NFT - what is it, how to use it, where to store it and how long will they stay with us?

Ethereum/USD, cryptocurrency, NFT - what is it, how to use it, where to store it and how long will they stay with us?

The NFT trend began back in 2017 with the famous blockchain game CryptoKitties. Then the hype for Crypto Cats spread so much in the community that, in addition to selling pictures for 600 ETH, it practically blocked the operation of the Ethereum network itself for several days. With the crypto winter in 2018-19, the excitement for ”cats" subsided, but the tokens of the ERC-721 standard remained and in 2021 created a new NFT-HYIP.

According to DeFi trackers, the total sales of NFT at the end of 2021 exceeded $ 13 billion, although at the beginning of the year it was only about 2.5 billion, and in 2020 even less - 14 million.

What caused the wave of general interest in NFT? As an ordinary teenager collecting pixel images with whales earns an income of 400 thousand dollars, and at first glance, nondescript pictures are sold for millions of dollars and how long will it last?

What is NFT?

NFT - a non-fungible token is a token with which a digital impression is created for a unique object. For example, a song, a painting, a football card or another piece of art. The NFT is a digital certificate of this unique item.

As the industry developed and interest in tokens grew, NFT began to be used to digitalize unique virtual creations. Thus, the NFT was given the opportunity to fix the unique right to own a digital art object, just as in real life we protect our ownership of tangible property by making an entry in state registers.

The manifestation of interest in non-fungible tokens is fueled by outstanding personalities - world stars, politicians, entrepreneurs, bloggers. They consider it a wonderful way to support truly talented craftsmen. In addition, NFT is an alternative for investing in the future, because everyone has not forgotten about the bright breakthrough of cryptocurrencies.

Read more: NFT in simple words: what is it and how to make money on it

Where can NFT be applied?

Despite the fact that now the main scope of NFT is cute "animals" in crypto games, in fact, this is not the only place where they can be appropriate. Thanks to its properties, NFTs can be used in services that need to be 100% sure that the user is real. At the same time, such a user does not have to be identified, he can remain anonymous, and the mere presence of NFT will give him access to the service or products.

For example, on September 25, 2021, the international conference “Money of the Future” was held in Vinnytsia (Ukraine). A special feature of the event were tickets in the form of non-fungible tokens issued on the Polygon blockchain. Participants received their NFTS according to the purchased ticket - Standard, VIP, Afterparty and could remain anonymous if desired. The presence of such a ticket confirms the right to attend the event, while it is impossible to forge it.

To buy an NFT ticket, it is enough to connect the Trustee Wallet crypto wallet to the event website and make a payment, the ticket itself will immediately be displayed in the application.

What is NFT?

The decentralized exchange ExonSwap offers its users to create an NFT on the Tron blockchain, such an NFT serves as a kind of "login” on the site, allows you to provide liquidity to trading pairs and participate in the affiliate program. It is worth noting that this is a unique practice that has not been used anywhere before, more details about this can be found on their ExonCenter website.

Another option for using NFT may be the right to photograph models or interview bloggers. For example, the photo models of ValentiVitell and AngelSetFree, selling their NFTs on the Opensea marketplace, provide customers with additional bonuses, you can read in detail in the description of the NFT itself.

NFTs have become very common in online games, as they can represent a gaming staff - unique clothes, weapons, etc.

Read more: Crypto wallet: the most important & practical tips

There have also been cases of the use of NFT in the real estate sector - in the summer of 2021, an apartment was sold in the capital of Ukraine using non-fungible tokens.

The very idea of owning real objects via NFT is not expected to be ignored. It is much faster to obtain ownership of a tangible object than to formalize this right in real life. For example, the ownership of an apartment is carried out by collecting a package of documents, contacting a notary, drawing up a purchase and sale agreement, obtaining an extract from the state register, and to purchase an NFT, you only need to perform a cryptocurrency transaction in the blockchain.

Where and how to store NFT correctly?

If initially NFTs existed only on the Ethereum blockchain, today they are implemented in almost all popular networks. You can find NFT on the blockchains Ethereum, Harmony ONE, Polygon, Solana, BNB Smart Chain, Near, Tron, Cardano, PolkaDot and many others. Such an assortment poses a number of problems for users:

  • Firstly, it is difficult to decide on the choice of a network and, accordingly, a marketplace for creating an NFT;
  • Secondly, there is no single application that supports all networks at the same time, and storing NFT on a centralized resource like an exchange is somehow obscene.

Therefore, the right solution for storing NFT is to choose a non-custodial crypto wallet (where private keys are only in the user's possession) with maximum network support. For example, Trustee Wallet supports NFT on Ethereum, Polygon, BNB Smart Chain, Harmony ONE and even Ropsten, Rinkeby test networks. Today it is the only crypto wallet with such functionality.

Read more: Blockchain technology: how it works and where it is used

Legal regulation of NFT

We live in a world where each state has its own legal system and clear procedures for fixing property rights that have been formed for centuries. How is the issue of ownership of NFT settled from a legal point of view?

The answer is simple: nothing. Today, neither the process of creating nor buying/selling tokens is legally regulated.

On the one hand, based on the essence and purpose of tokens, NFT can be conditionally considered as a "title document” for a particular object. The right of ownership includes the right of the owner/owner to own, use and dispose of material objects and excludes the possibility of exercising rights to this object by other persons. Roughly speaking, the right of ownership is a monopoly on a thing.

On the other hand, intellectual property rights apply to a real object, the author can sell it and dispose of his work as he wants. However, he cannot interfere with the creation and sale of the NFT “attached” to his work. Also, anyone can download or distribute copies of the object, even if you have fixed the ownership of it. The address in the blockchain will be different, but the work becomes publicly available and it is impossible to establish control over the replication of copies.

Despite the fact that such tokens are unique, non-fungible and exist in a single copy, and information about each of them is publicly available, stored in the blockchain and cannot be forged, it remains unclear which court will consider controversial issues in transactions with them.

Considering all these aspects, the legal regulation in the field of NFT is still waiting for a lot of changes. It should take place in a comprehensive manner, satisfying all parties so that the development process does not stop, and the rights of each person are protected.

Read more: New risks of NFT investors

Why do people buy expensive NFTs and what are the prospects?

Despite the ambiguity of the legal status for NFT, people still buy them. At the same time, the prices of some non-fungible tokens sometimes exceed hundreds of thousands of dollars. Why do they buy them?

According to my observations, there are several reasons for this: some are subject to trends and are willing to spend money to be on the "wave”, others pour funds thereby supporting the industry and "HYPE”, others create hype and news for the media intentionally buying pictures for several million dollars.Other manipulations of various kinds are also appropriate, however, there are those who firmly believe that their NFT will become more expensive over time, so they are building up their collection.

It is likely that the growing trends of digitization of information will contribute to the further development and use of NFT. In the future, functional non-fungible tokens will be in use, which will represent real value - material or virtual.

Of course, one should not dismiss the possibility that the rapidly growing popularity of NFT may fade as rapidly as it arose, and the NFT market may disappoint users.

Only time will tell whether the technology will be massively distributed and generate innovative directions and ways of application. In any case, NFTs have become a good impetus for the popularization of their creations by many artists, an interesting experiment for users and an impulse for the development of the entire crypto industry.


Another articles

GBP/NZD: signals & trading forecasts, features, characteristics, analysis
GBP/NZD, currency, GBP/NZD: signals & trading forecasts, features, characteristics, analysis In terms of activity, the Pound Sterling currency pair against the New Zealand Dollar (GBP/NZD) is one of the most volatile crosses with GBP, which is what many investors use, but the pair is still considered quite exotic.The British pound vs New Zealand dollar cross-pair is a financial instrument in which Sterling Pounds purchased for New Zealand Dollars are the main currency, but despite this, the analysis should take into account that the purchase of one currency for another does not go directly, but still through conversion into US dollars.On most charts, the pair's quote is displayed with an accuracy of up to 4 digits after the separator (1,7365), but some may display up to 5 characters (1,73650).Today, the most active day over the last 10 weeks of observations, in terms of trading on GBP/NZD, is Wednesday, and the least volatile days are Friday and Tuesday, not Monday, as for most other pairs. The course of the price on normal days is approximately 180-250 points per day, which is a fairly high indicator in comparison with most of the most popular pairs.If we take statistics on intraday trading sessions, then it moves most actively to the European (London) from 07:00 to 16 UTC (especially active from 07:00 to 09:00 UTC at the overlap of the European and Asian trading periods).Previously, due to the large difference in interest rates of Banks in New Zealand and England, as well as the predominant fall of the pair in the long term, carry trading (on bearish trends) was very popular for GBP NZD. It is still possible now, but the profitability of this strategy has decreased significantly in recent years.To make a long-term forecast for this pair at the moment is generally a very thankless task, due to the great unpredictability of price movements not only of these two currencies in one pair, but even each of them separately in relation to the US dollar (GBP/USD and NZD/USD). To determine the dynamics of the exchange rate for a shorter period of time, you can resort to technical analysis using a standard set of indicators.Read more: GBP/AUD: features, characteristics, signals, analysis & trading forecastsWhat affects GBPNZD quotesDespite the fact that New Zealand is only a small island state in the Pacific Ocean southeast of Australia, it has a fairly developed economy and a high standard of living. Such a strong Europeanization is due to the fact that the country has been an English colony for a long time, but by now the difference in the economic and political structure of the states has significant differences.Today, the structure of the New Zealand economy by sector is as follows:In the first place is the sphere of trade and services with 71% of GDP (banking, hotel, tourism, restaurant);Then the industry with a share of 24.3% (mining, energy, food);In the last place, as in most other highly developed countries, there is agriculture, which here, nevertheless, accounts for a fairly significant 4.7% of GDP (dairy and meat livestock, wool production).A good climate, the beauty of pristine nature and a calm socio-political situation attract many tourists from all over the world to New Zealand and every year their flow to the country only increases.The English economy is one of the most developed in Europe along with the German and French.The main share of the country's GDP is accounted for by services, trade and construction, but industry also plays an important role. Agriculture accounts for only about 1% of the state's GDP. Oil and gas production has been active on the North Sea shelf since the 70s. As for New Zealand, tourism plays an important role for the United Kingdom.Read more: GBP/CHF: online signals, forecasts for today, analysis & featuresThus, performing the analysis, the GBP NZD pairs first of all need to pay attention to:economic indicators of both countries (labor market, business activity, GDP inflation, etc.);trade balances of both countries;economic indicators of the USA and the European Union;US dollar exchange rate;Central Bank rates (England and New Zealand);oil prices and (to a lesser extent) gold;prices of livestock products (relevant for New Zealand);economic indicators of Australia.Correlation with charts of other instruments is not the last factor to be taken into account when compiling analytics for this pair. The Pound-New Zealander has the greatest correspondence on the daily timeframe with other cross-pairs, which include the British currency: GBP/NOK – 92.3%, GBP/AUD – 85.4%, GBP/JPY – 80.6%, USD/HUF – 80.2%, USD/JPY – 79.1%.The inverse correlation is observed with:NZD/USD – -81.3%, NZD/CHF – -78.9%, AUD/USD – -78%, EUR/TRY – -75.4%, Platinum – -75.3%, AUD/SGD – -74.3%, EUR/USD – -73.9%, XAU/USD – -73.6%, USD/TRY – -71.4% Palladium – -71.4%.Read more: GBP/USD exchange rate (Online Chart), forecast for todayFeatures of the currency pairDue to the significant difference in the amount of interest rates (0.25% for the UK and 1.75% for New Zealand), carry-trade is possible, but only when the currency pair is in a bearish trend, since in this case pounds are bought for New Zealand dollars, and not vice versa. At the moment, the software swap when buying is minus 15.17, and in case of sale – plus 3.23 points.Despite the significant size of spreads, due to the frequent change in the direction of the pair's movement within the day (up to 5 times or more) and impressive volatility, providing up to 250 or even 350 points per day on some days, the pair is suitable for short-term intraday trading. It is not always possible to call it scalping, because sometimes, in order to recoup the spread and get enough profit, you have to keep open positions for several hours. In such cases, the main thing is not to forget about risk management, stop losses and the direction of the main trend, so as not to miss and not get a large loss not only directly from the transaction, but also in the form of a significant negative swap. The Pound is trading well/A New Zealander and on the news.Due to the low prevalence and complex analysis, this pair is recommended only to experienced participants of financial markets who are well aware of the specifics of the currencies included in it and have enough funds on their deposit in case of drawdowns.
Jun 30, 2022
What is Forex and how does it operate
What is Forex and how does it operate The interbank Forex currency market has been operating for more than 40 years, but the controversy surrounding it has not subsided yet. There is no doubt about the existence of Forex – it is traded by governments of countries, major international banks, corporations, brokerage and dealer companies, etc. Daily turnover reaches several trillion dollars and is constantly growing. What is Forex, how did it appear and how does it function?History of the Forex marketAt the end of the Second World War, the economy was close to chaos. There was an urgent need to create a new type of currency system that meets the requirements of the time. The main financial institution of the world economy has become the IMF (International Monetary Fund), created to control the financial order in the world. The value of the US dollar, as the most economically developed state, was pegged to gold, and the currencies of other countries were pegged to the US currency. Thus, the dollar became the world's reserve currency or world money.However, the countries developed in different ways, and it soon became clear that the adopted system did not meet the realities. In 1971, it was abolished and a market-based currency valuation system appeared. The dollar has lost its status as the only world currency. Then the Forex currency market appeared on the scene, where interested financial institutions sold and bought the necessary currency. Banks and some other financial institutions made money on Forex by changing exchange rates. Currency prices were set exclusively on market principles.Of course, modern Forex is very different from its progenitor. Together with the Internet and computer technologies, this market has become available not only to the largest financial agents, but also to individuals who have the opportunity to work without leaving their home computer.Read more: Forex broker: how to choose a good brokerHow Forex differs from commodity tradingThe Forex market is based on currency purchase and sale operations of large financial structures in various countries. Courses are constantly changing, reacting sensitively to changing conditions of various kinds. It is on these fluctuations that speculative trading of Forex agents is based, earning on the resale of currency.The classic speculative principle of conventional commodity trading is similar to Forex trading. Buying a product at one price, the merchant resells it with a margin or waits for some time, during which, as it seems to him, the cost of the product will increase. You can trade at your own expense or for money taken on credit. Profit as a result of trading consists of the difference in sales income, taking into account margins and all types of costs, including the main one – purchase costs.Trading at the initial stages of the market formation was highly profitable. Often, the net profit from transactions was 100, 200, and sometimes 300%. Currently, it is almost impossible to make such a profit due to high competition and oversaturation of the market. Trade in goods is accompanied by expenses related to transportation, storage, rent, staff salaries and taxes. In addition, there is always a risk that the product will not be in demand. You can make trading profitable by taking out a loan or expanding the range (or quantity) of goods. It is also possible to reduce the price of goods so much that the turnover of goods will sharply accelerate. In any case, the profitability of ordinary commodity trading has fallen.An alternative option is Forex trading, devoid of the disadvantages of commodity trading. The advantages of Forex are obvious:Money always remains money – they do not go out of fashion and they do not expire.There is no need for retail premises, offices, employees.Only you will know about your income when trading on Forex.You can plan your day without being tied to a work schedule.You conduct all trading operations directly from home via the Internet.Read more: Bulls and bears, as well as other animals on the stock exchangeForex tradingSo, Forex trades world currencies, in other words, you can buy one currency by paying with another. The exchange rate is the purchase or sale price of a currency. Trading is conducted in currency pairs. The composition of a currency pair means which currency you can buy or sell. For example, the euro/dollar pair (EUR/USD) implies the possibility of buying or selling a certain amount of euros for American dollars.In principle, Forex transactions are similar to bank currency exchange. The difference is that the trader chooses the most favorable rate at a certain point in time, and sells or buys the desired currency, making a profit from it.Profit can be obtained both by raising and lowering the exchange rate. The speculative principle remains unchanged: the cheaper you bought a currency and the more expensive you sold it, the greater your profit will be.What you need to startThere are no restrictions in Forex trading. However, individuals can only make transactions through intermediary or brokerage companies. Such a company, on your behalf and on your behalf, will carry out transactions on Forex and will provide you with a special trading program (platform) for electronic currency trading. Forex makes it possible to make transactions for amounts significantly exceeding the trader's personal funds.Money in the form of an interest-free loan is provided to the trading broker. Lending volumes are characterized by the term "leverage", meaning the ratio of the trader's own funds to the maximum possible borrowed amount. It is clear that greater leverage implies the possibility of transactions with large amounts. For example, the established leverage of 1:100 will allow a merchant to buy $1 million, having at his disposal only $10,000 of his own funds.Before starting trading in a brokerage company, you should open a trading account and deposit your own money into it. This operation takes only a couple of minutes.Read more: How to read Japanese candles correctly? Instructions and examplesForex transactionTransactions take place over the Internet through a specially developed computer program called a trading platform. This program is presented by a broker. Data is sent to the platform in real time. You will see quotes of many currency pairs on a chart showing price changes. The visibility of the chart allows you to determine the optimal moments for buying or selling currencies.How are decisions made on the sale and purchase of currency? Such decisions are based on the analysis of the currency market. Of the two types of analysis, the trader chooses the one that seems to him the most reliable. If it is more convenient for a trader to compare economic, political and other facts, then he uses fundamental analysis. Many traders see mathematical and computer patterns in Forex trading principles. Such traders are guided by technical analysis.The trading platform offered by the trader includes all the data for both types of analysis. The information in the platform is constantly updated. The economic news coming here allows us to conduct fundamental analysis, and special technical tools determine the possible movement of quotations based on the statistical data of earlier trades. It remains for the trader to monitor the signals of the technical indication that serves as the basis for making transactions.Earning on ForexSpeculative profit on Forex appears as a result of buying a currency at the minimum price and selling at the maximum. For example, a trader, assuming that after a while the value of the euro will increase, buys euros. As a rule, the EUR/USD pair is used to carry out the transaction, that is, euros are bought for dollars. The instruction to the broker to buy the currency is given by pressing the Buy button. Accordingly, having decided to sell the euro due to the expected fall in the exchange rate, you need to press the Sell button.The instruction will be executed immediately, and all transaction data will be clearly reflected on the trading platform below the price chart. This data will include current currency quotes and the amount earned on the transaction. The transaction is closed at the moment when the trader decides that the operations have reached maximum profitability. At this moment, by pressing the "Close" button, he completes the transaction, thereby fixing the profit on it. The final result of the transaction is reflected on the trading platform, and the entire amount of profit goes to the merchant's deposit.Read more: How to read and use the Economic Calendar in tradingThe article contains only the basic concepts and principles of Forex trading, which, of course, are not enough for independent successful work. More detailed information about trading and various trading strategies can be obtained from training programs and detailed analysis of real transactions. You can risk your own money only when the trader is firmly confident in the correctness of the decisions made in various situations. You can make sure of your own readiness by using training trading programs that allow you to simulate a process absolutely similar to the real one without the risk of losing money.
May 22, 2022
Who are traders and why do they earn so much
EUR/USD, currency, Who are traders and why do they earn so much Acquaintance with the financial market begins with the identification of participants and the exact clarification of their functions. The market assumes the presence of the main actors on it – traders.  That is, a trader is a person who directly trades, the main market participant. This term can be applied to all types of markets. If we talk specifically about the financial market, then the trader here operates with assets, earning on their sale and purchase.Categories of tradersThe entire trading corps can be divided into two groups – professional traders and private traders (amateurs). Professionals are part of the staff of various funds, banks and other financial organizations. Accordingly, in the market they act on behalf of these organizations, making transactions with their assets. Simply put, these are certified financiers who go to auctions as if for work. The category of professionals also includes traders who work exclusively for themselves and operate with their own funds. Since they have no other profession, they can also be classified as professionals.The most numerous category is private amateur traders. Trading is not their main profession, and in the financial market they are engaged exclusively in additional earnings. Such traders do not have a specialized education, and they have to study independently. The financial market is attractive for the possibility of good earnings. That is why the number of amateurs exploring the market is constantly growing. The contingent of amateur traders is very mobile: someone, having failed and disappointed, leaves the market, counting on easy earnings also do not stay for a long time, but new, active and ambitious traders are constantly arriving.Trading in the financial marketIn order to make a deal on the financial market, a trader needs to give an order to a broker about the desire to sell or buy an asset. Of course, the result of such operations should be profit. In order for trading to be profitable, you need to deeply know the market processes and patterns of movement of the value of assets. Not everyone can boast of fundamental knowledge, so success does not accompany everyone. But perseverance and hard work are usually rewarded.Forex is not easy for a beginner, but the financial market has never been easy. If a trader from our days could be transferred to the stock exchange a century ago, he would also hardly be able to work right away. Firstly, he would be deprived of electronic devices and the Internet, from which you can draw the necessary information for trading, while maintaining contact with the broker. Secondly, he would be very limited in the possibilities of technical analysis. The theory of technical analysis itself did not exist at that time, and traders used separate provisions of Charles Dow, which were later systematized into a single theory.Today, the trader has all the tools to make the right decision. Prices are presented in graphic images of more than a dozen types, clearly demonstrating current and future fluctuations. The latest developments in the markets are published by many media outlets, including such reputable ones as Bloomberg or Reuters. Current currency quotes are transmitted online.The revolution in trading in financial markets has taken place in just a hundred years. Previously, a small circle of people had the opportunity to become a trader, but today the market is open to almost everyone.Read more: Five stages of becoming a traderFinancial market trading instrumentsFinancial market traders use technical and fundamental types of forecasting in their work. The technical one is presented graphically, and the fundamental one is based on economic data. By tracking the information on the terminal, based on the learned patterns, the trader predicts future quotes.The terminal is the most important tool of a trader, which is a platform for communication with a broker and an analytical tool. Modern terminals provide information on prices, various indicators and graphical tools.Modern trading is also impossible without automated trading systems, which are called robots or Expert Advisors in the professional slang of traders. Such systems trade autonomously according to the initial parameters. Such a parameter, for example, can be the volume of transactions. There is a lot of talk about the feasibility of using robots, but, in any case, no machine can be more effective than a competent trader.Another serious tool can be considered an economic calendar with announcements of economic events: speeches by economists and heads of banks, politicians, publications on economic topics, etc. So, a modern trader trades on the Internet using Internet trading platforms.Before the appearance of platforms on the Forex market, only large financial organizations participated in trading – banks, funds, etc. With the advent of the Internet, exchange trading has become accessible to ordinary users – knowledge and only a few hundred dollars are required.Trading strategyTraders have different views on the market situation – it is they who determine the trading strategy. One of the important characteristics of the strategy is the duration of transactions. According to this characteristic , several types of investors can be distinguished:long-term, making long-term transactions for several years. The analysis is based on global characteristics and indicators;short-term, making several trading transactions during the year;positional, working on a long-term strategy. Transactions last for several days with profit taking during periods of reduced activity (holidays, vacations, etc.);a day trader who makes transactions during the day (one trading session). As a rule, such traders have a small trading capital, and trading positions are realized quickly;a scalper who makes trades in a very short period (from a few seconds to 10 minutes). With a large number of operations, profitability is not ensured for every transaction. Traders working on this strategy are forced to constantly stay at the monitor and monitor suitable transactions.Read more: The main components of a Trading StrategyWhat does a currency player doFirstly, he trades various currencies. The principle of successful trading is simple – it is cheaper to buy and more expensive to sell. The trader operates with currency pairs consisting of two currencies. The most popular currency pair is EUR/USD. When buying such a pair, a trader buys euros for US dollars.The main advantage of the Forex market for traders is its liquidity. There is a constant supply and demand in Forex, and trading is conducted without interruptions five days a week. The choice of currency pairs for trading is wide: you can trade "majors" (the so-called pairs that are traded through the dollar) or "crosses" (without using the dollar).A trader should be ready to trade not only theoretically. No less important is the right psychological attitude, which is often ignored by beginners. Having familiarized themselves with a couple of strategies, they rush headlong into trading, risking losing all their money and forgetting about the two main enemies of the trader – fear and greed. Greed often kills capital, and fear does not allow it to increase.Many newcomers seek to get rich instantly by opening deals and not thinking about money management. Most often, such traders simply lose all their money. Trying to quickly increase the capital from $100 to $1,000, the trader opens transactions with a large volume, increasing the psychological burden. Mistakes appear, and money goes away. Risk management is very important for a trader. When opening a trade, a trader must accurately imagine the possible volume of not only profits, but also losses. Minimizing risks is the main task that a trader should be able to solve.Read more: How to become a trader from scratchFrom amateurs to professionalsA successful amateur of stock trading can become a professional. Professional trading has clear advantages: the trader now works only for himself, he does not need to go to work in the office, he plans his own working hours. But the main thing now is that the trader is the owner of his own capital, and only his well–being depends on his work.A professional stock market player lives by certain interests - news related to stock markets, currencies, economics, stock statistics, commodity prices. Plunging into this atmosphere, after a while the trader begins to understand this, makes decisions based on independent analysis. For a professional, there is no limit to the accumulation of information and knowledge. He is constantly improving – only this is the key to his success in the profession.
May 22, 2022
Who are ECN Forex brokers. Their advantages and disadvantages
Who are ECN Forex brokers. Their advantages and disadvantages ECN technology first appeared in 1999 and has been actively conquering the financial services market ever since. More and more ECN brokers and companies offering ECN accounts began to appear. But let's figure out how this transaction execution system differs from others, what advantages and disadvantages it has, and whether all traders really need to choose ECN accounts for Forex trading.What is the difference between an ECN broker?First of all, it is worth clarifying that ECN is not some special category of brokerage companies. In fact, an ECN broker is a broker that uses the ECN order execution system in its work.And in order to understand how this system differs from others, we suggest considering the most common systems on the market.DD brokersThere are two sides to trading in any market: the seller and the buyer. A broker, as a rule, is an intermediary, a way to enter the market and make transactions with the seller directly. If we talk about Forex trading, the broker must provide direct access to liquidity providers. But this is not about dealing centers. DD (Dealing Desk) brokers are counterparties that set their own quotes, above or below the market, and also offer a fixed spread. Such brokers are also called market makers, that is, companies that "make the market". The advantage of such a broker is the low size of the minimum deposit, the disadvantage is the lack of direct contact with liquidity providers and freezing of orders.Read more: What is Forex and how it worksNDD brokersThe non-Dealing Desk is the complete opposite of dealing centers. This order execution system in translation means "without the participation of a broker", that is, the broker does not interfere in the trading process and cannot influence quotes, the size of spreads and other factors. The NDD broker provides clients with access to the interbank market, that is, traders trade directly with liquidity providers. The task of an NDD broker is to bring transactions to the market, and the company's earnings are based on the commission that traders pay for placing transactions.STP brokersThis type of broker belongs to the NDD system: the company does not participate in transactions, does not affect the size of quotations and does not set its own rules. The STP broker trades using a computer system. The system transfers orders to the interbank market, that is, transactions are carried out without the intervention of a broker, and customers receive direct access to liquidity providers.ECN brokersFormally, such companies have a huge similarity with STP: they also belong to the group of NDD brokers, and often companies indicate that they are NDD + ECN. The broker does not interfere in the trading process in the same way, traders get access to market quotes, and transactions are brought to the interbank level. However, unlike STP, which uses a fully automated program to withdraw transactions, ECN broker cooperates with a network of international banks and other liquidity providers directly, and its trading platform is linked to them. This allows you to ensure the highest possible speed of execution of orders and also guarantees their accuracy.Read more: The history of the origin of the Forex marketWhat is an ECN accountActually, some brokers offer ECN accounts to clients, which allow them to take advantage of all the advantages of ECN order execution, namely, direct access to liquidity providers and fast execution of transactions.Novice traders need to be careful: brokers often position themselves as NDD + ECN brokers or offer ECN accounts separately. This means that the ECN system will be available only on this account, and on others, a different way of executing transactions is used. Also, beginners should take into account that ECN accounts often have a higher minimum deposit level. Therefore, brokers who offer an ECN system and at the same time set a low deposit need to be carefully checked.How to choose an ECN broker for Forex tradingIt would seem that what could be simpler? It is enough just to find a company that offers ECN accounts. But not everything is so simple. In order for cooperation with a broker to be reliable and long-term, and work to be comfortable, when choosing a company, you should pay attention to the following criteria:Trading platformThe most common Forex trading terminals are MetaTrader 4 and MetaTrader 5. However, some brokers create their own platforms that differ in both interface and functionality. Therefore, when choosing an ECN broker, professionals are advised to proceed from personal preferences and take into account whether the necessary instruments are available in their own broker platforms. Novice traders are recommended to choose brokers with MT4 and MT5 platforms. It's not just that their functionality is enough for both beginners and professionals. There are a lot of video and text materials on how to work on these terminals, while brokers' own platforms often remain without "instructions".InstrumentsTo trade with an ECN broker, it is advisable to choose instruments with sufficiently high volatility. They give traders the opportunity to earn higher earnings, provided that they use the ECN system. Instruments with high volatility include currency pairs (Forex), cryptocurrencies, CFDs and commodity futures. It is not necessary to use all these instruments, but it is desirable that the broker provides them.Read more: What is a Leverage in ForexLeverageECN accounts often have low leverage, up to 1:100. Only a trader can determine which leverage to choose based on his trading skills. Beginners are recommended to set leverage of 1:1, professional traders choose higher leverage, up to 1:100. In any case, it is worth remembering that leverage multiplies the amount of profit, but the higher it is, the greater the losses will be in case of an unsuccessful transaction.Minimum transaction volumeIt is impossible to trade micro lots (0.01 lots) on ECN accounts, the minimum lot is 0.1, and this is another reason why it is not recommended to open such accounts for users with zero trading experience.RegulationThis point is relevant regardless of which broker the trader wants to cooperate with: stock, Forex or any other. When choosing a company, you should definitely pay attention to regulations. If a broker is under the supervision of one or more regulatory authorities and has a license to provide financial services, then you can safely cooperate with him. Regulators ensure that the broker fulfils its obligations to the client, and a license is issued only if the broker meets international or local requirements. Checking the regulation, the trader initially weeds out all the "kitchens" — the companies of scammers. It is worth paying attention to the year of the company's opening and the site: "kitchens" do not bother with the interface, make the site simple and little informative, and they exist for no more than a year. Therefore, preference should be given to brokers who have been on the market for a long time.Liquidity providersAn important factor that will allow you to distinguish a real ECN broker from a Forex kitchen. When choosing a company for trading, it is necessary to check which liquidity providers it cooperates with. Reliable brokers, as a rule, cooperate with global suppliers. If information about suppliers is not available on the site, and the support service responds with the message "this is confidential information", then most likely this broker has nothing to do with the ECN system.Read more: What is margin trading: pros, cons and risksSoftwareThe success of trading depends on the quality and speed of the software, or rather, the correct execution of orders. Therefore, a trader, regardless of the type of trading strategy, should pay attention to the operation of the terminal. It is important that the program does not hang, does not crash, and does not give an error or requotes. This is especially important when choosing an ECN broker, because the ECN system is characterized by instant execution of transactions, and software problems only hinder this.Minimum depositIt's worth starting with the fact that brokers with ECN accounts initially set a higher minimum deposit level. It is a rare case when the price of opening an ECN account is available to all users. The high threshold of the minimum deposit is one of the main reasons why it is not recommended to open such accounts for novice traders: a beginner will easily lose the entire deposit and will be left with nothing since he has no experience in trading. Therefore, if you are a novice trader, think carefully about whether you really need an ECN Forex Broker. If yes, then choose companies in which the minimum deposit is relatively low, since the risk of losing all capital is quite high.These criteria are basic, both experienced traders and beginners can use such a checklist when choosing an ECN broker. To make it easier for traders to navigate, we have collected ECN brokers in the rating, where the minimum deposit amount and regulatory authorities of each of the companies are indicated.Professionals should start from individual needs and wishes.When should I open an ECN account?There is no doubt about the popularity of ECN brokers: they are preferred by thousands of traders from all over the world. But let's see if such companies can really be called universal, or if there are cases when it is unprofitable to open an ECN account.First of all, an ECN broker makes it possible to trade with liquidity providers directly. The trader does not depend on the broker, on quotes within the company or on other nuances. The broker is simply an intermediary. This means that the trader will get access to real market data. And this condition is beneficial to all traders.At the same time, ECN brokers offer a floating spread. This condition makes trading more difficult and unpredictable because a novice trader will not be able to assess the market situation and understand when it is better to open a deal so that the commission is lower. Also, this condition is not suitable for clients who are actively investing with conservative risks, because it will not be possible to calculate the exact amount of the commission, its size is constantly changing.Read more: I got a margin call: we explain what it is and how to avoid itDo not forget about the high-speed execution of transactions. This condition seems attractive, but in fact, it is not suitable for all traders. High speed is an important criterion when it comes to scalping. Traders with such a strategy really need to cooperate with ECN brokers, because the profitability of their work depends on the accuracy of order execution. Novice traders simply will not be able to take advantage of ECN technology.It is necessary to take into account the instruments with which the trader works. When trading cryptocurrencies, currency pairs and other assets with high volatility, the speed of transaction execution matters. But if a trader chooses to trade instruments with medium or low volatility, then the speed of work does not play such an important role, because the price of an asset simply will not have time to change in one or two seconds.So, if the speed of execution of transactions is important to a trader and he works with highly volatile instruments, then it is definitely worth opening an ECN account. In other cases, it is necessary to build on the trading strategy and the client's requirements for trading conditions.Is an ECN account suitable for beginners?Novice traders and investors, when choosing the first broker, often pay attention to absolutely all criteria in order to eventually choose the best of the best. This strategy can be understood because most traders want to choose a company for long-term cooperation, but there are criteria that are not so important for beginners. These include the availability of ECN technology.This system really has a number of advantages over dealing centers, and many novice traders are captivated by it. But it cannot be said that the presence of ECN accounts is a mandatory criterion and when choosing the first company for trading, you should pay attention only to ECN brokers. An analogy with cars would be appropriate here: to learn how to drive, it is not necessary to buy a Lexus or a sports car. Yes, they will surpass some Opel in terms of characteristics, but their functionality is redundant for a novice driver. To get basic driving skills, it's enough to start with driving an Opel.Exactly the same principle works with ECN accounts: a novice trader can open them, but it is not necessary to do it at the very beginning when there is no experience in trading yet. After all, a beginner, having gained experience, can always change the type of account or broker.Read more: Who are Market Makers and what are they doing on the market?Advantages of ECN technologyECN brokers appeared not so long ago, in 1999, but over these 20 years, they have become popular both among professional market participants and among those who are just taking the first steps in trading. We can talk about the advantages of ECN brokers for a long time, but we suggest first highlighting three main advantages:Fast execution of transactions.No requotes.Low spreads.Often these three factors are enough for a trader to pay attention to companies with ECN technology when choosing a broker. However, these are not the only reasons why it is worth choosing ECN brokers to work in the Forex market.It is equally important to understand how the broker earns. For example, the main difference between ECN companies is that their earnings consist exclusively of spreads - the commission that the trader pays for the execution of the transaction. That is, the broker is not interested in clients "draining" their deposit.Also, ECN brokers do not participate in transactions. The company does not influence the trading process, does not set its own quotation indicators that would be beneficial to it, etc. There is no human factor in ECN technology, so customers get access to real market conditions, and the trader's transaction gets to the counterparty who currently has the most favorable quotes.As we have already said, ECN brokers cooperate with the world's largest liquidity providers, therefore, the level of liquidity of instruments in such companies is very high. There is no option that a trader will buy an asset, and after a while will not be able to sell it. In addition, ECN companies, as a rule, provide services at the international level and assume a large trade turnover, so you can trade with them at any time of the day.Another advantage of ECN brokers as intermediaries between the market and the trader is the absence of restrictions. What does it mean? The ECN company is not involved in the trading process, and traders' trading strategies are not displayed in any way on the broker's earnings, so cooperation with the ECN company assumes that a trader can use any trading strategy, as well as a variety of instruments. ECN brokers often allow the use of Expert Advisors and other software to automate the workflow in trading.Separately, we need to talk about the high speed of execution of transactions. This factor becomes key if a trader is looking for a broker for scalping. And ECN brokers in this case become unequivocal favorites, because the trader, in addition to being able to use a scalping strategy, gets the highest possible transaction processing speed and access to instruments with good liquidity indicators.Read more: Features of intraday trading on the Forex marketDisadvantages of ECN technologyWhen choosing a broker, it is important not only to pay attention to its advantages but also to know exactly what disadvantages it has. ECN accounts are no exception, because, despite many positive aspects, they also have a number of disadvantages. These include:A high level of minimum depositECN brokers are often chosen by those traders who already have extensive experience in trading and who have built a trading strategy. They understand that ECN technology provides many advantages, and are willing to pay for them. Moreover, ECN brokers do not set the most affordable minimum deposit for traders.Difficulties in tradingIt is not so easy to make transactions using ECN technology. In order to trade and make a profit, a trader needs to understand the principles of ECN, as well as navigate the market, be able to respond to trends and sharp price changes, take into account the news release and analyze the market situation as a whole. Technical analysis instruments can help with this, but they will not replace your own trading experience. Therefore, novice traders are advised to choose the demo version of an ECN account in order to gain experience and not risk their money, and only then proceed to real trading.Read more: ECN Forex account: what is it?CommissionYes, ECN brokers earn income from spreads, but they can also include a separate, fixed commission per lot in the price list. At the same time, spreads are floating, their size depends on the market, and it is impossible to calculate exactly how much you need to pay the broker for the execution of the transaction. At the same time, it is definitely impossible to say that a floating spread is a disadvantage. Professional traders know how to use this factor for their own good and reduce the size of commissions, but it will be quite difficult for a beginner to deal with it. After all, spreads can both narrow and expand in certain market conditions.Whether to open an ECN account or not is not a rhetorical question at all. To understand if there is a need for it, it is enough to define your trading strategy and understand what conditions are important to you in order to achieve maximum efficiency in working on the Forex market.
May 18, 2022
Practical advices on choosing a Forex broker for a beginner
Practical advices on choosing a Forex broker for a beginner The first task that every novice trader faces is choosing a broker. There are many companies on the market, but not every one of them is suitable to start your way in trading. Brokers that are suitable for beginners can be determined by a number of criteria. We propose to analyze each of these criteria in order to learn once and for all how a novice trader can choose the first broker to trade on Forex.Broker selection criteria for novice tradersA novice trader should pay attention to the following criteria when choosing his first broker:reliability;deposit;types of accounts;instruments;methods of depositing and withdrawing funds;commissions;leverage;bonuses;training;support service.Having correctly evaluated each of these criteria, any novice trader will be able to easily choose a broker.Read more: Forex risk hedging: why is it necessary?Reliability of a Forex brokerThis factor is equally important for both beginners and professionals. Choosing a broker, first of all it is worth checking whether you can trust him. It is not difficult to do this - reliable companies have a license to provide services, they are registered and regulated by special authorities.The license can be either local (issued on the territory of a particular country) or international. To determine the country in which the broker is registered, it is enough to check the address of the main office: as a rule, it is in this country that the company is registered. As for regulatory bodies, the more of them, the better for the trader.You can check the availability of a license, the registration address and the presence of regulatory authorities in the "About the company" section.Pay attention to the dates indicated in the last line: in most cases, you can use them to determine how long the broker has been providing services. The exception is brokers who have rebranded and changed the site address, but they are rare.The longer the company exists, the more reliable it is. This information will help a novice trader distinguish time-tested companies from one-day scam brokers who receive money from clients, and then suddenly close, leaving the would-be trader with nothing.Talking about the safety of the client's capital. In order to avoid worrying about this, we recommend choosing companies with segregated accounts. What is a segregated account? This is an account registered with a bank or other financial institution in the name of a client to which the brokerage company does not have access. Thus, the trader can be sure that all his money will remain frozen and the broker will not use it for personal purposes.So, to choose a reliable broker, a beginner should focus on the following factors:Availability of registration and license.Which authorities regulate the broker's activities.The term of the broker's work.Does the company offer segregated accounts.If you cannot find the information you need on the broker's website, we recommend contacting the support service and requesting the data you need before opening a real trading account in the company.Broker's minimum deposit amountThe first thing that novice traders focus on is the size of the minimum deposit. In other words, this is the minimum amount by which a trader can top up his account to start trading. The lower it is, the more accessible the broker is. By the level of the minimum deposit set in the company, it is easy to determine whether the broker is suitable for novice traders.One can agree that some newcomers are ready to top up a deposit of $100 or more. And this is logical - Forex trading involves risks, and the broker does not guarantee that the trader will earn and be able to "recapture" the invested funds. It is for this reason that Forex brokers for beginners set a low deposit level.Each broker sets the minimum deposit amount independently. Some companies set a minimum of $10, but there are also those where the minimum deposit amount is only $1.  But we recommend leaving brokers whose minimum deposit starts from $100 or more in case you improve your professional level.Read more: How much can you really earn on the Forex marketTypes of Forex trading accountsBeginners turn to this criteria much less often, and in vain: after all, trading conditions, in particular, the number of available instruments, services and free functions, may depend on the type of account.However, it is not necessary for beginners to check the trading conditions for each of the accounts offered by the broker. At the beginning of the trading path, it is worth paying attention to two types of accounts:demo account;cent account.A demo account is a virtual account. With its help, novice traders can get their first experience in trading without risking their own money. It is worth noting that it will not be possible to make money on this account, its task is to give the trader the opportunity to practice and see the results of his actions, whether it is a virtual profit or a virtual loss.When the trader has gained his first experience on a demo account, you can move on to real trading. In this matter, the best broker for beginners is a broker who has cent accounts.Their difference from a regular account is that the amount on deposit is calculated in cents. For example, a trader replenished the account with $10. On a standard account, this amount will be displayed as $10, and on a cent account - as 1000 cents. Accordingly, it is possible to trade on a cent account using tiny amounts, however, the amount of profit will also be small.A cent account is also considered a training account, however, unlike a demo account, it allows you to trade in real market conditions and monitor the psychological reactions of a trader to receive a real loss and profit.Forex trading instruments and assetsThere are enough brokers on the market that offer a huge selection of instruments, but there are also companies in which the assortment consists of only 100 assets. Which broker is better for a beginner? Both the one and the other.The number of trading instruments is not a key criterion when choosing a company, but it is still worth paying attention to. The fact is that a novice trader needs not only to gain experience in trading but also to understand which instrument he likes to work with the most and to assemble his own "inventory". And this can be done only if the broker offers a fairly wide range of assets.This does not mean that you should choose a broker that will offer more instruments. The question, first of all, is diversity - it is important that the company offers not only currency pairs but also, for example, stocks, indices and metals. We advise you to focus on these criteria when choosing a broker.Read more: ECN Forex account: what is it?The most popular Forex trading instrumentsForex - this is how currency pairs are usually designated (for example, GBP/USD). When trading currency, a trader buys or sells the currency that is indicated in the first pair (GBP) while paying the second (USD) and earns on the price difference. There are both standard currency pairs and exotic ones, which include non-common currencies.Cryptocurrency is an extremely popular instrument, the benchmark of which is Bitcoin. This is an electronic currency that is not tied to any country, and you can earn it in different ways. For example, buy and sell on the same day, or buy and wait for its price to rise in order to sell the cryptocurrency more expensive.Metals - this group includes gold, silver, copper and other metals according to the standard.CFD is a more complex instrument. Its specificity is the ability to trade on the price difference. It works like this: a trader does not need to buy an asset to make money. CFD is a contract between a trader and the owner of an asset, in which a trader can make a profit if the asset price increases from the moment of purchase, or a loss if the asset price falls.Indexes - this instrument includes several stocks, and its value is the average value of all its components.ETF is also called an exchange-traded fund. In order to earn income, a trader buys a part of a ready-made investment portfolio and receives an equal part of the income from it.Stocks - Traders can also trade stocks of various companies. Such transactions are already carried out on the securities market, and not on Forex, and it is a little easier to predict their growth or fall.Options are the easiest instrument to understand, but they are not the most reliable. Options trading is based on bets: in order to make money, a trader needs to bet on whether the price of the instrument will fall or rise. If the bet worked, the trader makes a profit, if not, a loss.Methods of depositing and withdrawing fundsAnother equally important factor that newcomers to the market need to take into account is the payment systems with which the broker cooperates. A wide choice of ways to deposit and withdraw earnings really allows you to avoid difficulties with transactions and choose the most convenient way. However, payment systems are not only about a comfortable service.Much more important is the speed of crediting funds. Sometimes a trader needs to have more funds in his account to open a new deal that seems extremely profitable to him, and the only solution in such a situation will be the opportunity to make an instant deposit replenishment. And the transfer speed directly depends on the payment system.For example, transfers through banking systems can take from 2-3 working days, depending on the bank, so this option should not be considered for instant transfer. Cryptocurrency wallets also take time to process a payment, from 1 hour. But electronic payment systems allow you to top up your account in a short time. And the more electronic payment systems a broker offers, the more convenient it is for a trader. In particular, an instant transfer makes it possible to start trading immediately after opening a real account.Read more: How to read and use the Economic Calendar in tradingMost often brokers offer such methods for deposit and withdrawal:Visa;MasterCardSkrill;Neteller;WebMoney;Perfect Money.Forex broker's trading and non-trading commissionA novice trader should also pay attention to the commission when choosing a broker. It can be of two types: trading and non-trading.A trading commission is a fee that a broker charges for making a transaction. It is also called a spread. The spread can be either fixed or floating. A fixed spread is a clearly defined amount that the broker charges, its advantage is the ability to calculate its commission costs. A floating spread is more suitable for professional traders since the amount of commission can either decrease significantly or increase, depending on the market situation.The non-trading commission is a fee for other actions of a trader, for example, account replenishment and withdrawal of funds, for lack of activity on the account, for account maintenance, use of the trading platform and delivery of quotes. A non-trading commission is optional, a broker may not charge traders, but all brokers have a trading commission, and the only question is its size: the lower the commission, the more profitable it is for a novice trader to cooperate with the company.As a non-trading commission, it is taken into account whether the broker charges clients a fee for withdrawing earnings to their personal account. This commission may also be charged by the payment system, and not by the broker directly.The size of the trading commission for each of the account types presented in the company is set individually: that is, the commission can be up to $1 on a cent account, and $10 on a standard account. Keep this in mind when opening an account.Read more: Demo account with a Forex broker: is it worth using?LeverageWhen describing trading conditions, brokers specify such a parameter as the amount of leverage. What is it and does a novice trader need to take this criterion into account when choosing a company?Leverage is a function that helps traders increase the size of their deposits by using the broker's money. How does it work? Let's say a trader has replenished an account in the amount of $100 and uses a leverage of 1:10. Leverage increases the trader's purchasing power to $1000 and gives the opportunity to trade in larger volumes than with a deposit of $100.The use of leverage seems to be very profitable for beginners because with its help you can increase your profit, but not everything is so simple. Indeed, leverage can increase the income from the transaction, but it also increases the number of losses if the transaction turned out to be a failure.Brokers set different maximum leverage values: from 1:30 to 1:2000 and more. But this does not mean that a trader necessarily needs to use such a function. When opening an account and in its settings, the user can set the desired amount of leverage.Novice traders are recommended to set leverage of 1:1 to avoid possible losses and practice trading at their own expense. We recommend checking the use of leverage on a demo account to understand how it works and not to risk your own investments.Broker's bonus programsThe broker's bonus programs are a plus for a trader with any trading experience. For beginners, bonuses can be especially useful, because most brokers offer a welcome bonus — this is when a trader deposits, for example, $10 and receives the same amount as a bonus. The bonus is usually used only for trading purposes, in rare cases, it is available for withdrawal.The amount of the welcome bonus may vary depending on the conditions that the company sets for the bonus program. It often depends on the amount of the first deposit to the account: the higher it is, the more the trader receives bonus funds to the account. In addition, companies may offer other bonus programs.Brokers also offer an affiliate program, for participation in which you can receive additional income to your trading account. According to the standard, a trader needs to invite new users to the company using an individual referral link. For each of the attracted traders (they are also called referrals), the trader receives a financial reward.Despite the fact that bonus programs allow you to earn additional income, you should not consider them the easiest way to earn money. None of the bonus programs will give you experience in Forex trading, and you should use them only to get additional funds to your account.Read more: Copy trading or auto trading on ForexLearning the basics of the Forex marketThe best broker for a beginner is the one that provides opportunities for learning. It is as simple as possible to check this criterion - just look at the main page of the company. Useful information is usually found in a separate section called "Training" or "Education".The list of information that will be useful to novice traders includes:glossary/dictionary of terms;training videos on working with the trading platform;articles and videos on the topic of trading different instruments, their differences and features;materials about the psychology of trading;free webinars from leading experts;educational courses;trading guides;a library with books, news and other resources about Forex trading.Often, the FAQ section, which contains answers to frequently asked questions from traders, is no less useful for beginners. But this information is more often related to the trading conditions and services of a particular broker, and there are no trading tips in this section.Read more: Stock market Broker: how to choose it and how to work with itSupport serviceCommunication with the support service is another criterion underestimated by beginners. Trading conditions are undoubtedly important, but practice shows that at the stage of acquaintance with the Forex market, beginners have a lot of questions, which the customer support service helps to solve. The trader's comfort largely depends on the speed of its operation and the availability of convenient communication methods.A call is one of the fastest ways to communicate, but when calling, it is worth considering whether the broker offers a toll-free number for communication.It is worth sending a letter to email if the question is thorough (for example, related to finances) and not urgent since the answer to the email can come both within 15 minutes and within a day.Online chat is the fastest and most convenient way to solve any issue. The average response time in an online chat is no more than 10 minutes.The feedback form, as well as an email, takes time and is not suitable for solving urgent issues.The callback function allows you not to spend money to call the company. Instead, the trader needs to leave a request, and the support service will contact the client itself.In addition to the speed of response, it is also worth paying attention to the professionalism and level of service of the broker's employees. This factor makes it possible to distinguish a reliable company from scammers, since proven brokers offer assistance in solving any questions, and the answers of the support service are correct and aimed at solving the problem. While short and not informative answers often indicate that the broker is not interested in a long-term cooperation.Read more: Forex broker: how to choose a good brokerExpert opinion: what else to pay attention to when choosing the first brokerOf course, reviews play an important role in choosing a company: the more positive reviews about a broker, the higher the probability that he can be trusted. At the same time, companies with a small audience should be avoided if possible.Before opening an account with any broker, it is also important to carefully read the user agreement: it specifies how the broker solves disputes with clients. It is important to know this so that, if necessary, the trader can protect his rights.Pay attention to the broker's website: the more specific information is indicated there, the more reliable the company is. The lack of important information is the first alarm call that it is better to bypass this broker.
May 18, 2022
NZD/CHF: characteristics, features, signals, analysis & trading forecasts
NZD/CHF, currency, NZD/CHF: characteristics, features, signals, analysis & trading forecasts The New Zealand Dollar against the Swiss Franc (NZD/CHF) is a rather exotic and volatile cross–pair, as contradictory as the economies of the countries participating in it. Currencies are perfectly combined, complement and compensate each other: the franc gives the pair stability, predictability and pliability to any type of analysis (both technical and fundamental work well), while the New Zealand adds volatility.In the NZD/CHF cross-pair, New Zealand dollars are bought for Swiss francs, so the NZ dollar acts as the main currency here, and the franc is the quoted one. Despite the absence of the US dollar, it still implicitly participates in the auction, since the conversion of one currency into another does not go directly, but through it. The course is displayed as standard up to 4 characters after the separator (0.7048) or as in some individual terminals up to 5 (0.70456), taking into account the tick chart.Opening the long-term chart, you can see that in general, the price moves up and down with some frequency and a large amplitude in the range from about 0.58 to 1.05. The currency pair is flat most of the time and only occasionally there are strong bursts of activity up or down, as a result of which the price quickly passes hundreds of points, and then, as a rule, also quickly returns back. This pair is not characterized by long trends that continue for many years in one direction.The overall volatility of the pair varies greatly from time to time, in some periods it becomes very active and overcomes 200-300 pips per day, in others it fluctuates very slightly, falling short of a hundred. The analysis shows that Wednesday is the most volatile day for the NZDCHF, although Thursday is also not far behind, but Monday is the calmest.If we look at the intraday dynamics by the clock, it will be from 23:00 to 01:00 GMT in the Pacific session and at its overlap with the start of trading in Tokyo, Hong Kong and Singapore, as well as from 09:00 to 11:00 GMT in the European session, and especially from 13:00 to 17:00 GMT at the overlap with the American.Read more: CAD/CHF: description, characteristics, trading forecasts and feautures of the pairNZDCHF online forecast for todayThe NZD CHF forecast is based on technical analysis indicators. The strongest signal will be at a time when the forecast with the prefix ACTIVE will be repeated on all timeframes.Despite the fact that this is a cross-pair, the presence of a "Swiss" makes it quite predictable, stable and well amenable to fundamental analysis, which greatly facilitates the preparation of a forecast. The dynamics of the pair is well predicted on both medium-term and short-term charts, despite the fact that during the trading day it may change direction 2 or even 3 times.Low liquidity forces brokers to set decent spreads on this financial instrument (about 6-10 points), which, coupled with not too high volatility, makes scalping on this pair unprofitable and difficult. It is much more profitable to keep positions open for several days or even weeks, which, with a passing trend movement, allows you to earn more on swaps.Due to the fact that the pair is not widespread, it will not be easy to find ready-made analytics, but it is possible, for example, in thematic sections on trading forums. However, the undoubted advantage of this pair is its relative predictability and the ability even for an inexperienced trader, after a little research of the available data and the most important factors, to make his own forecast accurately enough.What does the NZDCHF rate depend on?New Zealand is a small island nation to the southeast of Australia, living by exporting services, oil, agricultural products and international tourism. The structure of the country 's economy today looks like this:About 71% of GDP is accounted for by trade and services (banking, educational, consulting, restaurant, etc.);The mining and manufacturing industry accounts for approximately 24.3% of GDP;Agriculture provides 4.7% of income.Read more: EUR/CHF: exchange rate, online quotes, signals and forecast for todaySwitzerland is a relatively small neutral state in western Europe. Located in a mountainous area, it is surrounded on all sides by the European Union, but, nevertheless, it is not part of it itself. The country is divided into administrative units – cantons (20) and semi-cantons (6), and has several official languages at once (French, German, Italian, Retro-Romansh).By sector, the Swiss economy looks like this:Services account for about 73.4% of the country's GDP;Highly developed industry gives 25.9%;Agriculture accounts for only 0.7% of GDP.International investments play a crucial role for the Swiss economy, and tourism plays an important role.Of the factors most affecting the dynamics of the New Zealand dollar against the Swiss Franc, it is necessary to highlight:the world price of gold;oil prices;trade balance of New Zealand (and to a lesser extent Switzerland);economic indicators of both countries, as well as the European Union, the USA and Australia;the volume of investments in the Swiss economy;Central Bank rates;change in the inflation rate;prices for agricultural products;weather and climatic conditions in the area of New Zealand (to a lesser extent, but also relevant for Switzerland).Read more: GBP/CHF: online signals, forecasts for today, analysis & featuresFor today, the D1 timeframe for this pair has the following correlation with other Forex instruments: NZD/USD – 93.4%, AUD/USD – 81.3%, AUD/SGD – 79.9%, NZD/CAD – 77%, Platinum – 72.6%, GBP/USD - 70.4%, CN50 and HK50 indices – 70.4% and 70% respectively, Gold – 67.8%.NZD/CHF has the strongest inverse correlation with: Euro/New Zealand Dollar – -96.3%, USD/NOK – -83.4%, USD/JPY – -80.1%, dollar index – -78.4%, USD/CHF – -76.3%, USD/PLN – -75.3%, USD/THB – -74.9%, USD/CAD – -74.4%, EUR/NOK – -73.4% and Pound/New Zealand – -73%.Features of the currency pairDespite the fact that the stability of the Swiss economy has significantly shaken in recent years, the franc still remains one of the most stable currencies in the world, and its presence in the pair makes it much easier to predict the exchange rate and fundamental analysis, since all the emphasis can be shifted to the study of factors affecting another currency.Circumstances allow carry-trading on this currency pair because the difference between the refinancing rates of the participating countries is quite large (1.75% for New Zealand and -0.75% for Switzerland). Today, the swap sizes are equal to: -0.77 for short and +0.35 for long positions. The values are not large at all, but nevertheless allow you to receive a small additional income under certain circumstances.Due to the fact that this New Zealand/Swiss pair often falls into a flat for a long time between important events, one of the best trading strategies that work on it and bring up to 40% profit from the deposit size per month is the eponymous TS Breakdown of the flat. For professionals working on long-term timeframes (D1 and more), Price Action indicator-free trading and its various varieties have proven themselves well.Since, as noted above, in the long term, the price moves up and down, almost always returning, potentially the most profitable, but at the same time the riskiest strategy will be martingale trading.
May 15, 2022
CAD/JPY: features, characteristics, signals, analytics & trading forecasts
CAD/JPY, currency, CAD/JPY: features, characteristics, signals, analytics & trading forecasts The Canadian dollar to Japanese yen cross-pair is not one of the most popular tools among forex traders, however, due to some of its advantages, it has a certain number of fans who earn good money on it.The CAD/JPY currency pair allows you to get a good profit due to high volatility and strong trends that can last for a long time, as on other pairs with the yen (especially cross-pairs).The average volatility of the CADJPY chart makes it possible to get decent earnings without big risks in medium- and long-term trading. The exchange rate chart shows fairly long trends, which makes working with the currency pair quite predictable and stable.General characteristicsThe CAD/JPY quote is a cross rate. In this pair, the dollar is the base currency, the dynamics of the currency pair directly depends on its exchange rate. The yen, as a quoted currency, affects the currency pair in the opposite direction, the growth of the Japanese monetary unit leads to a decrease in the value of the quotes of the currency pair.Since the Canadian dollar is purchased for yen, quotes for CAD JPY are displayed with an accuracy of two decimal places (for example – 86.55).The CAD/JPY currency pair is the most active in the Asian and American trading sessions, due to the region of the countries to which these currencies belong. Fans of long-term sessions are advised to analyze the situation during the European session (the first half of the day) in order not to be distracted by short-term dynamics.Read more: USD/JPY: chart, forecast for today, currency pair overviewWhat does the CAD JPY rate depend on?It is known that the Japanese economy, firstly, is highly dependent on raw material prices, and secondly, is largely export-oriented. Therefore, the Japanese authorities strictly monitor the exchange rate of the national currency, and even in the recent past, the famous currency interventions of the Bank of Japan took place.The Canadian economy is also largely export-oriented, where the main trading partner is the United States, but imports from Asian countries also take place, so Canada does not seek such a significant weakening of the national currency as Japan.Both economies depend on the situation on the raw materials market, but Canada not only imports it for the needs of industry, but also exports it (timber, wheat, oil). The land of the rising sun has very limited reserves of its own raw materials, which in no way can cover the needs of a developed industry, therefore it is forced to buy it in large quantities.The influence of fundamental factors on this pair is very large, but it is better not to rely heavily on technical analysis (especially in the long term). Today, economic news has a big impact on the pair, especially related to trade balances, oil prices and changes in Central Bank interest rates (first of all, Canada, since the Central Bank of Japan has been holding a low interest rate up to negative for a very long time).At the same time, there is an economic recovery, both in Japan and in Canada, and the importance of US policy may be exaggerated. Analytics and CAD forecast: The total volume of exports in Canada rose by 4%, and the country's exports excluding the United States soared by 9.5% (a record for 5 years). Imports increased by only 0.7%.In Japan, total exports grew by 5.4% (and in China by a record 12.5%), the trade surplus for the first time in 15 months has been maintained for 4 months in a row.The Canadian dollar is highly dependent on the US dollar. Two huge countries are trading partners, the collapse of the economy of one of them will certainly pull down the second. When analyzing the Canadian dollar, it is necessary to take into account the American economy.Canada ranks 5th in the world in terms of popularity among tourists, so the tourist business significantly affects the local dollar exchange rate. Moreover, tourism in Canada is year-round, so it should always be taken into account. With a competent approach, you can make decent money on this. If the well-being of the citizens of the world's leading powers improves, then they have more opportunities to go on vacation to Canada, and the currency of this country is strengthening. Conversely, international crises and unrest worsen the quality of life of potential tourists, there are fewer guests in the country we are interested in, the CAD is weakening.Read more: CAD/CHF: description, characteristics, trading forecasts and feautures of the pairFactors influencing CADJPY quotesThe economic state of Canada is directly related to oil prices, since "black gold" is the country's main export. The indicator of the national currency reacts sharply to the dynamics of the cost of raw materials.Situation analysis also requires taking into account the weather conditions in the countries. Various elements negatively affect both currencies for completely different reasons. In Canada, the weather rarely deteriorates, infrastructure collapses even less often because of it, but any negatives cause an outflow of tourists, and hence income to the budget. In Japan, the elements are raging more often, have serious consequences and can scare away large investors who want to contribute to the country's economy.Almost all major brokers host calendars of important financial events and news that will be a good help in trading and forecasting for this currency instrument.How to trade CADJPYExperienced traders have long established that this pair is largely correlated with the oil price chart (in some years more, in others less) and in some cases, the Brent oil futures chart can act for lovers of medium and long-term trading as a good pointer to the future vector of the pair's movement (previously it correlated with CAD/JPY by more than 87%).There is a significant correlation between EUR/JPY and CAD/JPY, which often exceeds 90%.Since Forex trading takes place around the clock from Monday to the end of Friday, and a high spread will not allow scalping, there is not much point in talking about the dynamics of the exchange rate and the level of volatility in the context of specific trading sessions within the day, but if someone is still interested, then the main trades for this pair are conducted in the American session and to a lesser extent degrees in European (London) and Asian (after the opening of the Tokyo Stock Exchange).Fans of "trading for a breakdown" can enter the market at the opening of the American session at 12:00 GMT or at its overlap with the European one.Read more: GBP/CHF: online signals, forecasts for today, analysis & featuresDistinctive features of a currency pairCAD forecasts The CAD/JPY pair has several important features that every trader who wants to start trading it should definitely know.A significant spread caused, as in other cross-pairs, by double conversion (Canadian dollars are changed to American dollars, and only then yen is bought for USD).The second feature follows from the first and lies in the fact that due to the large spread, CAD/JPY trading is poorly suited for scalping and other short-term strategies. The "piper" is unlikely to be able to recoup his trade at all, even despite the high volatility.It is obvious that the pair is complex, requires cash, experience and patience, and for those who want to make quick money on opening short-term deals, there are other more suitable tools, for example, the same USD/JPY, which does not have such a significant spread.CADThe Canadian dollar, also referred to as the Loonie or Little Dollar, is the seventh currency in terms of trade in the world. The issuer is the Bank of Canada. It is a "commodity" currency unit, since the economy is dependent on exports of timber, energy and oil. The Loonie is strongly influenced by the neighboring country of the United States and its economic component.JPYThe Japanese yen is the third largest trading currency in the world. Its issuer is the Bank of Japan. The "safe haven" currency got its nickname due to the low level of inflation, plus relatively high economic stability. Low interest rates make it possible to maintain a low value in relation to other currencies. The monetary unit is often used in trading operations, especially in Asia. The government's support of a low exchange rate is a historical tradition that creates favorable conditions for exporters and contributes to economic growth.
May 15, 2022
GBP/AUD: features, characteristics, signals, analysis & trading forecasts
GBP/AUD, currency, GBP/AUD: features, characteristics, signals, analysis & trading forecasts The GBP/AUD currency pair is characterized by volatility of decent strength with a sharp appearance of candlesticks with a length of 50-100 points, which is typical for most pairs with the pound.Like most other cross-pairs, this one also behaves quite unpredictably, and it is not known which is easier: to make a forecast yourself or try to find analytics on the network. Let's figure out these difficult questions and find the answers.General characteristicsThe British pound sterling - Australian dollar is a currency pair that is not very common among most Forex traders. A significant spread in this, as in most other cross pairs, makes it little suitable for scalping, however, due to rapid and sharp price movements in both directions in a short period of time, intraday short-term profitable trading strategies are quite acceptable.GBP/AUD quotes are displayed in the MetaTrader 4 terminal with an accuracy of up to 4 digits (in MT5 - up to five). The main currency is the pound sterling, while the Australian dollar is convertible, that is, the purchase of British pounds for Australian dollars is carried out. Since this is a cross rate, the calculations are carried out through the US dollar, for example, when buying AUD, pounds are sold for dollars, and Australian currency is bought with dollars.Read more: GBP/CHF: online signals, forecasts for today, analysis & featuresTrading forecast and analysisIt is obvious that the GBPAUD currency pair is contradictory and difficult to analyze, especially at the present time. On the one hand, the UK is leaving the EU, the future of which is currently very vague, and there is a possibility of losing Scotland along the way. On the other hand, the country–continent of Australia, whose economy has ups and downs, is highly dependent on natural materials and weather.Exports of food, energy, raw materials and minerals bring a significant part of Australia's income, this plays a significant role in the country's economy (where the services sector is dominant, providing jobs for up to 70% of the working-age population), and AUD is considered a commodity currency.According to experts, up to half of Australian exports are the sale of minerals (metals, oil, gas), but in general, resource extraction brings no more than 7-8% of GDP. Australia's main trading partner is China, whose economic slowdown does not bode well for Australian exporters of energy and raw materials.As in Australia, the UK economy is dominated by the services sector, which provides almost 30% of GDP, primarily financial, brokerage and banking services, famous offshore companies in British overseas territories, insurance and consulting services. The main trading partners of the United Kingdom are the EU (Germany, France, the Netherlands) and the USA.Known since the XVIII century for its power, the English industry eventually faded into the background in importance for the country's economy, but it is still very strong and gives almost 20% of gross income. An important role for the UK is played by oil and gas production focused on the North Sea shelf, but ironically, if a second referendum on Scotland's secession is successful, England risks losing all its northern deposits geographically related to Scotland, which categorically does not want to leave the EU.Despite the fact that Australia has been an English colony for a long time, due to time and local specifics, over the years of independence, the difference in economies has become significant, and the speed of reaction of national currencies to changes in the United States and the world is also very different.Read more: GBP/USD exchange rate (Online Chart), forecast for todayA significant difference in the interest rates of the banks of England and Australia (0.25% and 1.5%) allows you to use this currency pair to earn money according to the carry trade strategy (long-term purchase of a currency with a high refinancing rate for a currency with a low interest rate, in this case, buying AUD for pounds in order to sell after some retention, earning on profit from interest). However, such an approach can be dangerous in crises, as the case of the Japanese yen in 2008-09 has already shown.Of great importance for the Australian dollar is the price of gold, with which the AUD/USD chart is significantly correlated, as well as oil, gas and agricultural products.The GBPAUD pair itself correlates most of all with: AUD/USD -90.8%, AUD/CAD -87.7%, Gold -82.3% (inverse correlation); EUR/AUD 89.7%, EUR/NOK 82%, USD/CAD 76.2% (direct correlation). However, the accuracy of the above percentages is not constant and may change from time to time, both up and down, which must be taken into account in your calculations.Despite the fact that the US dollar does not participate directly in trading here, here, as in other cross-pairs, AUD is converted to USD, USD to GBP, so the US currency still has a significant impact. If you combine the AUD/USD and GBP/USD charts, the resulting value will be very close to what can be seen on GBP/AUD.To make money trading on GBPAUD, it is necessary to take into account the high spreads of the cross pair, which is why it will be profitable to trade in the medium and long term. The currency pair shows good long trends, so it is loved by positional traders.If you want to make money on short–term trading, it is best to use fixed Forex contracts, since they are devoid of spreads, and the profit on transactions is fixed. To make a profit, you need to specify whether the rate will rise or fall at a certain point in time, for example, after 10 minutes.Features of the currency pairGBPAUD does not lend itself well to technical analysis and sometimes behaves contrary to the probable expectations formed by the indicators. It should also be taken into account that the presence of a pound in a pair brings such an unpleasant feature to her behavior as a weak reaction to some, at first glance, important news or even almost complete absence of it.Read more: EUR/AUD: exchange rate, online quotes, signals, forecasts & analyticsDue to the high spread (reaching 10 or more points for some brokers) and a serious level of risk, this pair (as well as most other crosses) is suitable for trading exclusively for experienced traders who already know how to clearly catch trends and correctly track the dynamics of GBP/AUD.Options remain a universal and easier way to trade on this pair, an example of which we showed you a little above.No one forbids trading GBP/AUD and inexperienced Forex traders, but those who want to try their hand at such a difficult element will have to take into account that there is very little really valuable information and good analytics on such an exotic pair on the Internet today, and they will need to rely on their own strength.
May 15, 2022
Message sent successfully.
We will contact you soon!