Tag Archives: currency exchange

Mutual Funds: Advantages and Disadvantages

600x4002

Like the other existing investments, mutual funds do have their advantages and disadvantages. It is important to know these before you make your final decision and invest in mutual funds. Doing your research is a vital action on your part. In this post, both the advantages and disadvantages of mutual funds will be presented to help you decide rationally and sensibly.

Definition of Mutual Funds

Mutual funds are a type of investment vehicles comprised of a pool of funds from several investors to meet the purpose of investing in a number of securities like bonds, stocks, currency exchange and other similar assets.

These are being managed by money managers (those who are in-charge of investing the fund’s capital to generate capital gains and achieve profits for the investors). The portfolio is structured and conserved in such a way that it matches the objectives of the fund as specified in its prospectus.

Advantages of Mutual Funds

  1. Instant Diversification

Mutual funds invest in a wide array of securities. If you are aiming for a diversified portfolio, then investing in mutual funds is for you. A mutual fund can offer you with a basket of stocks.

  1. Account Size Does Not Matter

It is perfectly alright if you have a small-sized investment account or if you only have limited capital to begin with, since a mutual fund offers you a wide range of exposure to several stocks, you do not need to buy such stocks yourself. Once you, chose a mutual fund, you are given access to diverse portfolios and to participate equally in the gain or loss of the fund.

  1. Specialized Money Management

 Fund managers are considered as experts in the investing field. Hence, mutual fund companies have more capability and resources than the average individual investor.

 Disadvantages of Mutual Funds

  1. Intraday Trading Not Possible

The “NAV” price is unknown, thus, you cannot really employ intraday trading strategies. It makes intraday trading impossible on sudden price movements in the market.

  1. Loss of Connection

 In mutual funds, the investment decisions are not reliant on you. Chances are your decision would not be regarded unless you will be called for some quarterly investor calls and updates. This in turn translates to a lack of interpersonal connection both to your account and to the people in charge of the fund. It can mean difficulty for you when managing your portfolio. The decision to buy or sell an asset is dependent on your manager.

  1. Costs are an Issue

 Costs are a part of a mutual fund’s reality. As a matter of fact, such costs can decrease your overall profits.

  1. Fluctuating Earnings

 The possibility that the value of a mutual fund will decline is high. Like other investments, you might end up with no return at all. This is due to the fact that mutual funds are affected by the price fluctuations of the stocks that constitute the fund. It does not mean that it is being run by a professional manager, the performance would be impressive.

  1. No Insurance

Mutual funds are not insured against losses – therefore, there is a possibility that losses can occur or even losing your entire investment.

Conclusion

Mutual funds both have the gains and downsides, and as an investor, you should be able to evaluate such carefully. The probability of success in a mutual fund tends to increase if you know what you got yourself into and if you totally understand the basics.

Alright! If you want to be updated with the latest news about the latest market news and updates, subscribe now! Trade12 is here to answer any question regarding online trading, commodities, stocks, technology, and economy. Sign up for an account at Trade12.com or you can even download the Trade12 app. Available for both iOS and Android devices.

Advertisements

Discover the Blade Runner Trading Method

600x400

The Currency Market is regarded as one of the largest financial markets due to massive trading volume per day. Such type of market is open to all types of traders all over the world since trading deals can be done through an OTC (over-the-counter) network.

In this type of market, participants are free to buy, sell, exchange and take a chance on currencies. It has unique attributes and properties wherein investors become attracted to it since it can open opportunities for optimizing profits. Yet, it takes to know and apply an effective strategy to be able to reach your financial objectives in this market. In this article you can learn one of the most advisable currency exchange trading strategies recommended by experts.

The Need for an Effective Strategy

Not all created strategies apply to all existing markets. There are particular strategies that do better than the others. An individual trader must be able to discern a strategy that suits him and help him outlive the currency market.

It is true that markets have their own characteristics. Its major characteristics are as follows – it is highly liquid, it is open 24 hours per day except during weekends, and has the highest forms of leverage that both traders and investors can utilize.

Simply maintaining discipline when doing trading is important, yet it does not guarantee success. Hence, employing an effective strategy is vital – one that is tested and you can count on while you maintain the needed discipline in the field.

Picking the Right Strategy

When talking about currency exchange strategies, deciding on a specific trading method to carry out your trading plan is a must. Trading strategies help you determine advantageous entry signals that you can make the most of.

Considering the Bladerunner Trading Method

If you are looking for a strategy that works across all time frames and currency pairs, the Bladerunner is considered to be exceptionally good. Experts say that it is by some means considered as one of the best and easiest trading strategies.

This strategy depends on pure Price Action to be able to locate entries, which means that a trader tries to identify price action patterns. When using this one, candlesticks, pivot points, round numbers, support and resistance levels are brought into play.

It uses the 20-day EMA (Exponential Moving Average; a reference point for price action). The strategy is termed as Bladerunner for the reason that the 20 EMA represents a knife dividing a price. The bladerunner trader depends on the charts and then compares the real price action to be able to adjust their trades correspondingly. It simply means that when the current price action is beyond the EMA, chances are, it will drop soon and vice versa.

The crucial entry factor for this strategy is when there has been a break out of price from the consolidation or range before making a move, which means that the price must be trending. Moreover, monitoring news and announcements is really helpful. The most important thing to consider is to always trade with the current trend’s direction. You can simply know this by identifying the current price’s EMA or polarity indicator.

Conclusion

Considering a number of factors in the currency markets, an investor must remember that market volatility is inevitable. One sure way to surpass market turbulence is to be equipped with the necessary knowledge you need when doing trading with your choice of assets or securities. Having an adequate knowledge is necessary for you to predict the succeeding price movement – and be on the advantageous side.

Alright! If you want to be updated with the latest news about the latest market news and updates, subscribe now! Trade12 is here to answer any question regarding online trading, commodities, stocks, technology, and economy. Sign up for an account at Trade12.com or you can even download the Trade12 app. Available for both iOS and Android devices.