Thinking of downloading a MetaTrader 4 platform? Here's the first step: look for a broker online. What has a brokerage firm to do with the platform, which basically is a software you can download elsewhere? Read on and you'll discover the link between the program and the broker, as well as the many advantages of getting it from the latter.
A forex trading platform is merely an avenue for you to be able to participate in this financial market. And a brokerage firm's main function is to provide this avenue to traders. That is the link between the two. Now you ask, "Why do I need to get it from them?" "Can't I just download it from anywhere online?"
Preferably, you should get MetaTrader 4 from a brokerage firm. That's because if you do, you'll lessen your chances of downloading a copy that's infected with viruses. Remember that in some websites, especially those that provide free software, the downloadable materials are often user-generated. This means, they are submitted by users. Whether they intend it or not, these users may lead a virus into your computer; the possibility of the file having a malware is always there. Get it from an established firm though and you can be sure the file is clean.
Security issues aside, there's another reason why you should find brokers online first and then get the platform from them. It's the customer support. These firms are known to have a team of experts on stand-by to take calls and address inquiries from people who downloaded the forex trading platform from their site. And when you're just beginning in this trade, you will appreciate having someone to talk to when you encounter problems. Whether technical or related to trading, it's easier to get answers when you have reliable people you can call or email.
Here's another good thing about downloading MetaTrader 4 from a brokerage company. That company is likely to offer you a free demo trading account. With this demo account, you'll be able to get a feel of what it's like to trade in the financial market. And fret not if you have yet to make your first trade. Worry not too if you fear you'll lose money fast. That's because you are only using a demo trading account. You are not yet connected to the actual financial market.
Introduction to Using a Spread Betting Demo Account
Financial spread betting involves speculating on the financial markets and indices such as the FTSE 100, German DAX, or other markets such as commodities, securities, interest rates and government bonds.
In order to begin trading you'll need to open an account with a financial spread betting broker (https://www.independentinvestor.com/spread-betting/brokers/) and make a deposit. After this, you need to check the latest markets and prices, analyse which markets you think are going to move and then open a trade at the "Bid" price on offer.
Nowadays however, most online trading brokers will allow new customers to open a free Demo account instead. A Spread betting demo account simulated the online trading platform and gives you free virtual cash to trade with.
For example, you might be given ÂŁ10,000 in virtual cash and this allows you to open/close trades, implement stop-losses and learn how financial trading works in general. You can also open a dual CFDs and FX demo account to go alongside this.
There are massive advantages when it comes to opening a demo spread betting account over a live account.
To begin with, a Demo account can be opened within minutes and is completely free. Unlike regular financial spread betting, you are trading on a simulated platform that mirrors the live trading platform. This means that you don't have to fund your account or deal with the risks of trading for your first few weeks of trading.
Online Trading account customers can find demo accounts useful for getting comfortable with the spread betting platform and features. Most companies run their own software and independent platforms which means every company will be different. The ability to be acquainted with the software and learn how to use all the technical tools etc is a really helpful experience.
Finally, one of the most important tools to any customer is the technical analysis and trading tools available on the platform. Technical charts such as candle stick data allow you to check things such as MACDs, Bollinger Bands and TSIs. These are all essential formulas and indicators for helping you to analyse the historical and predict future movements of financial markets.
So you've done your research, and found a company that you want to place a financial spread bet on. But one of the problems with any form of equity investment, be it through share ownership or via financial spread betting FTSE stocks, is the risk that the market as a whole, or the sector in which your chosen company operates in, goes down. Is there any way around this, and can we look at a 'market neutral strategy' for trading?
Happily, the answer is yes, if you use spread betting. There is a way to remove or at least minimise that kind of risk, and it's called 'Pairs Trading'. This takes advantage of one spread bettingâs general advantages, being that you can bet on things going down as easily as you can bet on things going up. This luxury isn't available to most traders of equities. Of course, there is a bit more work than simply picking a winner here because - as the name implies - you pick a pair of trades to construct your position. Here's how it works.
The theory is blindingly simple. If you believe that 'similar' financial instruments are impacted the same way by general market movements, two banks in the financial sector for example, then you might 'buy' one and 'sell' the other. If the financial sector in general goes up, you will gain on the stock you 'buy', but lose an equal amount on the stock you 'sell'. What you have just done, in a rough and ready way, is give yourself some insulation from general movements in that sector. Big deal, you might say, but how do we use this to actually make money? So far all we have proved is that each time we bet, we can lose the same amount we make?
The answer lies in your choice of pair. What you are looking to do is take the company you originally identified as your chosen investment - we will call this your 'A choice' - and find another company in the same sector that you think has the least underlying chance of it's share price going up. Let's call this your 'B choice'. The trick now is to 'buy' your A choice and sell your B choice. Make sure the underlying value of each bet is the same size. What you are effectively doing now is mitigating the impact of market movements (on the assumption that general market/sector movements will affect both equally) and set the two stocks in a fair race against each other. You are no longer betting on one stock against the price you purchased at, you are now effectively betting that the underlying performance of your A choice share will beat the underlying performance of your B choice share.
Of course the key to executing this spread betting strategy successfully is to find highly correlated stocks and then to pick the better performer as your 'A choice'. Good luck!
Binary options have become very popular in recent years. Binary options brokers did really good job at advertising and marketing their products, creating false belief that this could be great financial instrument to trade in order to make lots of money very quickly.
Binary betting (options) have become very popular in recent years. Binary options brokers did really good job at advertising and marketing their products, creating false belief that this could be great financial instrument to trade in order to make lots of money very quickly.
In my humble opinion, forget about binary options, because it is a big trap for your money. There is not much of a difference between trading binary options and playing for example in a game of roulette.
Why Binary Options is big trap for your money?
Well, let´s elaborate little bit on that.
First of all, binary option operators have very similar business model to casino operators, both make their profits from the loses of their customers. They assume that statistically majority of their customers would loose all the money sooner or later.
In case of binary option platforms it is contrary to what they market and advertise to general public. This is something which irritates me the most, namely: Binary option operators, present their product as a great trading or investment opportunity, where the biggest attraction of their marketing hype is that they emphasize that clients can get 75% or even 80% ROI (return on investment) in one trade.
It sounds so easy and effortless to make money with binary options. Operators often preach something like that: âAll you need to do is to decide whether the price of commodity or currency pair would go up or down in predefined period of time, like minutes or hours, and you get 80% profit on your initial investmentâ It sounds easy, right? Well, I wouldnât say so!
In fact trading binary options is a form of gambling like casino! Sadly, plenty of wanna be investors lured to binary option platform by their deceiving marketing tactics, believe that they found holly grail of financial markets trading. Eventually, almost all loose lots of money.
Additionally, in casino it is commonly expected to loose money over time, so majority of people in general are prepared for this eventuality, therefore usually playing with relatively small amount of money for a bit of fun and entertainment or some kind of adrenaline rush and excitement, rarely with the intention to make money on regular basis. Unfortunately, in case of binary options people enter this field with intention to make money, after being exposed to misleading advertisements. That false believe that they found money making machine, results in much larger sums of money deposited to binary option platforms, than it would have been otherwise, should they knew before that they just entered an equivalent of gambling platform!
Why trading binary options is similar or even worse than playing roulette in a casino?
Imagine going to casino in order to play game of roulette, where you place two bets one on RED and one on BLACK. The chances of winning are exactly the same as tossing a coin, namely 50/50. If placing two bets on two different colours in a long run you would not make any money as well as you would not lose any. However in roulette there is a number ZERO (single zero in European version, and double zero in American version of the roulette). If ZERO comes out you would lose your bet. This is called house advantage. The house advantage in single zero roulette is 2.7% and for the double zero game it is 5.26%. Statistically in long run you would keep loosing either 2.7% or 5.26% of your betting capital every time when you place two bets on two different colours at the same time, consequently it would be pointless to do so with the intention to make money.
Binary option trading is similar or even worse. If you bet on both (price going up and down) at the same time, you would always have less money after such a trade, because your winning bet earns you 80% but the losing bet lose all 100% . Letâs assume betting $100 on each outcome, then total bet amount = $200, balance after bets completed = $180, total amount lost = -$20, in percentages terms it is -10% .
That is much worse that playing roulette in the long run!!!
If you try to predict price movements you might get lucky couple of times in a row, but that is also a case for roulette players in casino. They might hit lucky winning streaks from time to time but in long term casino always wins. You should expect the same with binary options.
That 10% lose on binary option trading described above is like an equivalent of having enormously huge spread. Usual spreads with most trading instruments are much less typically well below 0.5%
You can check what are typical spreads for other type of markets on social investing platform eToro, where you can trade not only forex, commodities, shares, indices, but also crypto currencies (BTW: eToro allows you to copy other successful traders)
Why is it so difficult to make money with binary options?
Did you know that in order to become a profitable binary option trader your winning ratio needs to be much more than 50% ?
Please have a look at required wining-rates to just break-even, when trading binary option for couple of commonly used payout percentages:
for 90 % payout, to break-even required wining-rate = 52.6%
for 85 % payout, to break-even required wining-rate = 54.1%
for 80 % payout, to break-even required wining-rate = 55.6%
for 75 % payout, to break-even required wining-rate = 57.1%
for 70 % payout, to break-even required wining-rate = 58.8%
You might say, no problem â that is fine, because you have certain amazing binary option strategy, where you make enough money with winning trades to cover all the loses, but give me a second⌠Would that mean that you need much more winning trades than losing ones? Yes, exactly, but believe me it is not an easy task to achieve. Even some of the well known traders rarely have winning rate over 50%.
You might ask:
How is it possible to be profitable trader with winning rate below 50%?
The secret to profitable trading is to maintain healthy Risk v.s. Reward ratio.
In case of binary options trading the Risk-Reward ratio is not very healthy for sure, because you risk 100% to earn 80% when you lose you lose all, when you win you win only small set predefined percentage of initial investment. When trading binary option it is not possible to run you wining trades and cut loses on your losing trades.
When trading other financial instruments like, currency pairs, commodities or stocks, it allows me to let my winning trades run much longer, which gives me a chance to earn even couple of hundred % profit on each trade, where limiting my loses to just couple of percentage points. In long term having healthy risk-reward ration allows me to have as little as only 30% winning trades in order to be profitable overall.
Let me show you one example:
As you can see in the table below, there were only 6 winning trades out of total of 20 trades which represent only 30% winning rate, the remaining 14 trades were losing ones. Despite such a low winning rate of only 30% I was able to be profitable at the end, and the total balance of my trading account increased by $600 from $5000 up to $5600.
win risk ratio
For each trade we took fixed amount of risk $100, but wining trades were bringing us between 2,3 and 5 times more than that risk taken amount. Our risk-reward ratio was healthy, this gave us a luxury of having as much as 70% loosing trades, while making money at the same time.
The same scenario would never ever be possible when trading binary options, because risk-reward ratio is bad, which consequently requires trader to have much more than 60% winning trades in order to be slightly profitable at the end.
That is why we believe that trading binary option is cleverly designed trap to extract money from your wallet.
We hope that above article should serve as a warning signal for all traders willing to invest their money in binary option trading. We encourage to think twice before entrusting your money to binary option trading .
I hope you realize that itâs very important to view online stock reviews and charts because it helps us to stay informed in the stock market. Of course when having already thoroughly examined all these charts you can execute your deals and if your analysis has appeared to be rather professional then most probably that youâll gain success. I should say that stock reviews are considered to be an excellent source of information giving us an excellent opportunity to compare the leading stocks traded in the market. Of course pricing is available too in these reviews. So using online stock reviews, you will be able to track all the market moves.
By the way itâs high time to get acquainted with the most competitive stock brokerages. I donât doubt that they will be helpful for your stock trading. First of all you should find out which brokerage companies are losers and which ones are winners accordingly. To do this you should study corresponding reviews available online. It goes without saying that in this reviews information is updated every minute and thatâs why you can always take advantage of it. Itâs clear that using actual stock market information youâll be able to make really profitable decisions.
Itâs an evident fact that traders are exposed to really high risks when buying and selling stock on the stock exchange. But if you stay informed all the time then youâve got quite definite chances to reduce your risks. Itâs clear that in this case your chances to gain profits will be quite real. So youâll be able to keep updated as for your future contracts and options.
It goes without saying that staying informed is an extremely worthy thing because it gives stock traders more options for buying and selling future contracts at profitable prices before the contracts expire.
By the way some online brokerages can provide you with free online trades to get started and this should encourage you to open an online account. When having opened an account, you will get the required tools, charts as well as market reviews helping you to stay informed. With the help of these reviews youâll be able to choose the right stock account suiting your needs. And in general youâll be better prepared for making big money in this case from my point of view.
Spread betting as we know today has an immense fan following of close to a million gamblers as well as financial investors. However, this was not always the case. It had a very humble beginning and a few pioneers who brought it its present state of glory.
It is said that the first foundation for spread betting was laid in England in the 1970's. Do you pay tax on spread betting? - The betting laws allowed gamblers to take home their winnings without paying any taxes. There were financial organizations as well as individual brokers who specialized in this particular trade. The organizations were the preferred choice of gamblers as they provided more options in foreign markets and offered them many more financial opportunities in which to invest. Two of the pioneers in this field were Stuart Wheeler and Joe Coral. They opened up new prospects to potential market brokers and have built their own personal empires on them.
Stuart Wheeler had founded the Investors Gold Index (IG Index) by offering a financial spread betting on the speculative prices of gold. In the later years, the firm was renamed as International Gold Index as they diversified and began to use other financial instruments as well, and are now one of the leaders in this particular derivative.
The 1980's saw the liberalization of the London Stock Market. This solved many issues and concerns of the gamblers as well as the financial institutions involved in spread betting. Then the stock prices were made available to the public. More investors began to get involved in the speculation of high equity prices and financial spread betting became the perfect instrument for it. However, it still couldn't attract faithful followers from other industries.
A decade later, this industry embarked on its most successful journey as it received the help of the medium that in was in search of- the internet. Online trading and speculative programs opened up financial spread betting to the masses. It enjoyed instant popularity. Most financial institutions began to develop their own websites and trading platforms where they catered to many clients at once.
This industry continues to grow in the 21st century. New products are being invented to accommodate users from different industries. Trading can be done now over the counter without any of the older exasperating regulations which were inevitable a couple of years back. With all these developments and the continuous innovations, the future of spread betting does look good and it seems it is here to stay at least for a while.
Financial spread betting which is based upon pure speculation involving making speculative investments, has often been compared to gambling for many years. We have often wondered if there is any truth behind this statement, we have found that there is only one major similarity.
This one similarity is a big one, and when you take gambling and financial spread betting via speculation the one main thing in common is that they both involve risk. Both have an enormous degree of risk involved, studies and statistics have shown that there are in fact more losers than winners.
In gambling, one creates a situation which may jeopardize their financial well-being, and bets on the odds of preventing it. Naturally, when they are on the winning end there is a nice reward for beating the odds of the situation. However, as one continues to gamble, over time- the odds get higher for hurting their financial well-being. The gambler does have the option to withdraw and it is quite easy, however, the prospect of to win will persuade them to continue their risk.
In speculative investments such as financial spread betting, one makes a selection based on the market and economic conditions and various historical graphs and statistics. This is quite different then that of gambling in which no real knowledge is required. The speculators need to have not only firsthand knowledge by means of data, they also need to have experience in order to be successful. The trader must constantly keep up with market research and watch trends if they want to win. It is also necessary to perform extensive studies on the company's profile, competitor behavior, current state of company performance and promising research and development.
One thing that gambling does not have in which speculative investments (such as financial spread betting) offer is that they are also capable of helping to boost a downwards economy. This happens due to supply and demand and can get the economy back on an upwards swing. With spread betting the investors can actually bet on the stock market, without actually owning the stock as an added boost. Gambling on the other hand, provides no such benefit to the economy, and only benefits the establishments.
We feel the only thing the same with financial spread betting and gambling is the risk of financial devastation, a difference is with spread betting, you can help avoid total loss by implementing a good risk management system, whereas with gambling there is no such thing except to refrain from it.
This tutorial is designed for traders who are looking to make a living out of financial spread betting, from spread bettor profile to trading strategies.
Financial Spread Betting @financialspreadbetting - Tumblr Blog | Tumgag
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