5 FACTS YOU HAVE TO KNOW ABOUT ONLINE TRADING

Online currency trading comprises of the largest market in the world. The popularity of this market with investors and traders rose sharply since the 1970's when it became more accessible to the retail trader in the Forex market. Forex market and online trading that go hand in hand. Even though 80% of the traders fail in garnering profits this remains the largest market due to several reasons.

The 5 major factors that a trader who aspires to be a successful trader in the online trading Forex market should know are:

1.     Tracking Major Currencies

In the Forex market there are only around five to seven major currencies that a trader has to keep track of. This is entirely different to the scenario in the Stock market where there can be thousands of shares and companies that have to be tracked. Hence, the Forex market presents a much easier and simpler way to trade currencies for profit.

2.     Making Profits

In the Forex market profits are made not only when currencies are appreciating but also when they are depreciating. In addition to this traders also have the ability to trade with leverage. The leverage in the Forex market is much higher than any other market and can be as much or more than 200:1 in most cases. This allows traders with even minimal funds to make handsome profits when they are right. One drawback here is that the losses are also escalated according to leverage.

3.     Trading Hours

Ability to trade 24 hours a day from Monday morning to Saturday afternoon is certainly a boon to the trader. This is possible due to the fact that there are different time zones in the world opening and closing with overlapping time slots that allow traders to enter and exit the market at will. A trader is able to trade from anywhere in the world at the London, New York, Tokyo or Sydney sessions at any time.

4.     Filling Orders

This can be done any time when a trader enters the market due to its high liquidity. There are traders willing to do business with you regardless of the time and thus orders can be filled with relative ease and no delay. This is mainly due to the sheer size of the market and the way it operates.

5.     Help and Support

This is available to all traders in the Forex market through their Forex brokers or other online sources. Traders can use demo accounts to practice with virtual currency and there are many tutorials that can be used to educate themselves on the art of trading currency online. Expert help is also provided by many Forex brokers.

HOW TO TRADE FOREX ONLINE WITH AS LESS RISKS AS POSSIBLE

Trading in any market carries with it the inevitable fact of risk. The same is true for the Forex market. If there is no risk there will not be any volatility in currencies and thus no trading will be possible. Traders can hope to be rewarded only when there is risk present in the transaction. To be successful in currency trading in the Forex market the trader has to learn the art of minimizing risk while optimizing profits.

The Forex online trading market is highly speculative in nature and therefore there is risk always present in all transactions. The best way to deal with risk in the Forex market is to find ways and means of reducing risk as it cannot be avoided altogether. This automatically tends to maximize profits. A trader or investor should study the risks involved in each trade and determine whether it is worth taking. This is usually done by using trading tools in fundamental analysis and technical analysis. All tools are used to measure the potential risk of a trade and will show the best currencies to trade with as well as when to enter the market and exit it. Opening a position, holding it and then closing it are all done so that you encounter minimum risk in the process.

Losses are also inevitable in the Forex market as any veteran trader will tell you. However, if a trader takes ample steps to ascertain the risk involved and strategize his trading plan so that risk is cancelled to a great degree he can hope to make profits. Here, traders can utilize limit orders such as stop loss orders to achieve this.

The free Forex market is a very busy place with volatility at its highest at any given time. Traders and investors should always keep track of the events that shape the market volatility so that they can trade accordingly. Trading tools can be used to measure the risk of each trade in more than one way so that the risk that exists can be confirmed and reduced as much as possible. Changes in the risk can take place without any warning whatsoever and traders have to be ready for such unforeseen developments. Sometimes, these sudden changes can mean that the risk is greatly reduced allowing profits to be made. Being aware of the risk that is present in each trade is half the battle won towards profiting from trading currencies in the Forex market.

FOREX VERSUS FUTURES

A Forex trade is executed almost immediately and delivery of the currencies takes place in 2 business days whereas in a futures transaction the delivery of the underlying asset takes place sometime in the future.

Introduction:

The Forex market differs greatly from the Futures market in that the forex market is a currency market where currencies are traded. The Futures market is a market where underlying assets such as food, precious metals, energy, other commodities, currencies and bonds are traded. In the forex market currencies are mainly traded at spot (delivery 2 business days from the transaction date), however in the Futures market the futures contract details the price that will be paid for the product at a future date in time when the product will be delivered.

Forex versus Futures:

The forex market is the most liquid market on the planet. It is a market where currencies are bought and sold 24 hours a day, every day of the working week, which means that traders can take the opportunities to make money that present themselves at any time of the day or night. Traders can trade in the Asian time zones or the European time zones or the American time zones either one at a time or all together when they overlap. The Futures Market on the other hand is only open 7 hours a day at the most.

Forex transactions are instantly executed and traders pay a fee which is reflected in the spread of the currency rate. This spread is usually between 2 and 5 pips depending on the currency involved. There is no slippage in the forex market similar to what can happen in some other markets. 

The futures market on the other hand involves more than one asset. It includes many commodities such as food stuffs, manufactured goods, and financial instruments including treasury bonds and currencies and agricultural products. The futures contract is not executed instantly for as the name implies delivery of the assets takes place at a date in the future. The future contract itself details the underlying product, the units of the product being bought or sold, the price of the asset and the delivery date. The futures market is a regulated market which transacts standardised contracts which have standardised delivery dates.

Long term traders and even day traders’ trade futures to make a profit or to hedge a financial obligation. Also non-traders who have an interest in a commodity trade futures to hedge against commodity prices going against them. For example a farmer might sell a futures contract to guarantee a particular price for his supply of winter feed for his livestock. A farmer would be obliged to complete the contract at the maturity of the contract. Day traders and long term traders are not concerned with these obligations as they will close the futures contract before it matures.

In addition to standardized contracts there are also standardized contract sizes depending on the underlying asset. For example the EUR/USD contract size is $125,000 a contract or lot. The contract itself would state the minimum price change which is also known as a tick size by which a price can change. For example the EUR/USD is 1 pip or 0.0001 x $125,000 which equals $12.50. So each price change of 1 pip in the underlying asset will either be a profit or a loss of $12.50 to the contract holder.

FOREX VERSUS STOCKS

Forex and Stocks have similar characteristics but one big difference in that to own a stock is to own a piece of the company that issued the stock.

Introduction:

The Forex market is very different from the Stock market in that if you own a stock you also own a piece of the company whose stock it is, whereas, if you own a currency which you have purchased in the Forex market, you own the currency, but not a piece of the country of the currency. The Forex market is a currency market where currencies are traded. The Stock market is a market where stocks are traded. Both the Forex and the stock markets quote two way prices.

Forex versus Stocks:

The Forex market and the stock markets are both twenty four hour markets during the week. However, in the Forex market you can trade for example EUR/USD when the Tokyo Forex Centre is open and the European and American Forex Centres are closed. However, you can’t buy the stock of a London company that is listed on the London Stock exchange and not listed on the Tokyo stock exchange.

You may be asking yourself why a company would allow its shareholders have a share of the assets and earnings of the company. The answer is that the companies need money and there are only two ways by which they can raise the money. One is by issuing shares (Equity Financing) and the other is by borrowing money from a bank or from the money market (Debt Financing).

Currencies are bought and sold in a Forex market where there is no physical building to house the market but instead is a network of computers linked to large financial institutions, banks, retail traders and brokers. Currencies are not kept anywhere and there is no physical exchange of an asset as everything is done electronically.

Stocks however are bought and sold in a stock exchange. Each stock exchange has a range of stocks that are listed on it. A stock that is listed for example on the New York stock exchange will not be listed on the Sydney stock exchange. In effect each stock exchange is a supermarket where different types of stocks can be bought. You don’t have to go to a stock exchange to buy or sell stocks but you have to buy and sell stocks through a broker that is attached to the New York stock exchange.

Just like the Forex market where there are major centres in the major time zones of the Far East (Sydney-Tokyo-Hong Kong), Europe (London) and America (New York) there are major stock exchanges in the same centres.

Without these exchanges for stocks the only way they could be bought or sold would be through advertising and also the price would not be transparent and you would have to haggle on the price.

Because both the Forex market and the stock market are electronic markets the price changes can be tracked and immediately known. Investors can see the effect economic and political news and company news has on the price of a stock or on a currency.

ONLINE INVESTMENT OPPORTUNITIES

BENSON UNION

Benson Union is an investment company that builds its online business together with global customers, has several offices in different countries and always fulfills its obligations.

We represent a new generation of investment instruments, that`s why we enable you to become a Forex investor from the comfort of your home and multiply your funds.

By revealing the full potential of wealth management, Benson Union offers its customers several investment products, by constantly improving its service and expanding cooperation opportunities.

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INVESTMENT FUNDS

1. ONTARIO FUND ($10 - $499)

If you have decided to try investments on the Internet or have between $10 and $499, then Ontario fund is surely meant for you. The minimum deposit amount in this fund is kept fairly low at $10 to let anyone to try earning on Forex market.

In this fund participation of traders is minimized to 10%. The most operations are carried out by means of the robotic software and hardware systems.

Investment policy of Ontario fund intends the long term speculative operations with currency pairs on Forex market for the period up to 170 days.

100% assets of Ontario fund are invested in the following currencies on Forex market: AUD, NZD, EUR, GBP, CAD, USD, CHF, JPY

In Ontario Fund 90% of all trading operations are conducted by initiative and under control of the robotic software and hardware systems which operate on the basis of signals received from central asset management control system of the company

Daily interest: ................................ 1.2%
Deposit currency: ........................... USD, EUR
Amount of investment: .................... 10 – 499 (USD or EUR)
Investment period: .......................... 170 days
Interest payment schedule: .............. Monday-Friday except
US National Holidays
Additional contributions to deposit: ....... Not Allowed.
Anytime deposit cancellation: ............... Available at 25% fee
Compounding: .................................... Available

2. ERIE FUND ($500 - $4,999)

Usually Erie fund suits those users who treat investment business on the Internet very seriously. This fund allows an investor to create a tool for a stable earning online. And since the minimum investment deposit in this fund is significantly larger than in Ontario fund, the profit here is considerably higher as well.

Half of all speculative operations are conducted by company traders. The rest of the purchase and sale operations with currency pairs are carried out by means of the robotic software and hardware systems.

Management strategy of the Erie fund is based on long term speculative operations with currency pairs on Forex market up to 170 days.

100% assets of the Erie fund are invested in the following currencies on Forex market: AUD, NZD, EUR, GBP, CAD, USD, CHF, JPY

In the Erie fund 50% of currency purchase and sale operations are conducted by professional traders. The rest of the trading operations are carried out by the robotic software and hardware systems which operate on the basis of signals received from central asset management control system of the company.

CONDITIONS

Daily interest: ................................ 1.4%
Deposit currency: ........................... USD, EUR
Amount of investment: .................... 500 – 4,999 (USD or EUR)
Investment period: .......................... 170 days
Interest payment schedule: .............. Monday-Friday except
US National Holidays
Additional contributions to deposit: ....... Not Allowed.
Anytime deposit cancellation: ............... Available at 25% fee
Compounding: .................................... Available


3. HURON FUND ($5000 - $24,999)

Huron fund is intended for people who treat investment not as a profitable online game but a serious thought-out business where intelligent investments yield considerable and stable dividends daily during a period of more than half a year. The higher interest in this investment fund is explained by the larger assets of Huron fund compared to the Ontario and Erie funds.

In the Huron fund the three fourth of all speculative operations are conducted by the company traders. The rest of the trading operations are carried out by the robotic software and hardware systems.

Asset management of HURON fund is based on long-term speculative trading of currency pairs on Forex market for the period up to 170 days.

100% of the assets of the Huron fund is invested in the following currencies on Forex market: AUD, NZD, EUR, GBP, CAD, USD, CHF, JPY

In the Huron fund 75% of all currency sale and purchase operations is conducted by the professional traders who watch over the trading process in a 24\7 mode. The rest of the trading operations are carried out by the robotic software and hardware systems which operate on the basis of signals received from central asset management control system of the company.

CONDITIONS

Daily interest: ................................ 1.7%
Deposit currency: ........................... USD, EUR
Amount of investment: ................... 5000 – 24,999 (USD or EUR)
Investment period: .......................... 170 days
Interest payment schedule: .............. Monday-Friday except
US National Holidays
Additional contributions to deposit: ....... Not Allowed.
Anytime deposit cancellation: ............... Available at 25% fee
Compounding: .................................... Available

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