Author: rcanessa - Page 38

Financial Assets – What is an asset?

What is a financial asset?

An asset is a resource with economic value that owns or controls an individual or entity, which is interchangeable and from which it is expected to obtain future benefit. The issuance of an asset generates a debt to the issuing party (seller) and a right in the title (buyer).

For asset issuers, these represent a form of financing of their economic activity, since they receive money from the title buyer and generate the obligation of a future payment (generates a debt in the issuer). At the national accounting level, financial assets are not accounted for in the calculations of the Gross Domestic Product and, therefore, it is considered that they do not generate wealth in the country, although they contribute to economic growth by facilitating the movement of resources.

What is liquidity in the market?

by rcanessa

What is liquidity?

In economics, business or investment, liquidity is the ability of an asset to be converted into cash quickly without losing its value.

Thus, market liquidity can be defined as the ability to buy and sell an asset without causing a significant movement of the price. It can also be defined as the facility to exchange an asset for products and services, cash being the most liquid asset since it can be used immediately for any economic transaction. However, there are cases in which money is not the most liquid asset, for example, in countries with high inflation or hyperinflation, the population tends to stop using the currency in favor of a foreign currency or the use of other system of exchange of goods and services such as barter, leaving a hole of liquidity for its national currency. In other cases, they turn to other assets, such as in Venezuela, where people turn to Bitcoin precisely because of hyperinflation.

What is the FOMC (Federal Open Market Committee)?

by rcanessa

What is the Federal Open Market Committee (FOMC)?

The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve responsible for the most important issues of monetary policy in the United States.

The FOMC is responsible for the country’s open market operations (ie, the buy and sale of US Treasury Securities by the FED). It is the Federal Reserve Committee that makes decisions about the interest rates and monetary resources of the United States. The FOMC establishes monetary policy by specifying the short-term objectives for open market operations of the FED, which is itself the target level for the federal funds rate (Federal Funds Rate is the interbank interest rate, which commercial banks charge each other for loans).

The FOMC also directs the operations carried out by the Federal Reserve System in the foreign exchange market (Forex), although any intervention in the foreign exchange market is coordinated with the US Treasury, which has the responsibility of formulating the policies of the United States with respect to the exchange rate of the US dollar.

Inverted Rounding Bottom Chart Pattern

by rcanessa

The Inverted Rounding Bottom is a figure which consists of a chart pattern that is very similar to the regular Rounding Bottom but in opposite sense as it appears in bullish markets as a trend change formation.

Review of ForexTime Broker (FXTM) – Regulated Forex and CFD Broker

by rcanessa

ForexTime Broker Review

ForexTime (FXTM) is a Forex and CFD broker from Europe which allows trading with Forex, precious metals and Contracts For Difference based on indices, stocks and commodities. This company offers a variety of services, including ECN execution, access to many markets, modern trading platforms, solutions of Forex automated trading and more.

It was founded in 2014 and has its headquarters located in Cyprus and customer service centers in several countries, including France, Spain and the United Kingdom among others. It is currently regulated and registered with several financial services regulators such as CySEC, for example.

What is a bullish trend channel?

by rcanessa

An ascending channel is a chart pattern formed by two parallel lines and with ascending inclination that contains the price action. It is also known as a bullish trend channel or simply a bullish channel. Although the price does not always adapt perfectly to the interior of the canal, the lines that form it point to important support and resistance areas.

The price channels show graphically the market trend and are a useful tool for their ability to predict changes in the general market trend. As long as the price remains inside the ascending channel, the bullish trend will continue, much more if there is a maximum above the upper line. On the contrary, the breakout of the lower line is a bearish signal and it can mean a possible change of trend.

HotForex improves the conditions of their trading accounts

by rcanessa

HotForex is a global broker specialized in Forex and CFD which is constantly looking for new ways to enhance their clients’ experience. Recently, the company have just made some great improvements to their trading accounts, including the reduction of the minimum deposit, the increase of the maximum leverage and the reduction of the trading commissions.

New conditions of HotForex accounts

Clients with Premium, Zero and Auto accounts will now be experiencing the following changes:

What is the Fed? – The United States Federal Reserve

by rcanessa

The Fed, Federal Reserve System, is the central banking system of United States whose objectives, according to the documentation of the entity, is to make the monetary policy decisions of the country, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to deposit institutions, the government of the United States and official foreign institutions.

In other words, it is the Central Bank of the United States. It was created in 1913 through the Federal Reserve Act, mainly as a response to a series of financial panics, especially the one of 1907.

Bitcoin Markets Trend For 2019

by rcanessa

As proven in 2017, Bitcoin markets are overly sensitive in their reactions. In 2017, Bitcoin price soared by 1,800% to peak at over $19,000 and generated a market capitalization of over $250 billion. In contrast to 2017’s movement, the turmoil during 2018 led cryptocurrencies into a great crash. Bitcoin had a total market capitalization of around $65 billion by the end of 2018, reversing 70% of its 2017 market value in a year marked by volatility and higher volumes.

Bitcoin markets started the year on a smooth downwards swing. The hacking of the Japanese exchange Coincheck at the end of January, China’s talks regarding cryptocurrency banning and Facebook’s ban on cryptocurrency and ICO advertisements were some of the factors that added pressure on Bitcoin’s price. Certainly, it has not been a good period for the most famous cryptocurrency and the sector in general.

The US Securities and Exchange Commission (SEC) also had a negative effect on Bitcoin markets after rejecting BTC ETFs. A further drop was seen in September, which is believed to have been caused by a single wallet discharging nearly $1 billion of BTC into the market.

The Sortino Ratio – good and bad volatility in your investments

by rcanessa

To correctly analyze the performance of investments in the stock market and other financial markets, it is always advisable to relate profitability with respect to risk. One of the most used ratios for this is the Sharpe ratio. But today we will see that it is possible to further refine this measure using the Sortino ratio. Both ratios serve to measure the expected return of an investment fund, calculated on the expected return of an asset without risk, however, they present a series of subtle differences that we are going to show next.

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