Monthly Archives: April 2016

Advantages of Expert Advisors

What are Expert Advisors?

(744).jpgThese are programs which allow automation of the analytical and trading processes in MetaTrader4 platform. These are also called “Robots.”

 

Should you consider using “Robots?”

EA basically makes things easier if you’re a busy trader who pursues personal endeavors or other main source of income. Robots also have their disadvantages, but this does not mean you shouldn’t consider it. Here are some reasons why you should actually consider using an Expert Advisor or Robot:

  • Robots can trade for you for 24 hours. Traders make time for their personal necessities, giving trading a rest so they can focus on other things. It is nearly impossible for a person to trade the entire day, bur with EAs, you can execute trades for 24 hours. This gives you the chance to not miss on any trading opportunities.
  • Expert Advisors react on opportunities faster based on coded rules and execute trades based on these rules within seconds. You no longer have to stare and keep a close eye on the chart since Robots can do the job for you.
  • They can consistently carry out the trading plan since most traders fail to stick to theirs. Robots are designed to stick to the plan without exceptions; no emotions for these programs to get carried away and it is the best way to be disciplined with your trades.

Bottom line: Robots or Expert Advisors can make your life easier. You no longer have to carry the weight of workloads and stress. These programs take over your tasks effortlessly and reliably.

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What is Bond Yields?

Bond is an “I love You” given out by an individual when it needs to borrow money.

These entities require lots of funds in order to operate so they frequently need to borrow from banks or individuals just like you. When you possess a government bond, basically, the government has loaned out money from you.

“Isn’t that the same as owning stocks?”

One main difference is that bonds usually have a distinct term to maturity, in which the proprietor gets paid back the money he lent, ( identified as the principal) at a prearranged set date. Similarly, when an investor buys a bond from a firm, he gets paid at a indicated rate of return, also branded as the bond yield, at definite time breaks. These periodical interest payments are usually known as coupon payments.

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Bond yield speaks of to the rate of return or interest paid to the bondholder although the bond price is the sum of money the bondholder pays for the bond.

Bond prices and bond yields are inversely connected. When bond prices increase, bond yields drop and vice versa.

Always remember that inter market relationships rule currency price action.

In this instance, bond yields really help as an excellent pointer of the strength of a nation’s stock market, that increases demand of the nation’s currency.

Demand for bonds frequently upsurge when investors are worried about the protection of their stock investments. This flight to safety drives bond prices up and, by virtue of their inverse relationship, drives bond yields down.

As many  investors stay away from stocks and other high risk investments, increased demand for “less-risky instruments” just like U.S. bonds and the safe-haven U.S. dollar drives their prices higher.

Another reason to keep in mind,  government bond yields is that they perform as an pointer of the overall direction of the country’s interest percentage and expectations.

Let’s say, in the U.S., you would pay attention on the 10-year Treasury note. An increasing yield is dollar bullish. A declining yield is dollar bearish.

It is necessary to be aware about the underlying dynamic on why a bond’s yield is increasing or declining. It can be based on interest rate anticipations or it can be established on market indecision and a “flight to safety” to less risky bonds.

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After knowing how rising bond yields generally cause a country’s currency to increase in value, you probably want to know how this can be useful to forex trading.

Remember that one of our objective in currency trading,  apart from gathering plenty of pips, is to put together a strong currency with a weak one by first linking their respective markets.

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How To Choose the Best Stock to Trade?

Of all the stocks available in the market how do you choose the one you trade? Here are the simple tips which you can consider in determining the right stock to trade. Probably, you usually look for expensive and well known stocks or you want those which fit to your financial state. But above all these, you have to understand how to evaluate the value of the securities, thus, a careful research and a bit of effort to learn is highly needed.

Company Profile

The first thing to know is the profile of the company. You have to check if is it is profitable and make a research regarding its earnings. In general, these individual stocks release their quarterly earnings report, so from there you can have an idea which one earns and which one does not. You may take note its net income, per-share earnings and its outlook. If you don’t understand anything about the company or the stock, don’t buy it.

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Pre-market Movers

Pre-market period occurs from 8:00 to 9:00 am on a daily basis. During these hours, there is limited volume and liquidity that’s why traders are usually watchful of how the market turns out to be. The movement of a stock during this period says a lot about its performance at the regular hours.

Apple, Google and Intel are some of the pre-market most active stocks. If you want to trade at this time of the day, you must look for stocks with heavy volumes and trades higher than $5 dollars. When it comes to the major indices, it is advisable to assure the broader value of their futures. In addition to this, you may just follow the trend of the broad market.

Trade History

If you trade for the longest time already, you may just refer to your own experience. Your experience is still one of your best teachers which you can rely upon. If you are already comfortable with the stock you trade and you get the return of investment just the way you expect it, then you might as well stick with it. You can easily predict the movement of the stock you are familiar with.

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Choose and Focus

You have all the freedom to choose the stock that you want to trade. After you have chosen carefully, focus on it or them. Basically, you can have at least one or two stocks to focus which could be your favorite or just the famous ones.

Roger’s Communications, First Merit Corporation, Kellogg, Spartan Nash, Merge Healthcare, American Vanguard, Blackstone/GSO Senior Floating Rate Term Fund, Yamana Gold and Coach are just some of the great stocks for 2015 according to Forbes.

However, don’t be blinded by the fact that if the stock is prominent in the market, there is a possibility that demand left a big impact on the stock, thus, it will result in a higher price. You can also consider the predictions of the market analysts regarding the stock you want to trade.

Make a List

After you have considered all the things mentioned above, make a list of the possible stocks that you might trade. Then you can start watching the movement of the stocks in the market and see which one is the best one or which one has the potential to bring profit to you. You track the record of the stocks on your list and avoid the ones which would likely perform the worst.

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It wouldn’t be easy to choose the best stocks to trade if you don’t have the willingness to learn. Everything takes practice and you should be keen in every market changes. As you open an account with your broker, subscribe to their education, market analysis and webinars. These will help you gain the necessary knowledge when it comes to trading in general. But, your own effort to familiarize yourself with these stocks is a good start.

Good Luck Trader!