free flow of financial notifications give a strong chance to every trader to make his trading decisions and implement his strategies. Information is now accessible to anyone and not just the top dogs in trading.

Individual traders can now eliminate the time limit and delays that over the years have accompanied trading reports pertaining to government inflation and corporate earnings and data. Traders of today and tomorrow will use different stock and Forex trading and investment platforms designed to help you trade via your smartphone, tablet, PC, and laptop from virtually anywhere in the world which means you will never be detached from the financial world. Plus, traders will also get financial notifications on the go using various trading applications.

Moreover, all this innovation has also allowed traders to come up with various types of strategic trading methods they implement in order to establish their positions in the financial markets for assets. Algorithm trading or high frequency trading have been established as the most popular form of trading traders from different financial firms have started to use. In fact, there are many recognized and well-known traders in the market who firmly believe that algorithms, along with complex charting and analysis of trades, can make traditional approaches to analysis and evaluation redundant.

Although this is disconcerting to some traders but you cannot undermine the fast developing trends technology is bringing, especially at this stage. It has therefore become increasingly apparent that electronic trading has taken over a considerable portion of both stock and Forex markets.

Increased Trader Competition

Ryan Jordan who is a market analyst at Prime Trade said that,

“It is now relatively easy for individual traders to gain access to a wide variety of asset classes, and to trade them high efficiency execution. This is why there is such a high level of competition from broker to broker to carve out larger sections of the market.”

 

If you look at it from a broader perspective, competition can be a good element here. And this competition has resulted in various brokerage firms drastically altering their approach in order for the financial communities to take notice. For example, most brokerages firms have guaranteed, that’s right, they have guaranteed stock and Forex traders a ‘trading execution’, which means they ensure traders their stock orders will be executed at exactly the price levels they want. But, as you may know, guaranteeing this is impossible when market volatility sets in, making price execution impossible.

Secondly, a majority of modern-day brokerage companies have explained price slippage can be devastating, especially when you’re talking about a highly volatile market. And this is where trading platforms come in and many platforms have undergone several improvements to guarantee efficiency in trading.

The future of trading is bright although it is too soon to be predicting any trends changes. When you talk about trading, marketing specialists have predicted that three or four year down the line even non-professional traders will also be able to establish themselves in the market for assets and the Forex market, which is a good thing.

- Advertisement -

The Genesis of Algorithm Trading

By
Market Place
-
0
Stocks Chart

 

“Algorithmic trading frees you from the drudgery, but do you have good ideas? There aren’t that many masterpieces out there.”  EquaMetrics’ Christopher Ivey

Several traders and investors in the global money markets have been for quite some time transforming their entry, exit and financial management and investment strategies into automated computerized trading which in turn allows the computers to trade for them. And you have to understand that one of the biggest advantages of using technology is the fact that it complete eliminates any emotion. It takes the emotion and any bias right out of the trade.

However, it is also important to note that when you let the machine do all your work, especially when you talk about trading, there are bound to be a few mistakes and these mistakes can be pretty much devastating for both traders and the markets. For example, let’s go back to the ‘flash crash’ which happened back in May 2010. And it happened in August 2012 as well when the trading software used by the traders and investors at Knight Capital Group Inc. broke down. What this crash did was cause a series of unintended stock trades which resulted in a $440 million loss for the company.

And the irony of all it was the fact that Knight Capital Inc. was known in the financial world as a market trendsetter and trailblazer which employed the services of experts and seasoned traders and investment specialists who had the ability to monitor trades on both sides of a particular security to make sure that the market functions smoothly. However, despite the probability of setbacks, almost all of Wall Street now heavily depends on algorithmic programs to conduct trades quickly and decisively.

There is no doubt about the fact that many traders have mixed feelings about using computerized programs to run the show and say too much algorithm trading might just destabilize the markets. And another thing, algorithm trading isn’t something that was invented a few years ago. The concept was implemented several decades ago.

Algorithm Trading – A Look Back in Time

Back in 1951, a student from the University of Chicago, Harry Markowitz, acted on the advice of his Ph.D. supervisor, Jacob Marschak, and proceeded to complete his dissertation on how to successfully apply complex mathematical algorithms and concepts and fuse them with the financial world, more specifically, the stock markets. The result, however, turned out to be quite fascinating and transformed into a modern portfolio explaining the difference and conflict between a security and how it may affect the profits risk-averse traders demand when dealing in potentially riskier securities.

Back then, the normal method to calculate and determine a variance in securities included a thorough evaluation approach which was designed by John Burr Williams in the 1930s. Investors used Burr’s price-to-earnings ratios and other factors pertaining to the overall statistical health of a company or organization. These methods helped traders at the time to determine whether or not the real price for a security became a standard tool for analysts.

An Enhanced Trading Portfolio 

Once Markowitz came up with his brilliant new method, he aided in the development of various algorithms that do all the important and necessary calculations to make an enhanced trading portfolio. With his intellectual contributions and the advent of the IBM System/360 central processing unit in 1960, strategy traders and investors as well as various financial economists had the power to methodically evaluate millions of information and data centres that have been produced since.

Around the same time, there was another trading methodology that became popular, named the Signal theory, a strategy that implemented to extract various patterns and information from a given set of data. Stock charting experts and analysts were never too worried about the price of a security. What they were concerned with is how much would the price fluctuate. The data extracted or collected from a fluctuating stock price drops in value far too quickly. So, when investment companies were emphasizing on a core and fundamental analysis that would aid in the execution of trades stretched over a period of several days or weeks, the signals experts detect have to be executed right then and there.

Investment companies since then have been trying not to rely too much on human trade executions and decisions and that is why most of them switched to using computerized programs as algorithms are designed to conduct instantaneous trades on the fleeting information given. Long-Term Capital Management, which was established in 1994 by John Meriwether, employed algorithms and computer programs to identify tiny fleeting variances in stocks and securities so they could make hefty profits.

On the other hand, the company was also experiencing a shortfall in yearly profits solely because of the fact there were other firms which began to use algorithm trading technologies. This led to LTCM devising other strategies that didn’t quite seem to pan out and resulted in the fund losing everything in 1998.

With the downfall of LTCM, there was little consideration to the potentially destabilizing effects of algorithm trading in the money markets. And within a decade or so, algorithm trading transformed into nano-trading. Nano-trading is all about catching the signal faster than others. Even a second seems like forever in the financial world. For example, an algorithm trading centre near the New York Stock Exchange would use its servers to detect and catch signals a millisecond faster than a nano-trading company which is further away from the stock exchange.

It is also important to understand that traders and investors, even small ones, would never attempt to rely on the basic fundamental evaluation methods. And according to reports by chartists, algorithm trading will rule the trading world and looking back at history, it is makes sense to expect more problems associated with algorithm trading in the future.

Although algorithm trading has its merits and can prove to be a money-making tool, if executed correctly, at the same time it is also imperative you never substitute the use of technology for cleverly thought-out and well-executed trading.

- Advertisement -

Technical Analysis: Why Bitcoin price is falling?

By
Market Place
-
0

According to Bitcoin technical analysis, it has been identified that the uptrend is likely going to be reversed from current market levels. An enthusiastic market breakout has drizzled which has ended up losing the vital momentum. If the resulting downwards trends is just a correction, there may be a powerful turnaround in the market in the near future. However, if the big players in the Bitcoin market fail to be on top of their game, things could take a turn for the worse.

Takeaway

It is important that traders and investors both be careful and prepare for a powerful price reversal. The advance has been losing critical momentum because there have been several indications market conditions are worsening and it is experiencing a lack of volume in terms of transaction and reduced trader participation. It has also been identified the prices will reverse from current levels and will bounce back to $600 and will retrace almost 50% of the advance, which is $520. It is important you understand that the idea of complete price retracement and resumption remains active.

A Comparison with an Earlier Advance

According to the Bitstamp Daily chart, which has been indicating a price action since March 2012, the strong advance which took form in October last year is being supported by the analogous behaviour of the momentum signals, with MACD being at the lower half of the chart. On each consecutive higher level shown by the MACD, the market price has formed an equal high. This coordinated action between the price and the indicator paves the way for the advance and as you can probably see, the results become quite evident in November high.

If you look at the right side of the chart given below, you can see the current advance making a local high, but compared with the peaks formed during the downfall, the local high can still be considered a lower high. However, if you take the momentum indicator into account, you will see the price has increased to the correspondence of a MACD rise in January, but the actual price cannot be seen anywhere near this peak. This occurrence is what is known as “reverse divergence” or “hidden divergence” and is displayed on the chart by red lines which are connecting with the higher highs.

Bitstamp Daily Divergence

As you can probably see, the volume of trade has substantially but gradually declined during its downwards spiral from the November high. If you are thinking something here isn’t what it seems, you are right because a supposed breakout has now advanced on a seriously low volume in the market.  Notice how the rise in price in October 2012 could also be associated with higher volume than the current advance. And that too in a period when Bitcoin adoption and participation was recorded at considerably lower levels compared to the penetration which has been achieved presently.

So, a reduction in trade volume in the market during breakout directly proves the movements in the market are not wide enough. This could be due to the fact that some of the big players with larger holdings have decided to exit that market or smaller traders have decided to release their holding in the exchanges while the big boys sat idle. You really don’t need to be a rocket scientist to figure out what happened here.

Bitstamp Targets

Viewing the Bitcoin prices charts from various other exchanges, Bitstamp and BTC-e for example, strangely indicates vague statistics.

In accordance with the four-hourly chart given above, Bitcoin prices are now nearing another falling trend-line (illustrated in red), and this one could possibly a nemesis to the advance. The two pink lines on the chart indicate a ‘Regular Divergence’ which is directly associated with the MACD indicator as shown at the bottom.

On the other hand, it is true that regular divergence can compound a couple of times. This occurrence works in tandem with the reverse divergence indicator on the four-hourly chart and should ring a bell. Although regular divergence can compound multiple times, the occurrence of this divergence in tandem with a reverse divergence signal on the daily chart is alarming. You should realize by now the Elliot Wave count indicates the current advance as rising to correction.

- Advertisement -

Why Twitter And Social Media Are Part Of The Future Of Trading?

By
Market Place
-
0

 

There is no doubt about the fact that we have now transcended into an era of mass digitization, technology and convenience. There have been some vast improvements in technology if you compare it with the earlier years. These changes, however, have also affected the financial market and communities. There have been numerous successful advances which have led to greatly impacting the financial world in a positive manner and in a manner which has guaranteed the industry’s prosperity in the coming years.

Below is the one of the latest infographics on the growth of Social Media, by Social Recruiter Guide:

And because of the ease of communication between people granted by this technology, it has had a far-reaching implication on how traders communicate in the financial world, especially when you talk about the democratization of equity markets. In simple words, less and less traders now trade from trading floors. Instead, they now use various social media platforms to conduct and discuss their trades with other traders.

The Role of Social Media in the World of Trading

There is no doubt that traders now use different social media platforms to encourage and conduct calculated stock trading, but why is that? The answer is…

The Mass Psychology Factor

It is important to understand that the prices of any stock are influenced in par with the psychology of the people. Social media networks, like Twitter and Facebook, have greatly increased and optimized your ability to talk about trading strategies, exchange opinions and share all the news relevant to any trade. So, as more people tend to join different social media networks like LinkedIn, Twitter and Facebook, the spread of information will increase drastically.

What this would do is make all the relevant information available for traders easy to be shared with all the users of the social network, reducing the time involved in implementing traders’ reactions to changing market trends and conditions. And at the same time, traders will experience a reduction in the time it takes them to respond to an opinion pertaining to any trading situation. For example, if there are rumours around a stock circulating in the financial markets and there is no information that could back this rumour, the social media users will take this rumour as a fact, hence increase the mass psychological factor.

Social Media Platforms Attract High Volume Trading Companies

You’d be surprised to know how many traders are beginning to change the way they think about various market trends. Various social media companies now pay Twitter for access to its vast information hub which comprises of data which can be used to influence the markets. The same social media firms also employ text analysis processes to evaluate and apply that data (which by the way consists of hundreds of millions of tweets).

In light of this, if these trends grow and social media platforms expand, it will most definitely (and they have) attract the attention of high volume trading companies and firms. Trading companies can benefit greatly from the information they get from Twitter and can use it to determine various social trends bouncing in the financial markets. These companies can also use the information to find out whether or not there is considerably volatility in the trading markets. This information is invaluable as they can also use it to confirm their sophisticated algorithms.

A good example can be the recent fall in stock prices when it was revealed that the Twitter feed of the Associated Press became a victim of the notorious “Syrian Electronic Army”. Their feed got hacked and the news caused a 140-point drop in Dow Jones, which in turn caused the market to lose approximately $200 billion.

This could be prevented through the use of algorithm trading and traders won’t have to fear any volatility caused by unwanted activity in the market. If you think about it, the stronger this information stream continues to grow on social media platforms, more people will begin to use the data to start trading without any hesitation.

Filtering billions of messages and tweets everyday would help trading companies to understand what directions the market would end up moving towards in the future. There is no question regarding the fact that billions of people use social media frequently and are growing less reliant on other types of media and because of this massive but productive change in communication, trading in the future will also experience a big change and there is no denying that.

- Advertisement -

High-Frequency Trading (HFT): How does it work?

By
Market Place
-
0
Stocks Chart

High-frequency trading (HFT), as the name suggests, refers to the quick transacting and processing of a large number of orders. It is a trading platform traders can use to place and execute orders. In HFT, traders make use of complex algorithms to analyze the financial market they are trading in and then execute the trades accordingly. In other words, HFT is a form of algorithmic trading with the use of the necessary tools that allow traders to make trades quickly.

Obviously, they do take into account the market conditions before going ahead with the trade. Traders who can think on their feet and make quick decisions are the ones who benefit the most from HFT.

History and Growth

Up until a few years back, HFT orders were responsible for more than half the orders placed in the market. However, HFT hasn’t been around for as long as some other trading methods and techniques. It only came to the fore at the turn of the millennium. The turning point was the authorization of electronic exchanges by the SEC, which took place in 1998. Back then, it took at least a few seconds for a trader to execute his/her trade. A decade later, decisions can be made and traders placed in a matter of milliseconds. Trading has never been this quick and it is only going to get faster in the future.

Despite all-round acceptance of the concept, it took a while for HFT to become a household term, at least as far as the financial markets are concerned. It took a 2009 article published in the New York Times to turn things around and make traders and analysts sit up and take notice that HFT is indeed a practice to be reckoned with, not just a passing fad. Things have changed since then, with Italy being the first country to impose a tax on HFT. Initially, traders were required to pay 0.002% tax on any equity transaction they made which didn’t last more than 0.5 seconds.

Rise in Popularity

What’s there to be gained from making trades in milliseconds, you might ask? After all, there are 8 hours when you can make trades on the floor and after that, you can continue planning your trades for the next day online. That being said, HFT really only gained popularity after the traders were rewarded for adding more liquidity to the market. The NYSE has in place a group known as the supplemental liquidly providers (SLPs). There purpose is to increase the competition in the market as well as make existing trades and quotes more liquid. To incentivize this practice, the NYSE pays a rebate to these providers.

Firms which engage in HFT are not known to have in their coffers a large sum of capital, as is the case with the largest trading firms and hedge funds in the market. Moreover, HFT firms are also unlikely to sustain their current positions in the market for too long, usually doing away with them before the end of the trading period. As a result, the Sharpe Ratio for HFT is considerably higher as compared to the usual buy and hold strategies traders use. This is the reason HFT traders compete with others of their ilk rather than against any long-term trader in the market.

How it Works

So, you might be curious to learn how HFT actually works. There are generally three main pointers which can be used to explain the HFT process:

  1. HFT firms choose the exchange they want to place the order on. Since they have direct access, they are not required to employ the services of a broker. They make the decisions pertaining to the trade on their own. Cutting out the middleman is what enables them to save time.
  2. HFT firms then execute their trades themselves or have a computer with a set of instructions programmed into it to do it for them. Of course, in case there are any variances, a trader has to manually execute the trade. That being said, it still enables them to make traders faster than is manually possible.
  3. Having intricate knowledge of how the market works and how trades are executed is important. You need to know how orders are placed and processed as you cannot get any additional help or assistance. Therefore, it is a given that HFT firms have the requisite knowledge to benefit from HFT.

So, this is all you need to know about HFT and how it works. As you can see, it can prove to be a winning strategy, particularly if you can find a way to automate the process.

- Advertisement -

Algorithm Trading: How powerful is it?

By
Market Place
-
0
Forex Traders Chart

Wall Street, along with the financial centres in London and Hong Kong, have become algorithm trading hubs where thousands of traders employ sophisticated algorithm programs to gauge the market trends and rely on the analytical superiority of these high powered super computer programs. Algorithm trading is carried out by mathematical robots and big data crawlers that still few people actually know about.

Believe it or not, algorithm trading is now done all over the globe which has led to the emergence of a new technological trend in financial industries of several developed nations. You have to admit that at times people fail to predict market volatilities, the bull and bear trends and a number of factors, which algorithm systems never overlook.

What is Algorithm Trading?

At its core, algorithm trading, which can also be referred to as high frequency or HF trading, is a trading process which is conducted by highly sophisticated computer programs. These programs determine various aspects of a trade, which include critical decisions like timing, trends and prices in the market and the all the factors associated with these factors that can either affect them positively or negatively.  These programs are also designed to function independently, which means they can if they choose to, execute an entire trade order without consulting the trader.

Who Uses Algorithm Trading Strategies?

High frequency or algorithm trading is most commonly conducted by traders belonging to mutual and pension funds and in some cases, institutional traders who aim to break down a big trade into smaller chunks solely to manage the impact and risks caused by it in the market. Algorithm systems are complex and are not meant for every trader. These programs are designed to search for crucial trading factors like the ups and downs in interest rates, minor fluctuation in the economy, important news and notification and a number other intricacies.

They look for areas where they can mark an existing opportunity that is before anyone else can mark them. The algorithm systems which are employed in today’s trading practices have the ability to disperse massive trading orders into manageable pieces so they could be used in a multitude of regions across the world and at a speed which will remain unmatched.

Why Use Algorithm Trading?

The central purpose of HF or algorithm trading is to reduce the risk involved in a trade as much as possible. They present traders with smaller deals which allow them to enter and exit the markets faster than any other trader, also allowing the HF trader to switch between different trading platforms and exchanges.

Moreover, all financial markets are now operated by various sophisticated and overly complex trading technologies which have given a considerable edge to most traders. At the moment in the financial markets, top companies like Goldman Sachs, Morgan Stanley, and Citi, along with Barclays have been using some complex computer programs and big data programming in the Forex markets, which are responsible for a majority of trading in worldwide markets.

75% of All World Trading Is Done Through Algorithms

According to statistics and analytical research done on high frequency trading, it has been identified that algorithm trading now accounts for 75% of all trading done in the world. And not only that, it was also discovered that market trends are established through not just the macroeconomic factors or data but they are also determined by the traders who vigorously compete against each other to see who comes out on top in terms of the fastest information processing and the most analytical business minds. These are backed by big numbers in financial algorithms which have the ability to evaluate massive amounts of data to determine top profits margins.

Algorithm Trading & the Forex Markets

Some of the best algorithm traders in the Forex market are interbank traders who have been incorporating algorithm trading for the past couple of years. However, it is important to realize that algorithm trading has not yet put most independent trades at a disadvantage because most traders are focused on the long-term and upon witnessing the increased liquidity in the financial markets along with stability in share prices, a majority of independent traders are now seeking to integrate their trading styles and strategies with algorithm trading techniques and technologies.

Forms of High Frequency Traders

There are varying forms of algorithm traders. There are many HF traders who are referred to as market swingers and employ trading strategies to trade mostly on signals to create a market through the provision of securities on every side of the buy and sell trade order.

Other algorithm traders use high frequency systems to try and get a fix on where the markets are headed in the short run. Irrespective of the trading strategies these HF traders use and implement, they all aim at one thing only: making massive amounts of money without increasing the risk involved in their trades.

In the past five years alone, there has been a considerable rise in the number of traders using algorithm trading systems and according to a statistical analysis report published by the Aite Group LLC, a Boston based firm, it was identified that a third of all trades that were conducted in Europe and the US in 2006 were carried forward through algorithmic programs. Keeping this number in mind, you can say that 2% of 20,000 US companies use algorithm trading, especially in the equity markets.

Matthew Rothman, an analyst at Barclays Capital, had this to say,

“Five years ago, ‘high-frequency’ traders, and few others considered the funds more than a niche strategy. However, the niche’s role now overshadows that of mainstream brokers mutual funds and hedge funds.”

All in all, it is safe to assume there is going to be a big change in trading trends now that most independent investors and traders have seen what algorithm trading can do for them. And the sole reason for its increase in popularity is its potential for making huge profits while minimizing risk.

- Advertisement -

Top 5 Trading Rules For 2014

By
Market Place
-
0

Thanks to social media platforms and trading technologies, more people are now interested in becoming avid traders. However, most of them find the information provided online pertaining to how to become a good trader and how to cut your losses too confusing. New traders look for ways they can learn trading quickly, set up their charts and start bringing in the money.

However, you just can’t become a millionaire overnight and to even begin making a bit of money trading, it is crucial that you understand some really important rules which have been a source of guidance for many new and professional traders alike. Thus, it is important to understand each rule and to adhere to it and remember trading is a passion. It is not simply a day job. If you want to become a successful trader, you need to start taking things seriously.

Mentioned below are some of the top five rules for traders this year. Take a look at them and try to understand them and incorporate them in your trading style and attitude:

Rule # 1

Always Have a Trading Strategy Read & Tested

A trading plan or strategy is basically a set of rules traders abide by when they enter or exit a market. It is a time-consuming task but because of the technology available today you can easily form an idea and test it right then and there before risking any of your real money. There are trading simulation programs which are designed to help traders decide which trading strategies to use and which not to use. Once your idea is tested and proves useable, you can implement it in a real market and if you see it is successful, stick to it.

Rule # 2

Use the Trading Technology to Your Benefit

If you are stepping into the world of finance and trading, it is important to know it is indeed a dog eat dog world. This also means that when it comes to making money while trading, everybody is going to be using everything they have available in their trading arsenal, which mainly includes trading software. For example, you can use a number of different historical charting applications prior to risking any money. Plus, traders these days use smartphones and tablets to conduct their trade which means they use an array of applications which provide them worldwide financial news, different tickers and trade notifications, anywhere and at anytime. So, start using financial technology and applications.

Rule # 3

Learn About the Markets

It is important to stay up to date with the financial market. As a trader you must learn everything there is about the financial markets. Even professional traders keep learning from daily experiences. Think of it as a never-ending quest for knowledge which can make you more money than before. Nothing is truer than the fact that all successful traders engage in back to back research, for example, they read economic reports, observe different trends and seek reasons for their movements, etc. Understanding the markets is the key here.

Rule # 4

Use a Stop Loss

A stop loss is basically a forecasted estimation of the risk trader can handle with every trade he makes. A stop loss amount can be identified by either a number or a percentage and can limit a trader’s ability to trade more than he can risk. Stop loss usage eliminates emotional trading and lets you make calculated decisions.

Rule # 5

Keep All Your Trades in Perspective

At the end of the day, it is important to understand that trading is a game where the person with the best information wins and sometimes loses. Losing a trade should never be taken as something personal. Similarly winning a trade should always be considered as a stepping stone towards greater success because the difference is always made by the cumulative profits you earn. Always be realistic with your trades and never even think about revenge trading if you lose a trade.

Final Thoughts

All in all, these are some of the best rules you can abide by regardless of whether you are a new trader or a veteran. Follow these rules religiously and you will attain success.

- Advertisement -

Explaining Volatility

By
Market Place
-
0
What Makes an Elite Trader

Volatility is the statistical calculation of the spreading of returns based on a specific market index or a particular security. You can measure volatility using two methods.

  • (1) You can either calculate it through the standard deviation methods or
  • (2) you can measure the differing factors between returns that are coming back from that specific security or a market index. So, the thing you have to look for is how low or high the volatility is. Higher market volatility adds considerable risk to a security.

Another definition of volatility can be that it is a factor in the formula for calculating option pricing which shows the limit to which the return of a primary asset will vary between the present and when that option is going to expire. Volatility in trading is always indicated as a percentage that coefficient within the various formulas for options pricing which depend on daily trading and the outcome of trading on a daily basis.

In Simpler Words

A simpler explanation of volatility can be that it is basically the amount of doubt or risk associated with how certain factors might influence a security’s price. If this risk or ‘volatility’ is high, then the chances that the security will effectively disperse towards the larger range of prices in the market. This increases the risk that the prices of that security will be subject to considerable and consistent fluctuation over a short-term in the market, irrespective of the direction.

Reduced volatility, on the other hand, signifies that the value of the security will not fluctuate considerable and will remain steady spread on a longer period of time. Another way traders measure the propensity of trade volatility is that they look at its ‘beta’. A ‘beta’ estimates the total volatility of a security’s return as opposed to the returns of an appropriate standard or level, for example most traders normally use the S&P 500.

Types of Volatility

There are numerous types of market volatilities and the first one that is considered is the real volatility of the stock itself. This can be identified through the use of historical charts and can be calculated over a given period of time but is usually evaluated in 10-day, 20-day and or 30-day stock evaluations. This data can include intraday readings as well, but normally is measured form a single day’s closing price to the next day’s closing price. You can also view this data in several indicators, for example the Average True Range Bollinger Bands.

There is another type of volatility known as implied volatility. You can think of this volatility as an ‘expected’ volatility which is spread across singular trading options.  Implied volatility of a trading option is kept out of the price of that option. That is basically because of the fact all the factors are known beforehand, factors like strike, the price of the option, expiration of the option, interest rates, etc. All these are known except the volatility factor for that specific option when it is priced. This is done so that the value can be shunned out, allowing the trader to judge the option’s relative prices. Is a $5 call cost-effective or pricey? You can only tell if you look at the implied volatility of the options.

Consider this example: let’s assume a trader is trading his stock at $100 with the implied volatility of let’s suppose, 25%. Now, the options are suggesting the stock price could increase or decrease by 25% with a single standard deviation. So, one standard deviation could equal 68% if we talk about a nominal distribution. All in all, what this suggests is the fact there could be a chance the stock might likely be somewhere around $75 and $125.

Source: Option Monsters

The Right Plan of Action

A majority of options traders emphasize solely on market volatility. And there has been a considerable amount of research that has been conducted under the practical notion that alterations in volatility can be predicted much more conveniently when you talk about essential asset values. When the implied volatility decreases, this is the time when traders come into action and attempt to buy an option(s). However, when the implied volatility increases, traders usually try to sell their options quickly or try and implement their trading strategies for long-term gains.

Traders who prefer directional trades normally use call or place spreads when the implied volatility of an option increases.

- Advertisement -

Bitcoin Glossary

By
Market Place
-
0
Bitcoin and criptocurrency
Bitcoin Glossary

If you’re a first time Bitcoin trader or a professional, it is important to know the meaning behind each term you must have seen on different trading platforms. Mentioned below are some important and commonly used Bitcoin terms and their meanings:

51% Attack

This is a situation where a majority of the computing power needed for a functioning cryptocurrency network is handled by either one mine or a bunch of miners. Controlling that much network power basically means they own the network, which also means each and every single client on that cryptocurrency network acknowledges the miner’s hashed transaction Bitcoin block.

This allows the attacker to:

  • •Authorize a transaction which conflicts with another client’s transaction
  • •Issue the cancellation of a transaction
  • •Stopping other miners from harvesting new Bitcoin blocks
  • •Stop someone else’s transaction from being confirmed

Altcoin

This is a secondary name given to all other digital currencies which can be substituted for Bitcoin.

AML

AML stands for Anti-Money Laundering strategies that are implemented to put a stop to illegal converting actions to obtain funds. Some people illegally obtain funds by making it look like everything is legitimate.

ASIC

This stands for Application Specific Integrated Circuit and is a tiny silicon chip manufactured solely for accomplishing one objective. And in this case, they are used to process SHA-256 hashing complications.

This is a Bitcoin trust which owned privately and is used for investing only in Bitcoins. It uses high tech protocol for the storage of the Bitcoins invested in on behalf of all the shareholders. This is a good way of investing in Bitcoins without having to worry about storing your cryptocurrency.

Bitcoin Price Index (BPI)

The Bitcoin Price Index indicates the average price of a Bitcoin spread across all the top exchanges in the world that is in par with the criteria mentioned by the BPI.

Bitcoin Whitepaper

The Bitcoin Whitepaper was written and founded by the inventor of the Bitcoin himself or rather themselves, ‘Satoshi Nakamoto’ whose identity is perhaps the biggest mystery in the world. The Bitcoin Whitepaper was a post made by this person to a Cryptograph Mailing list 6 years ago when the Bitcoin was launched. The paper contains all Bitcoin protocol in explicit detail.

BitPay

BitPay is a payment gateway for Bitcoin which functions to enable merchants to use Bitcoins as a form of payment.

BitStamp

BitStamp is another trading exchange for Bitcoins and is the trending platforms these days.

Block Chain

The Block Chain contains an entire list of Bitcoins which have been mined since the launch of the digital currency. The Block Chain was made in order to ensure every block has its own hash drawing so the block mined after it cannot be tampered with.

Block Reward

The Block Rewards is awarded to a successful Bitcoin miner who has managed to hash a transaction block. The rewards can be in the form of Bitcoins or other fees, but it really depends on the policies governed by the digital currency in question.

BTC

It is a short form of Bitcoins.

Buttonwood

Buttonwood is a project that was developed by Bitcoin specialist and trader John Rossi. The project was made as a protest in favour of Bitcoin in New York’s Union Square.

Client

Client is the software which runs on your PC, smartphone, tablet or laptop. The ‘Client’ links up with the Bitcoin network in order to clear Bitcoin transactions and forward them.

Coloured Coins

You can think of Coloured Coins an extra aspect for trading Bitcoin. This allows Bitcoin traders to gain access to the networks add-on features. These features can then be used to determine how you want to mark your Bitcoin. For example, a Bitcoin trader can mark his Bitcoin as a stock share or a tangible asset. This also allows Bitcoin traders to use their Bitcoins to trade for other tangible assets.

CPU

Known as the brains of the computer, the CPU stands for ‘Central Processing Unit’, CPUs were used to hash and mine the entire Bitcoin process, but are no longer used because they are not powerful enough. But you can still use them if you trade with Altcoins.

So, these are some of the most important Bitcoin terms you should know and understand.

- Advertisement -

Choosing a Trading Strategy that Fits You

By
Market Place
-
0
Forex Traders Chart

Strategy is definitely one of the key to succeed in the trading business…..

It doesn’t matter if you use fundamental analysis or technical analysis. Every active investor needs a strategy….

Regardless of the fact that you can make correct stock predictions, catch the right momentum trading moves and use all the stock market indicators correctly… you will end up giving back your profits without an effective strategy.

There is no strong and quick rule of what technique you ought to utilize.  It’s really an individual decision relying upon your trading strategy, objectives and abilities.

Remember… you need to have a technique and your technique must fit you. The first and most critical step in constructing a stock trading strategy is to know yourself.

Some questions that will help you get on track in understanding your trading personality are.

Do you like the action of trading?

Are you a risk taker or do you like to stay away from risks?

Can you tolerate large drawdowns?

Are you analytical?

Do you make fast decisions?

Are you really serious about using the Stock Trading Business to create a Living?

If you want to delve deeper into your trading personality, I strongly suggest two excellent books.

Brett Steenbarger “The Psychology of Trading” and “Trade Your Way to Financial Freedom” by Van Tharps. These will reach deeper into the mind of traders and they’ll help create the best system for you.

Some of the newbie traders thought that there is a unique strategy or technique that holds the key to success. They think that Wall Street experts hold some sort of special tactic that will never be imparted to them.
As far as every successful trader is concern this is not basically true. The key to successful trading lies within you! Indeed whatever profitable trading tactic that you use without the best possible outlook you will still lose in the stock market game

That’s right! It is a game. It needs incredible mind control to be an effective technical trader similar with chess or considerably poker.

The primary key for overall success in stock market game is to learn how to properly handle the two mind-boggling strengths of fear and greed.

Let’s begin with greed

According to Personality & Spirituality, greed is the tendency to selfish craving, grasping and hoarding. We all have the potential for greedy tendencies, but in people with a strong fear of lack or deprivation, Greed can become a dominant pattern. One good example that relates to technical trading is the point at which you are in a winning position and want to keep it for extra benefits.

Needing simply somewhat more even after your target price is hit still a certain way to inevitable loss of trades. Also, eagerness becomes an integral factor when you break your eagerness becomes an integral factor when you break by trading excessively extensive size. Generally, what brings about losing trades is due to trading excessively large size basically wanting the enormous score.

In some case, to be an effective trader you also need to have the desire fuelled by greed in order to succeed however this greed should be controlled.

And that brings us to fear

The fear of losing trades is a strong motivator. This is something that keeps you from taking a trade. The fear of losing trades is a strong motivator. To be successful in trading business, one must understand that misfortunes are merely piece of the diversion. You can never win in the event that you don’t play.

Also, you as a trader must learn to be neutral at all time. Try not to get upset when you have a loss, try not to get too happy when you win on a trade. Just remain neutral. It is extremely easy for fear to kick in, this happens to all us, this is why it is crucial that you stick to your plan.

Furthermore, I have listed 3 guidelines below on how to handle fear and greed to be a successful trader.

• Markets are never wrong, opinions are

Listen to the opinions of brokers, if you wish, but don’t ignore what the market’s price is telling you! says Jesse Livermore, aka the Great Bear of Wall Street. This is the thing that keeps you in the game even when it goes against you. Understanding this helps control carelessness which can be a result of greed. Conceding that the market is constantly right and you truly don’t comprehend what will happen next is troublesome. If you believe that you are right with the trade so just hold on even if the price is going against you.

• Don’t rush into trading immediately

This helps control eagerness and fear by constraining you to see there is no hurry. On the off chance that you miss a trade or even a few consecutively, there will be extra open doors. There is no compelling reason to get stressed or feel rush about any trade. Also, trading is a procedure where multiple trades produce results. There is no reason to bet in everything by letting voracity take control.

• Stop second-guessing yourself

Remind yourself that you thoroughly thought things through and have made the best decision. Technical traders are well known for second guessing in every trade. The nature of price charts makes this flaw very easy to fall into. So better accept what the market provides for you on an everyday premise. Don’t attempt to constrain more out of the market than what it gives you.

Many strategies can make money, BUT, because of your own psychology, beliefs and preferences many of these may not work for you. Whether you are interested in forex trading, stock trading or options trading, you must have a valid trading strategy that suits your personality to help guide your decisions.

- Advertisement -

Top 10 Best Bitcoin Sites

By
Market Place
-
0
Bitcoin and criptocurrency
Top 10 Best Bitcoin Sites

Digital currencies like Bitcoin have been gaining considerable recognition and popularity across the globe. Many people now trade and invest in crypto-currencies and actually use it to it buy goods and services which they otherwise buy with actual money, which is amazing. Bitcoins has been stirring up the world of digital currency exchange, making transactions cost-effective and faster. Bitcoin transactions are processed securely over the internet through various Bitcoin platforms and trade centres.

All Bitcoin transactions conducted over various cryptocurrency exchanges are secured with cryptography. Every single Bitcoin trade has its own digital signature and key which can be identified. Bitcoin’s popularity and largely fluctuating prices has led many people to join in on the fun and action. There are two methods through which you can engage in making money using Bitcoin exchanges. The first method is common and involves a trader buying a certain number Bitcoins in the hopes it would rise in value and make him a profit.

The second method involves the processing of those Bitcoins which is known as ‘Bitcoin mining’. Once this type of transaction has been processed, the transaction is authorized by ‘miners’ on the network which employ complex and sophisticated algorithms.  And once they verify a transaction successfully, the get rewarded in terms of commissions and transactions fees for harvesting new Bitcoins.

Whether you are a first-timer looking to get lucky through investing in Bitcoin or a professional Bitcoiner who has traded and made a lot of money, it is imperative you understand there are a lot of pretty cool Bitcoin websites where you can trade all sorts of crypto-currencies. Usually, traders stick to just one or two, but why limit yourself when you can conduct your transactions over some of the best websites there are.

Ten Best Bitcoin Website You Will Fall in Love with

1.Bitcoi.org

Now, this here is a genuine Bitcoin client which has everything. The website will teach you to work and trade with Bitcoins. You’ll get to learn a ton of Bitcoin vocabulary (which is critical). You’ll have access to various Bitcoin charts and data on businesses and developers.

2. Coinbase.com

Through just a single Bitcoin account in Coinbase.com, you will have the power to trade Bitcoins efficiently and effectively. The website has a quick verification process in correspondence with Chase Bank. It is strongly recommended you create an account with Coinbase.com, if you use multiple bank accounts. Furthermore, if you can’t afford the initial ($1,000) investment to begin the game, you can choose to buy certain parts of a Bitcoin. For example, Coinbase.com will allow you to buy about a .01 of the $1,000 Bitcoin, which is $10.

3. Bitcoin Forum

The Bitcoin Forum is an awesome website where you can actually talk about your investment plans and ideas, the forum features general information for first-time traders and also focuses on providing users all the latest Bitcoin news pertaining to the Bitcoin economy and also designed areas where users can come for technical support and learn how to develop their projects more efficiently.

4. Mt.Gox

Mt.Gox is perhaps one of the earliest Bitcoin platforms made for trading. And you’d be surprised to know Mt.Gox still owns and controls a massive share of Bitcoin trades. It allows Bitcoin traders from all over the world to buy, exchange and sell their Bitcoins in a variety of currencies. Plus, Mt.Gox also provides users various trading tools which help users and merchants to get their Bitcoin payments via their sites.

5. Bitcoin Wiki

The Bitcoin Wiki website gives out valuable information pertaining to the Bitcoin to every user in a format which closely resembles Wikipedia. Bitcoin Wiki offers traders all sorts of content on Bitcoins in various languages. The site also directs you to various Bitcoin meeting places and communities as well as offers a really cool forum.

6. Howtobitcoin.info

Howtobitcoin.info is a pretty useful platform which provides users essential Bitcoin software, charts, stores, social media option, resources and digital wallets.

7. Blockchain.info

Developed by Qkos Services, based in UK, Blockchain.info provides Bitcoin traders information on Bitcoins which have been mined or if they are being mined. It is indeed a site you should consider checking out.

8. Bitcoinx

Bitcoinx.com is another excellent website which provides a certain mining tool to Bitcoin miners along with a profitability calculation tool that makes it easy for miners to realize the complexity of the mining process, how many Bitcoins there are per block, and the costs of mining along with several other factors. The website also provides miners various Bitcoin market charts, blogs and accurate, real-time information on the price and performance of Bitcoin mining.

9. WeUseCoins.com

Another brilliant website which is designed to make Bitcoin trading simple and easy for beginners, the website provides basic information on how to begin things for both individual traders and merchants interested in tapping the Bitcoin market. WeUseCoins.com is an excellent guide to Bitcoin trading.

10. Start Bit Coin

This is another platform which caters its services to amateur Bitcoin traders who are baby-stepping their way into the Bitcoin economy.

All in all, these are some of the best Bitcoin website you should consider using.

- Advertisement -

The History of the Bloomberg Terminal and Its Impact on Trading

By
Market Place
-
0
What Makes an Elite Trader

The Bloomberg Terminal is considered to be one of the most powerful machines on the globe. This is proved through the buzz which surrounds the use of the Bloomberg Terminal by various Bloomberg reporters to gain access to an insurmountable amount of data regarding government officials, bankers, etc.

What is the Bloomberg Terminal?

The Bloomberg Terminal is an advanced machine with central processing unit that was manufactured by the Bloomberg L.P, which allows professionals in different financial settings and different industries to receive Bloomberg Professional services which they can use to track and evaluate real-time financial data and trading trends moving on various trading platforms.

Bloomberg Terminals are leased and contracted based on a 2-year span. The lease is initially based on the number of display connections the terminals have. A majority of Bloomberg Terminals have two to six connection displays. The terminal provides a client server layout the server operating on a Unix platform which is a multiprocessor platform. The ‘client’ is a Windows application that normally links up with the servers of the users through a router. This router is given by Bloomberg and is installed right then and there.

Many traders and investors use Bloomberg Terminal to gain access to information they can use to predict accurate trading trends and prices. Mentioned below are some reasons why you should consider using a Bloomberg Terminal to enhance your trading experience:

Benefits of Bloomberg Terminals

Access to News from Around the World

Although most traders think about the data these terminals provide them pertaining to the financial markets, for example options values, and securities, the Bloomberg terminals also provide investors real-time market news and notifications from around the world mainly through a number of websites, wires and tickers. By simply accessing the ‘News’ option in the search bar, you will be able to gain access to the latest financial and non-financial news as well as important headlines worldwide. Alternatively, traders can also use different media platforms to gain information, for example the New York Times, through the terminal.

Access to Equities

Traders can also enhance their search for publicly traded equities and shares through Bloomberg terminals, as it allows users to categorize their search by name, country, exchange, etc. Moreover, other options in this menu also allow users to review and analyze historical pricing on each of the equity stocks in question. You can choose to view an entire description of a business, look at the outstanding corporate debt the business may have, and also evaluate different reports and estimations for its stocks and options along with several other factors, which is truly amazing.

Using the Bloomberg terminal, you can also compare different equities which might give you an edge of having an analysis report of two different equities. The comparison options consist of overall analysis, historical ratios and technical charts.

Investing in Fixed Income Securities

Similar to equities, the Bloomberg terminals also allow clients to look for real-time information pertaining to fixed income securities. This search can include a multitude of options, including corporate debt, municipal bonds and government bonds. With a matching and comparison system quite similar to that of the equities’ options, you can easily search for appropriate fixed income securities on a day to day basis, analyzing any changes in the security value or any yield-to-maturities.

Derivatives

Perhaps the best feature of the Bloomberg Terminal is its derivatives’ ability. And with this facility, traders can now look for real-time information and values on securities, namely exchange trade options, and future contracts (contract for WTI). However, Bloomberg also provides traders put price on hard derivatives. For example, when you talk about OTC options, Bloomberg will allow you to alter their options valuations strategies so the traders can come up with a said value.  So, using this option, traders can now think place values on an OTC option on let’s say the S&P 500.

All in all, this goes to show the power of Bloomberg terminals, and it is easy to say why they are the most widely used for trading and other purposes. So, if you want to avail all the aforementioned benefits of the Bloomberg terminal, it is time you consider using one yourself right away.

- Advertisement -

The 17 Best Apps for Finance

By
Market Place
-
0
Trading and exchange analysis

It is true that many investors try not to think about the everyday proceedings and news about what is going on in the markets. However, there are still some who cannot resist the temptation of being in the loop about just about everything and because of these types of efficient traders, there are loads of great financial applications which can help make information simpler and concise. Mentioned below are seventeen of the top applications designed for investors:

1. ChartIQ Practice Trading Simulator

At the price of just $2, you can choose to replicate a trading environment or simulate a market crash to check and see whether your trading strategies work or not. The application also provides users historical data and charts to further enhance your practice. It is simply a must-have application.

2. FRED Economic Data

FRED stand for Federal Reserve Economic Data and contains a repository of over 10,000 time series for a plethora of economic data, allowing investors to begin charting over 34,000 data series from anywhere in the world.

3. CNBC Real time

This application is perfect for acquiring real-time data about the financial markets. Plus, you can always catch a missed interview on CNBC. The application also features 24-hour live streaming, pre-market, and futures quotations and a lot more.

4. uValue

uValue is the brilliant work of Aswath Damodaran, a valuation genius at NYU Stern. The application significantly aids in all your valuations processes on your iPad. uValue provides users six models they can use for valuations.

5. NetDania Forex

This app has everything, from live updating quotes, important commodities updates and global stock exchange reports. NetDania is the perfect application for Forex traders. The best feature of the app is you can set NetDania to send you push notifications regarding any important economic news or information released in the market.

6. Daily Stocks

Although Daily Stock is an expensive application ($69.99), it does pack some really mean tools for you to play with. The app is full of volume indicators and also features a stock scan which is based on the pattern of the charts. Using Daily Stocks, you can look for bullish and bearish stock charts.

7. Options Wizard

The Options Wizard is a perceptive application which helps you simplify your potential profits calculations based on your investment or trading strategies.

8. Heat Map

A majority of heat maps you probably see on your TV screen are based on the trading session at that moment. With the Heat Map application, you will be able to view maps created using various metrics. For example, it will help you view which stocks are far from reaching their price average.

9. StockTwits

Another great application which allows you to know what other traders are talking about in the market, you can use the app to determine possible trends and network with other traders.

10. Stock Chart Patterns

If you want to determine stock patterns using unfolding chart patterns, this app is perfect for you as you can use it to look for bullish and or bearish market patterns over the last 10, 5 or 3 days.

11. StockSpy

StockSpy has a really cool charting interface, but it’s also great for market research about individual stocks as it considers all new sources along with investor relation pages and other highly regarded financial websites.

12. Wikinvest Portfolio HD

The Wikinvest Portfolio is a cool application which is designed to directly connect to your brokerage account(s) online. Its features include fly portfolio analytics, valuation metrics and portfolio beta.

13. Kcast Gold Live

The Kcast Gold Live application allows you to view live quotes for precious metals and other valuable commodities. It also gives quotes for major currencies and quotes for mining stocks.

14. Bloomberg

Bloomberg is a pretty interesting application which allows you to read important articles about trading. It also lets you look at the prices and also allows you to manage your portfolios.

15. iTrade – Stock Market Simulator

This is a really nice application for rookie investors who want to practice and implement their strategies in real-time. And because of the fact iTrade is a social application, you can compete with other virtual portfolios in real-time.

16. Thomson Reuters Marketboard

The Thomas Reuters Marketboard shows users the performance of stocks worldwide, including all the stock indexes. Plus, the application has a snazzy interface and includes a top stores features called Street Events you can use to read and know about industry conferences and earnings releases. All in all, it is a professional application for professional investors.

17. ChartIQ Pro – Stock Charts and Technical Analysis

This is a great application for making charts on your iPad. You can easily draw charts, like overlay charts, Fibonacci retracements and trend lines.

So, these are some of the top trending applications you can use to enhance your trading and investing.

- Advertisement -

What Makes an Elite Trader

By
Market Place
-
0
What Makes an Elite Trader

Being a trader you might know the fact that there are many traders in the market and all have different trading styles, attitudes, strategies, so on and so forth. However, the most important thing you have to think about is there are only a small number of elite traders present in the market today. Now, you might be thinking what an elite trader is and what are their characteristics? What do all elite traders share in common? Who among the traders end up having it all?

Are they the ones who are aggressive or the ones who like do things in a manner which can be described as calm, collected and above all, calculated? Are all top traders Harvard or Wharton Business School graduates or are they dropouts that went from rags to riches? Mentioned below is the answer to all your questions, and when it comes down to it, everything really is about your tenacity and your attitude and your ideology.

Characteristics of Awesome Traders

Elite Traders Are Always Calm and Collected

Trading is emotional. You have to admit that. As much as it is all about calculations, analysis and evaluations, it is also about losing yourself in the moment. That moment can be good or bad. It is the bad moments that tend to get to traders and plunge them towards the deeper end of regret and loss. And this is where elite traders prevail and become successful. Even in the most impulsive of situations, a good trader will never succumb to anger or any other emotional factor that might sway his judgment and or opinion on anything.

Look, they might sometimes say something which might not suit their personalities, (they are human after all) but the fact that they never let emotions rule them is incredible, awe-inspiring and something amateur investors should learn. So, emotional investing is a big no-no if you want to become the best of the best in trading.

Flexible & Modest

The road to becoming an elite trader begins with the understanding of when to call it quits and when to press on with the trades. Arrogant investors and traders always stake a claim in the market, indulge in revenge trading and never seem to be satisfied with any trade. They waste hours, weeks and months on ridiculous trades, hoping they might someday make it big. This is exactly the sort of style which leads to bankruptcy and humiliation. Brilliant traders will never claim the market for themselves. They know when to leave the market when things get thick and when they know they can’t handle it. Unless if you’re given advises from a bankruptcy attorney san diego!

Above all, they accept their losses because everyone suffers losses when it comes to trading. After all, profit and loss is the name of the game. It is imperative you understand that accepting rather than fighting the market is the right way to establish yourself as a trader.

Education & Knowledge

While it is true that most elite traders are formally educated and have degrees from top educational institutes, this is not the case with every elite trader. And when you talk about trading the real education, the knowledge that will help you is the information you have about the market and that is the only reality.

Formal education or not, elite traders make it a mission to learn each and every aspect of the game, of the markets, of different situations, circumstances, long-term and short-term trends. Anything and everything they know about the market that will help them succeed and come closer to accomplishing their dreams and fulfilling their aspirations. It is all about patience, wit and knowledge when you talk about effective trading. And it is only through knowledge about the markets that you will be able to create your own strategies.

Elite Traders are Always Competitive

You cannot get to where you want to go if you are not competitive and if you don’t have that spark and eagerness to win. Exceptional traders come up with something or the other to beat their rivals in the market, but they also think of the various ways they can learn to improve where they think they are lacking. It is always about winning and moving ahead and fixing weaknesses. It is all about practice, learning lessons from losses and understanding the core mechanics of the trade.

Elite Traders Exist to Trade

If you want to be the best of the best, you have make trading a big part of your life. For most of the successful traders in the world, trading has always been a passion, not just a job, not just a source of livelihood, but a passion and an affinity. So, if you want to learn how to trade effectively, you’d have to first learn to love the game.

All in all, these are some of the simple traits elite traders have which you should seek to adapt.

- Advertisement -

Top Must-Have Apps for Traders

By
Market Place
-
0
Forex Traders Chart

 

It is no surprise we live in age of digital supremacy which has led us to manage certain aspects of our lives using a smartphone or a tablet. People are going mobile, there is no doubt about that and it is happening fast. And this technology is proving to be quite beneficial for everybody, which also includes traders and investors. A majority of investors now depend heavily on their phones to make active trades. They rely on their tablets more than they do on their laptops and computers. Why? That is because it is fast and it is frighteningly convenient.

And because of this sudden increase in demand for applications pertaining to trading and investing, developers are working day and night just to keep up with demand. A majority of brokerage companies have now completely incorporated the use of financial and trading applications for their clientele. And speaking of those applications, mentioned below are some of the best trading applications you should consider using to make your trades far more effective than before:

Top Apps to Have

StockTwits

You must have heard of Twitter. Well, StockTwits is just like Twitter for traders. This application will help you analyze and evaluate what traders are doing in the market. It will you read each move in real-time and will allow you to respond accordingly. With StockTwits, you will also be able to get to know about the rookie traders in the market as well receive information from some of the most well-known investment companies and media platforms. And the best part is the application is free.

FuturesLive

At times, some of the best applications are the easiest to use and it is in this regard you must consider using FuturesLive. Commodities’ traders continuously search for future quotes and there is no application better made for this function than FuturesLive. FuturesLive give traders a quotation from a variety of futures available from all big exchanges. It helps you organize those quotes and make categories like livestock and metals, in other words easier to understand.

Stock Guru for iPad

If you’re a big fan of the iPad, Stock Guru is just the application for you. Designed to be used on iPads only, it allows real-time evaluation of 7,000 stocks, which is amazing. You can evaluate the risk, financial integrity, momentum and a proprietary rating which adds everything up and presents it in the form of data files without the details (for those who don’t want to waste time understanding loads of information).

Bloomberg

You never know what’s going to happen tomorrow in the stock market. Things can get shaky in the blink of an eye and to be sure you’re not caught in a trade disaster, you’ll need an application which gives you on-time information and analysis in real-time. Bloomberg is the application of choice of many top traders in the market. The application provides up to date world financial news, graphs, stock quotes, etc. It also has a breaking news feature which allows you stay in loop.

AnalystRT

Look, either you would hate analysts from Wall Street or you would love them. But the fact is you need financial analyses if you wish to succeed. Some may rely on their analysis but others choose to ignore it. If you can’t imagine a life without an analyst, consider using AnalystRT as the application contains perfect rating for over 1000 stocks and enables you to make a keep checking your favourite stocks you are considering to buy.

Trade Interceptor

If you’re a Forex trader, this app is a must-have for you. Trade Interceptor comes with a cool charting feature which allows you analyze and use all your indicators. You can use the app to keep an eye on the moving averages, ATRs, Bollinger Bands, etc. The app also provides traders RSS feeds and real-time Forex updates and news. And because it is a third-party application, you can use it to trade with other brokers as well and supervise multiple trading accounts.

NetDania

Another really helpful application designed for traders is NetDania and it can pair up to 160 currencies worldwide to different stock indices, for example Dow Jones, FTSE 100, DAX and Nikkei. Plus, the app has a ton of cool trading tools you can work with to improve your strategies and implement them quickly and effectively. NetDania also gives you complete access to trading news of all sorts in real-time and you can enable the option of getting notified whenever a report you’re interested in surfaces which is really useful for busy traders.

These are some of the best trading applications you should consider using.

- Advertisement -

Controversial Investing Theories

By
Market Place
-
0

When you talk about investment strategies and the theories on which those strategies are based, then you will run of breath but won’t run out of the sheer number of investing theories there are. There is a plethora of investing theories traders use in order to find what makes the market go and what each move made in the market signifies. Take Wall Street for example, there are investors in Wall Street who think they can use varying theoretical lines to combat and win against the market and there are those who favour efficient theories and do not believe the market can never be defeated. This divide is something real and it is staggering. There are so many theories that can be used to understand the factors which influence these markets and how an investor behaves in this market. Mentioned below are some conventional and unconventional investing theories you should at least know about or understand:

50% Principle

According to the 50% theory, a trend which is being observed by traders will experience a price correction before ending. This correction can range from one-half to two-thirds of the alteration in price. What this means is if a stock is increasing and has gained around 20%, before it can continue rising, it will fall by 10%. This example can be considered a bit over the top because usually this theory is applied on trends which are short-term and followed by traders with extreme technical analysis of the situation. This correction is looked upon by traders as occurring naturally and is sometimes caused by traders and investors who are in the habit of cashing out their profits before being sucked into the trend’s reversal after the trade. If the correction increases by 50% of the alteration in stock price, the trend itself is identified as a failure and that the reversal was caused by impulsive factors.

Efficient Market Hypothesis

There are a handful of investors who are likeminded or neutral at best when you talk about the efficient market hypothesis or (EMH). There is no grey area in between. Investors either shun the theory completely or oppose it. Investors who believe in the EMH use more broader and reflexive strategies for investing as opposed to those who emphasize on making investments using old school techniques, namely potential and growth, an analysis on undervalued assets, so on and so forth. According to the EMH, the price of shares in the market embodies all the available information about that particular stock. So, this means the stock is valued accordingly unless there is a change in the stock due to any other reason. And because of the fact that an investor cannot predict the future, he would proceed to buy a large number of stocks so that he can make a hefty profit from the rise in its price at the moment. This is what investors using EMH theory do. Others point to using more aggressive strategies to beat the market like Warren Buffet does.

Greater Fool Theory

The greater fool theory emphasizes you can make money from investing as long as there is an idiot in the market willing to purchase the stock at a higher price. What this really means is you can continue to make money from stock which a ‘greater fool’ is willing to buy off your hands. However, what happens is these ‘market fools’ begin to deplete as the market overheats. Traders adhering to this theory ignore all other factors and valuations involved in an investment, which is a huge risk.

Rational Expectations Theory

The rational expectations theory explains that the investors in an economy will use their strategies and tactics in a way which corresponds and matches with what can be rationally explained in the coming days. To put it in simpler terms, these investors like to invest and spend according to what they logically believe will affect them in the future. This helps investors to conform to a more self-fulfilling prophecy that determines how their actions will affect them in the future. It is imperative to understand that the rational expectations theory is considered an important economic factor. However, the utility of the theory, in the eyes of most investors, is still somewhat doubtful. For instance, a particular investor may think the price of a specific stock is increasing. He buys it, which allows the stocks to grow. Now look at it this way, this same transaction can be used in another example, an investor decides to buy undervalued stock, he keeps on buying it until other traders take notice of the stock and this ends up increasing the value of the stock. This helps identify one major flaw in the RET and that is you can use it to change the way you invest but it will never help you identify anything.

All in all, although it is important that you try and understand these theories, it is also important to know there isn’t any ‘one’ financial theory that can help you understand the world of finance.

- Advertisement -

#TradingDebates – Trading Volatility and Performance

By
Market Place
-
0
Forex Traders Chart

Trading Volatility and Performance and the Opportunities and threats for the Financial Industry!

  • What does the future hold for trading volumes and market structure?
  • Fintech boom – an opportunity or a threat for financial services?
  • Is the global economy out of the woods?
  • Will “rate rage” save the euro or sound its death knell?

These are some powerful questions to put in the context of the global trading and investment industry. These questions are the main driver of the edition of event #TradingDebates.

After ten years of low market volatility and low interest rates, it is only now that the global markets are beginning to feel the repercussions and the question marks are still out there.

Analysts from top trading and investment banking industries all around the world are seeing a staggering plunge in transactional volumes along with deal flows. And the questions are still more than the answers. Whether you are bull or bear the markets are far from peaceful days and traders and investors see shifts continuously happening. As the notion of forthcoming rate spikes in developed nations draws near every moment, it is still uncertain whether or not the investor will be ready for what everybody is calling a ‘new normal’ in the financial industry.

Nevertheless, a midst the dark or grey (whatever you prefer) clouds of uncertainty and doubt there is a light shining in the form a new more interesting positive renaissance in financial technology and all the new innovation coming from new Fintech proposals. And it seems like it has captured the interest of a several new players in the market.

#TradingDebates

Following a successful series of debates Saxo Capital Markets is proposing a new event that with a powerful display of some of the most influential personalities of the industry proposes a reflection about the present of the trading industry for traders and analysts alike.

#TradingDebates the outsanding event organised by Saxo Capital Markets and its flagship TradingFloor.com returns with a new key series of discussions and analysis on a range of issues relating to trading volatility and performance and at the same time reflecting on the new advent of innovation and technology in Finance – The Fintech new wave that London leads worldwide.

The event has been a successful one, both on the location and also on the digital arena where #TradingDebates, has been leading a fantastic social media engagement that recently was nominated by the Social Buzz Awards for the best Social Media Campaign of 2014.

Event Details

October 22 the fourth instalment of #TradingDebates at the British Museum brings an event with various financial experts, analysts and gurus that will come together to debate the future of the financial markets in light of the volatility that surrounds it. But also among the threats it aims to reflect the more positive emergence of Fintech and the opportunities this innovative variant brings to the financial and trading industry as a whole.

This year’s #TradingDebates will emphasise mostly on the consequences of low volatility that has been around for more than ten years causing interest rates to plummet in various financial markets across the globe. And if this volatility increases and if an interest rate hike occurs, it will mark a new phase of market volatility.

The debates will open with an insightful speech from Matteo Cassina, who is the Head of Saxo Bank’s Business Lines. He will be talking about “The Evolution of the Markets and Innovation”. After the speech, Cassina will sit with a panel to discuss the considerable transition of the financial markets in ‘What Does the Future Hold for Trading Volumes and Market Structure?’

Editor for the Financial Times UK, Phillip Stafford will be arbitrating the panel, a panel of experts that will seek to explore an alteration in trading activity which has now been significantly fashioned by a plethora of technological innovations, regulatory intrusions and structural moves. There will be valuable insight provided on the subject by the CEO of Turquoise, Dr. Robert Barnes, Andrew Bowley (Nomura), Sarah Hay (UBS) and James Davis, who is a partner at Oliver Wyman. All would be discussing the various ways market participants can successfully stay on top of the game.

A sheer drop in transactional volumes and deal flows has leveraged the rise of various prospects in the industry of financial technology. Anna Irrera, a reporter at Trading & Technology, will be overlooking a panel of brilliant financial minds, namely Julian Skan (Accenture), Javier Tordable (Eurexhange), Gerald Brady (Silicon Valley Bank) and finally, Ian Morgan, the Director of financial services at Google UK.

The panel will be discussing how the Fintech ‘boom’ has provided a new, more opportunistic door into the financial industry, creating waves in the market structure. The debate on ‘Opportunity or a Threat for Financial Service’ will measure and question how efficiently the traditional world of trading cross paths with the new investment.

The Financial Time’s own chief commentator, Martin Wolf, will discuss the ‘Shifts and the Shocks: What We’ve Learned and Have Still to Learn from the Financial Crisis’. Wolf will then discuss the probability of ‘weak’ monetary policies and programs which have done nothing but add fuel to the interest rates hikes in ‘Is the Global Economy Out of the Woods?’

Then, a panel including Danny Gabay (Director at Fathom Consulting) and Steen Jakobsen (Chief Economist at Saxo Bank) will delve in a discussion regarding should the central banks start to overturn QE and regularize policy. The respected speakers will talk about whether or not investors are ready for what could be a massive asset price correction.

The event’s last panel will discuss ‘Will ‘Rate Rage’ Save the Euro or Sound its Death Knell?’. Despite the fact that you can see a potential increase in the growth rate of both the US and UK economies, it is also true that analysts predict an era of weakness for the Euro. But, is the fall in Euro a possible answer for, or a particular symptom of the Eurozone economic depression and deflation?

The evening’s final panel will be overlooked by Jonathan Ferro (Bloomberg) and the panel will feature Kit Juckes (Societe Generale), Erik Britton (Fathom Consulting), Geoffrey Yu (UBS) and John Hardy (Head of Saxo’s FX strategy).

More on: https://www.tradingfloor.com/topics/trading-debates

- Advertisement -
1...24252627Page 25 of 27
- Advertisement -

APPLICATIONS

HOT NEWS

Revolutionizing Real Estate: The Impact of Virtual Reality on the Market

Market Place - 0
The Impact of Virtual Reality on the Market
Real State
In the ever-evolving landscape of real estate, the integration of technology has become a game-changer. One such technological marvel that has significantly transformed the...
Market Place News
leading digital platform for traders, forex news, the latest trading updates, currencies, resources for trading and personal finance and market analysis.
Contact us: info@mktplace.org
Facebook Twitter

EVEN MORE NEWS

POPULAR CATEGORY