What is a Lot in Forex? - Securities.io
What is a Lot in Forex? - Securities.io |
- What is a Lot in Forex? - Securities.io
- False Breakouts Are Key Trading Opportunities - TheStreet
- Capitaria Review 2020 – Is It a Scam? - ChainBits
| What is a Lot in Forex? - Securities.io Posted: 28 Jan 2020 03:27 PM PST Dipping your toe in the water of forex trading has never been easier. Now there are more and more top forex brokers offering great deals, powerful educational infrastructures, and more to attract your business. This is great for you as a potential forex trader, so long as you know some key points about trading forex. One of these key points that you will encounter right away and that can be the cause of confusion for many, is the spread in forex. In the simplest of terms, this is the difference between the price at which you can buy a currency, and the price at which you can sell it. This price difference allows your broker or other market maker to make a marginal profit on your trading. Do Forex Brokers Profit from the Spread?The simple answer here is yes. To understand how this is the case, we have to analyze the forex trading market a little more in-depth: When placing a trade on any currency you will notice the presence of two prices. These are the bid price and the ask price, or in simple terms, the price you must pay to buy a currency, and the amount you will get for selling that currency. You will notice a slight difference in these prices. This price difference does in many cases indicate a profit for your broker if they are the market maker, although this may not always be the case when you consider the following.
Common Spread Types You May See When TradingWhen you are trading forex with any of the top brokers, you are likely to come across two particular types of spread most frequently. These are the fixed spread, and the variable spread. Here is a quick rundown of both, along with a few pros and cons that some traders feel about each. Fixed SpreadAs suggested by the name, this type of spread is offered by the broker and remains constant for a particular period, usually in the long-term. It certainly will not change during the course of your trading day. Fixed spreads are typically offered on the most popular, major currency markets such as EUR/USD, USD/JPY, and more that are viewed as very stable markets with only minor fluctuations and a steady, consistent trading volume. Fixed Spread Pros
Fixed Spread Cons
Variable SpreadA variable spread again as the name suggests, is the opposite of a fixed spread in the sense that it is changeable and can move fluidly throughout the trading session depending on the volume and volatility of the market. The majority of top forex brokers will offer variable spreads particularly on riskier or less popular markets that can see a lot of changes in price. This includes minor forex currency pairs, forex trading, and some commodities. Variable Spread Pros
Variable Spread Cons
Knowing and Understanding How to Manage the SpreadThis advice particularly applies if you are utilizing a variable spread from your broker. There are a few ways in which you can try to minimize your own spread during forex trading. The very first of these is to try and choose a broker who offers you the best value in spreads based on what you know to be your own trading style and needs. If you are not sure about this then a great place to start is a forex demo account. These are offered by the majority of brokers and are fully equipped at simulating a realistic trading environment without the risk. Since the market, and therefore the spread, can change a lot based on the news, it is a very good idea to have a look at the economic calendar provided by your broker. This will let you know which major economic events are coming up. From there, you can work to decide how you think the spread may be impacted. Finally, one of the biggest keys when it comes to the spread, is volume. With that in mind then, it is likely you will encounter a lower spread during the major trading session hours around the world. This means New York, London, Sydney, Tokyo. Outside of these times, you may notice an increase in your spread. Which Type of Forex Spread Should You Choose?This really depends on your trading style, though typically, if you are new to trading, fixed spreads are recommended since these can give you a close to an accurate cost of trading, and capital requirements are usually lower. For an experienced trader, or certainly, if you are trading on margin, you may want to consider variable spreads for their better value for money especially on higher volumes.
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| False Breakouts Are Key Trading Opportunities - TheStreet Posted: 30 Jan 2020 10:10 AM PST You come up with a trade idea based on an important technical level. It might sound something like this: "If the CAD/JPY can break above the daily chart resistance level of this big triangle pattern, it will likely advance 300 pips or more over the next one to three months." [The timeframe or size of the pattern doesn't really matter, the concept works the same on all timeframes.] It's a big pattern, so lots of people are watching it. The price breaks above the pattern and starts to fly higher. It moves 50 pips above the pattern but then starts to tank. It moves back into the pattern, dropping below recent swing lows. New traders are frustrated by this, blaming manipulation, algorithms, or stop hunters. They are angry or sad they lost (or didn't make a big profit like they expected), and don't realize a real opportunity to make their money back is staring them right in the face. False Breakouts are Often TradableFalse breakouts are a gift! Yes, there is often a losing trade associated with a false breakout, but there are losing trades for lots of people! That's the false breakout's power. When a false breakout occurs, a portion of traders are trapped in losing positions. They need to exit, helping to fuel the price in the opposite direction. Couple this with the fact that those without positions (or longer-term positions) just saw the price try to move one direction and fail. Their conviction and position size is likely to increase in the opposite direction. So a failed rally results in hard selling, for example. Many traders are so focused on one trade, and trying to make money on that one idea, that they miss the power of getting into a trade in the opposite direction when an idea doesn't work out. I don't reverse my position every time there is a false breakout, but when conditions are right it can work out well. I used the CAD/JPY example above because recently the CAD/JPY had a beautiful and profitable false breakout to the upside. In CAD/JPY Near Breakout I discussed the pair moving above what I thought was a key level. The price ended up consolidating around that key level for some time (red box on the chart below). The price then broke to the upside. This made everything look really good for a further upside move. On a good breakout, the price should have run aggressively higher, and any pullback should have stalled near 83.70 or above. Instead of making a strong advance, the price stalled quite quickly and reversed lower. It moved back into the consolidation, without slowing down. It then dropped below the consolidation. With stop losses placed in this location, most who went long would have already gotten out with a small profit or loss, or have their stop loss triggered below the consolidation. The price then continued to decline. By the time the price reached 83, or even 83.60, a trader could be thinking "The upside breakout failed and there is potential for the price to continue lower. Is there a valid trade to the downside?" The trader would then assess their outlook, consider the reward:risk of the trade, and determine if switching to a short position makes sense. It may, or it may not. Another Way to Use False BreakoutsAnother option is to always to wait for a false breakout in the opposite direction of the direction you want to go. There is a trade-off here. Since you wait for the false breakout, you are unlikely to take a loss making a trade ahead of a false breakout. And false breakouts occur quite frequently. The flip-side is that you may miss out on strong moves that breakout and just keep going (no false breakout in the opposite direction beforehand). In BoE Rate Decision Thursday I indicated that if the Bank of England held interest rates steady, the EURGBP would likely decline. I also know that most traders are backing away ahead of the interest rate announcement instead of taking aggressive positions. So it seemed odd when the price of the EURGBP broke above a 2-day swing high on a sharp rally, only to halt and then drop back below the high. That was a shorting opportunity for a day trader, especially considering that the BoE announcement was still a few hours away. If you were looking for an opportunity to get short, a false breakout to the upside was an ideal time to do it.  The false breakout to the upside resulted in a hard selloff back into the middle of range, providing a favorable reward:risk trading opportunity. While the price continued to sell-off following the announcement, holding through it is a gamble, so the trader could have taken their profit prior to the big news-related selloff. Working False Breakouts Into Your Trading PlanEvery trade taken should be a part of your trading plan. This article is meant to simply spark the idea that false breakouts can be tradable. The next step is to start looking at when you will trade false breakouts, and under what conditions. Where will you enter, take profit, and place stop losses. Once you establish these things, include them in your trading plan so you can start practicing these trades—potentially in a demo account with a very tiny position size to start, until your strategy is profitable. Typically, the more convinced I have a trade will work out—because everything looks so good—those are often the trades that have the biggest false breakouts and moves in the opposite direction (IF a false breakout occurs). If you are convinced a trade looks awesome, probably lots of other people are thinking the same thing. In trading, if the stars align but the price doesn't do what you expect it to, get the hell out. The price is probably going to move hard the other way. This isn't a rule, but a pretty good guideline. I will trade false breakouts against my original opinion, but only if there is lots of room for the price to move. For example, if the price is moving in a big channel, and I expect an upside breakout, I will take a short if the price has a false breakout to the upside..like the CADJPY and EURGBP examples above. My favorite trades are when there is a really small false breakout in the opposite direction I want to go. For example, I want to go long on a consolidation breakout. The price drops below the consolidation (I am not in this trade because I am waiting to go long) and then rallies above the top of the consolidation. These trades have a slightly better chance of working out because the price already tried to go lower and couldn't. I have more conviction that the price will rise as expected (relative to if there was no false downside breakout). Also read, Quickly See Which Currencies are Performing Best and Worst. By Cory Mitchell, CMT. Join me on Twitter @corymitc. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.  | ||||||
| Capitaria Review 2020 – Is It a Scam? - ChainBits Posted: 31 Jan 2020 12:08 AM PST Website URL: https://www.capitaria.com Founded:N/A Regulations:Unregulated Languages:Spanish (Chile) Deposit Methods:Unknown Minimum Deposit:$400 Free Demo Account:Available Number of Assets:Unknown Types of Assets: Currency Pairs, CFDs on Cryptos, Precious Metals, Commodities, Indices, Shares. Trading Accounts and ConditionsCapitaria, a Forex broker based in South America, offers its clients two types of trading accounts:
Capitaria – AdvantagesHere are the few advantages we could find while investigating Capitaria:
The MetaTrader 4 (or, MT4) trading platform is the world's most popular trading interface, and for good reason. It is very user-friendly, and offers traders added features to make trading even easier. With the MT4 platform, users get to choose from numerous customizable charting tools, trading bots so that you can execute automated trading, nearly 100 market indicators, and more. The fact that Capitaria offers its customers this platform on which to trade is a huge plus for us.
Capitaria offers its clients a leverage of 1:200, which is quite substantial. With this kind of a leverage, even those traders that prefer higher risk investments will be attracted to this broker. However, the downside of having a high leverage is that the risk factor is higher too, which means that traders stand to lose a lot more of their money. It is due to this reason that many regulators across the industry have put a limit on the amount of leverage that a broker may offer its customers.
Capitaria offers its clients the use of a demo account so that they can test their trading platform and also understand how the trading conditions work. This is another point in this broker's favor.
The third advantage of trading with Capitaria is that users get to execute trades in a wide variety of assets, which range from Forex pairs to CFDs in cryptocurrencies, commodities, stocks, indices, precious metals and so on. Capitaria – DisadvantagesSadly, after we assessed Capitaria, we found that the disadvantages of trading with this broker were greater than the advantages. Here is the list of serious issues we found with Capitaria:
On Capitaria's website, it is stated that this broker has offices in 3 countries in South America – Chile, Uruguay and Peru. The broker claims to be owned and operated by a company called Capitaria SA, which in turn is owned by KT Financial Group (KTFG). Upon investigating, we found out that KTFG is actually registered offshore in the British Virgin Islands. In this territory, financial services providers such as Forex brokers are not bound by regulatory oversight. What this means is that KTFG, and therefore Capitaria is not regulated by any financial authority. Added to that, all 3 South American countries in which this broker operates do not have regulatory oversight for Forex and CFD brokers. Despite that, there are many brokers in that region that have ensured that they are legitimate and regulated. The fact that Capitaria has made no such effort to get a trading license raises a huge red flag about its legitimacy. 
$100Minimum DepositThe company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders. 
$100Minimum Deposit76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
On its website, Capitaria not given any information about the spreads it offers. And the spreads that we were able to see when trying out Capitaria's demo account were unreasonably high. When we logged into the demo account, we saw that the spread for the benchmark currency pair, the EURUSD, was at 3 pips. This is about twice as much as what the industry average is. Most brokers offer their customers a spread of 1.0 to 1.5 pips. A high spread is not favorable for the trader because the broker makes most of the money from such spreads. Therefore, Capitaria having a high spread is not a good sign.
Capitaria's Start account requires you to deposit a minimum of $400 before you are able to start trading. This requirement is much higher than the industry average, where most brokers require traders to deposit between $100 and $250 to open an account with them. This high initial deposit requirement is another red flag, especially when it is seen in conjunction with the lack of information on spreads, a lack of a trading license and the fact that Capitaria is an offshore broker.
Another point of concern that we have with this broker is that Capitaria has not provided any information about its payment methods. Even the basic debit/credit card and bank wire options are not mentioned on this broker's website.
Another cause for concern is the fact that there is no information with regard to the various transaction fees. For example, we do not know what the fees for withdrawing funds are. The problem is that this doesn't mean that the broker has not imposed a charge. It simply means that we do know how muchthat fee is. What this also means is that you may be surprised by the charges that are made to you when you try and withdraw your funds. Conclusion Despite the fact that Capitaria has not been blacklisted by any financial regulator, and that the broker is not anonymous, there are too many gaps that lead us to advise you to stay away. We can safely conclude that this broker is not safe and you would be better off investing your money elsewhere.
Capitaria Pros
Cons
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