Thread: FXB Blog - Forex Articles

Bitcoin mania: Join the rush or beware the bubble?

When the Wall Street Journal runs a headline that reads Bitcoin: Even Grandma Wants In On The Action, you’re simply compelled to find out more about the stand-out cryptocurrency that is grabbing all the attention.


For months now, Bitcoin’s rapid price swings have been prompting volatility-starved investors to join the biggest speculative boom since the dotcom fever in the 1990s.


In the space of 24 hours this week, Bitcoin rallied to an all-time high of $11,434 before sinking as much as 21% to $9,009, having started 2017 at $968.23, according research site CoinDesk.


The temptation to join the rush is tempered by the fear that its value is being driven purely on speculation and that the bubble is about to burst. Then John McAfee – founder of the eponymously named software – doubled down on his previous prediction and claimed this week: “I’ll eat my own d**k on national TV if Bitcoin doesn’t surpass $1 million by 2020.”


More and more investors have chosen to set aside Bitcoin’s questionable past, for instance its use by criminal elements, and focused on the potential that it could replace gold as an investment to hold when faith ebbs in fiat currencies.


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Forex broker is most discussed topic in every forex forum in the online. There are many good and scam broker in forex market. Some have regulation and licensed and some don’t have. So trader should choose a broker carefully. Now I am trading with CapitalsTrade. It is a regulated broker in Vanuatu. It is providing maximum security of my fund. They also are providing me low tight spreads, high leverage and many more.

Safe as houses? Not if you live in Australia

According to Jonathan Tepper, one of the world’s experts in housing bubbles, Australia is experiencing the biggest property bubble in history. It has lasted 55 years and seen prices increase 6556% since 1961. “It is the only country we know of where middle-class houses are auctioned like paintings,” he observed recently.


When it crashes it’s likely to bring Australia’s economy crashing down with it, as it’s the only sector which has driven GDP growth of late. It’s one of those rare opportunities traders relish because the volatility in the market will be big and significantly increases the chance of being able to make a huge gain from an investment.


You can thank State and Federal governments for this opportunity. They have done everything they can to fuel the housing market in an effort to boost Australia’s economy and offset the decline in the value and volume of its chief exports iron ore and coal. The growth of the economy has provided governments with a source of tax revenue and proof to voters that their policies result in economic success.


The Australian media has also been complicit in the perpetuation of the property bubble. Objective reporting on property has disappeared because the Murdoch and Fairfax duopoly, which controls media output in the country, have been protecting their only major growth profit centres realestate.com.au and Domain the country’s two largest real estate portals.


Headlines celebrating a 26-year-old train driver who services the debt on five million dollars worth of property with his salary and rental income have become commonplace, with hordes of others being similarly celebrated for their achievements.


The formula for success which has enabled individuals on modest incomes to gain ownership of seven figure property portfolios comes through the black magic of cross-collateralised residential mortgages, where Australian banks allow the unrealised capital gain of one property to secure financing to purchase another property.


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A step-by-step guide on how to start trading

Trading can be an exciting way to earn an additional income. However, before you start trading you need to learn a few things. Knowing what to expect, what tools you need, and a few techniques will help prepare you so your entry into trading is as smooth as possible. The following things need to be considered before you start trading:


1. Getting to know the market


Traders can trade within many different markets which include the stock market, forex market, options market, and Contract for Difference (CFD) markets.


The stock market involves buying/selling shares of a company. The forex market is the largest market in the world and involves the exchange of one currency for another. The options market allows participants to undertake positions in the derivative of an asset, so the option is not ownership of an underlying asset. The contract for difference (CFD) market allows traders to speculate on the rising or falling prices of instruments such as currencies, shares, indices, and commodities.


When a market is moving downwards, it’s called a bear market. You can take advantage of this through ’short selling’ which involves selling assets or (derivative) you do not own in the hope of buying them back at a lower price in the future. The difference is your profit.


Short selling can be very risky as your losses are unlimited and you could lose more money than you actually have in your trading account. This is because the shares could rise so you would have to cover the difference. Therefore, short selling is not advisable for novice traders.


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The financial advice you wish you’d received at 18

Good financial advice is priceless, and the sooner you get it and apply it the better off in life you’ll be.


Today’s 18-year-olds who are preparing to go to university do so knowing that they are going to rack up a sizeable amount of debt by the time they graduate.


Has anyone sat down with them and fully explained the impact debt has on their life?


Advice about the benefits of getting a good education are echoed everywhere but strangely enough young people get little formal advice about financial planning through regular education channels. Aside from what they hear from their parents, who aren’t always the best at giving guidance on money management, they learn by experience.


The internet offers lots of financial advice in return for a few keystrokes and a couple of clicks but there’s so much out there and much of it is confusing and contradictory.


The financial challenges faced today make being engaged with the world of money more important than ever. Job security is something we reference in history books, banks are a very different entity to what they once were and the world is evolving at a far greater pace than it has ever done in the past and these changes are impacting more people, more quickly than ever before.


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Learn to read between the lines to make better trades


So, you’ve got the trading bug. You’ve made your first profits – albeit modest – by making safe trades.


There are riskier trading strategies that can earn bigger profits. You know about them, you’ve been warned about them, and you’re not interested because the downside is too great.


So how do top traders end up making so much more money?


It’s not by taking bigger risks.


Profitable traders earn more because they’re better at predicting and understanding how markets react to news and economic data. They read between the lines of the constant stream of information that is available on trading platforms to make more profitable judgements.


The best traders use information to make a trade before the trend becomes visible to others.


For profitable traders, breaking news stories and economic data is information to be deciphered into factors that can affect the market.


It’s not easy. If it was everyone would do it. But it’s far from impossible, and can be learned.


Understanding economic performance and what affects it is an area that profitable traders excel.


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Cryptocurrencies and gold: You need to take a position

Any trader looking to make money on the markets needs to invest time researching before taking a position.


If you do a search on cryptocurrencies it won’t be long before you’ll see an article that compares their merits against gold.


Should you invest your hard-earned money in gold or cryptocurrencies? They ask, and variations on that theme.


The number of these articles implies that they are somehow in competition with each other.


But it’s a phoney war, as they both have a different role to play in the world of finance and in your portfolio.


One of the reasons gold has stood the test of time is the stability it offers against the unpredictability of currencies and the sudden collapses that have taken place throughout history that can wipe out fortunes in an instant.


Gold is the perfect way to hedge against risk, impervious to natural, financial or political disasters.


Cryptocurrencies also offer a viable alternative to traditional currencies because they are decentralised, meaning no central authority can take it away from you.


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Wise Trading Words from Pro Traders


Ever wonder how professional traders deal with the ups and downs of forex trading? Here’s a glimpse …
The most successful traders view forex trading as a game of possibilities. Sometimes you win, sometimes you lose. In fact, there are occasions in every trader’s career when a losing streak can seem to go on forever. Losses happen, but what sets successful traders apart is the way they deal with the ups and downs of the markets!


If you are at the point in your trading career where you just feel like quitting, take heart … All successful traders went through what you are feeling, but overcame their doubts to become seasoned traders. They still lose some trades, but they understand that losses go with the territory and all that matters at the end of the day is that your profits far outweigh any losses you make.
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Strategies for Successful Trading Decisions Going Short or Long


The Forex market is quickly becoming the focus of attention for millions of new entrants as a result of its unique advantages. A large number of people have learnt how to make clever investment choices in order to take advantage of the market. Two strategies in Forex are going long and going short – once you understand these two strategies you will be able to make important decisions in order to be profitable. The two main strategies will be examined below.


Going Short


This trading strategy is when the base currency is sold in order to buy it at a later stage when the price begins to fall, resulting in a return from the transaction. For example, if the current GBP/USD is 1.5345 meaning we pay 1.5345 Dollars for one Pound Sterling, and we have $1000 dollars, we would sell the Dollars in order to purchase the Pound Sterling. This is carried out when the cost is expected to fall again in a short period of time. When the price GBP/USD falls to 1.5350, this means that more Dollars can be purchased with the same amount of Pounds that were obtained at the start. The additional dollars can be kept as profit which were earned by considering the dollar as the base currency.


Risk in Short Position


As with all financial markets, forex involves the same amount of risk. If the prices go in the exact opposite direction than originally expected, there will be a loss instead of a profit. For example, if the GBP/USD goes to 1.5340, you would not even get the same amount of Dollars that you sold initially. This strategy is only profitable if prices drop.


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Is this the best time to get into cryptocurrency?

The financial news has been filled with headlines about cryptocurrency for over a year now and this has undoubtedly played a part in the huge increase in value the likes of Bitcoin and the rest have experienced.


While plenty acted quickly and got in on cryptocurrency, many other potential investors who have been cautiously considering making a move have held back fearing that the opportunity had gone when Bitcoin reached $20,000 and others like Ethereum and Ripple started making big gains.


Warnings about bubbles, regardless of who was making them, have largely gone unheeded. New price records have been set then broken on a regular basis. However, a market correction was always going to happen.


It’s been nothing like the drastic fall some commentators have predicted (remember Bitcoin was valued at around $900 in December 2016). However, on January 17 Bitcoin has tumbled to around $10,000 after reports that a ban on trading of cryptocurrencies in South Korea was possible. The fears of a regulatory crackdown sparked a domino effect on the broader cryptocurrency market with Ethereum dropping 23 per cent and Ripple 33 per cent on the same day.


While some may view this as the beginning of the end of cryptocurrency trading, it’s more likely to be the breather this market will take while the new financial instruments that are growing up around cryptocurrencies settle in and the authorities firm up their decisions on how virtual coins will be regulated.


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