Category: Forex Education - Page 8

Trading Strategy with the Non-Farm Payroll (NFP) Indicator

The Non-farm payrolls (NFP) indicator is the report on total salaried workers in the United States except agricultural jobs, government workers, nonprofit workers, and private domestic workers. Today it is a key economic indicator for the United States.

The publication of the NFP report causes very wide movements in the Forex market, which are among the largest movements produced by the publication of economic news. This is why many analysts, investors, speculators, and investment funds try to anticipate the result of the NFP and the movement it will cause. Due to this great expectation before the publication of this economic indicator, the market can react with wide movements even when there is no deviation between the forecast and the final result of the NFP.

In this article, we are going to discuss some trading aspects related to this economic indicator, especially to avoid the exposure to excessive risks due to the high volatility that the release of the NFP can cause.

Internacional Trade & Trade Balance of USA

by rcanessa

General definition and importance

The “International Trade & Trade Balance” is an economic report that measures the difference between imports and exports of goods and services in countries like United States. Imports and exports are important components of accumulated economic activities. Furthermore, representing 14 and 12 percent of the gross domestic product in the United States, respectively. Normally, increases in exports are positive for corporate profits and also good for the stock market. Changes in the trade balance with particular countries may have implications in the monetary policy with respect to those countries for which this report is important for investors who are interested in diversifying their investments globally.

The main stock indexes in the world and the funds that replicate them

by rcanessa

Investment in the stock markets has historically been very profitable. During the twentieth century in almost any decade buying equities proved to be a good strategy to preserve purchasing power. However, very few investors in that period will have obtained exactly the results that the market averages show.

When we talk about the evolution of the stock market and markets in general, we almost always refer to some index. This index is usually made up of a number of companies and aims to represent an important segment of the market. For example, the S&P 500, one of the most followed indices in the world, represents the equity of large companies in the United States. Its evolution is closely linked to the evolution of the US economy and companies.

Today we live in a very globalized world, and financial markets are increasingly interconnected. In the same way, more and more investors are observing global indices that seek to reflect the evolution of the economy worldwide.

From the commercial war to the currency war. How does the economic battle between the United States and China affect the economy?

by rcanessa

The trade war between the United States and China has lived its nth chapter, with the establishment of new tariffs between the two countries, for tens of billions of dollars.

Donald Trump and Xi Jinping continue to fight a battle that involves not only a commercial pulse between the two largest economic powers on the planet but also a fight for global supremacy, for the ability to influence throughout the world.

Naturally, this struggle between the two superpowers, which agglutinate 40% of the world’s GDP (another 20% corresponds to the European Union), affects not only both contestants, but also has multiple and varied effects on other economies. And more if we take into account that together with the increase in tariffs, we have a currency war, more or less buried.

Gaps in Forex – Definition and Main Gaps Types

by rcanessa

Do you know what a GAP is in Forex? The foreign exchange market has a range of fluctuations in its transactions, which can be predicted through chart analysis and other market analysis tools. However, this fluctuation can cause sudden “jumps” in the price of a currency, without giving opportunity for transactions between one price and another. This is known as gap in Forex.

Therefore, we can define a price gap as a breakout in the continuity in the price line with respect to time. It occurs when the price experiences an upward or downward movement without any transaction between the previous price and the current price.

Time is also relative for markets

by rcanessa

The use of moving averages that take time in the form of days, hours, minutes and other time frames as a unit, is an arbitrary construction that can also have risks. Is there another way to calculate moving averages without having to depend on the passage of time? This article will explain an original and more effective way. The time … Read more

What is a limit order in Forex trading?

by rcanessa

What a limit order?

A limit order can be defined as a trading order given to the broker or dealer to buy or sell an asset at the specified price or better.

As a limit order is executed only at the specified price or better, a limit buy order will be executed only at the specified price or at a lower price, while a limit sell order will be executed only at the specified price or at a higher price. In both cases, a limit order is only executed if the market price reaches the limit price (price specified in the limit order) or passes it, which means that a limit buy order is accepted only if the limit price is less than the current market price and will be executed if the price falls to the limit price or to a lower price. A limit sell order will be accepted only if the specified limit price is higher than the current market price and will be executed only if the market price goes up to that limit price or up to a higher price.

What is the stop hunting?

by rcanessa

Stop hunting is called the practice that consists in forcing the positions of retail traders, causing a movement in the price action, up or down, until the price reaches the levels where stop-loss orders have been placed. This leads to stop losses being executed in such a way that retail traders are expelled from the market while another investor benefits from it. It is a strategy used mainly by large financial institutions that have enough capital to buy and sell and influence market prices.

The fact that traders place their stop loss levels at key points such as supports or resistances, relevant moving averages, Fibonacci levels, or integer figures, allow the stop hunting to be carried out.

In other words, the large market participants extend the price considerably with the sole purpose of activating the automatic protection closures (Stop Loss Orders) of retail traders.

Exotic Financial Options

by rcanessa

What are exotic options?

The OTC markets (Over The Counter) are a constant source of financial innovations that are trying to adapt the characteristics of the different instruments to the specific needs of hedge of different economic agents such as traders. In the case of financial options, one of the most interesting innovations that have emerged in recent years is the exotic type, which can be subdivided into four types:

Compound options or options on options.
Options with dependent value on the historical evolution of the underlying asset (path-dependents).
Conditional Options.
Options based on several underlying assets.

Risk Free trading – dealCancellation of EasyMarkets

by rcanessa

The Forex and CFD broker EasyMarkets (regulated by ASIC and CySEC) now offers a new tool called dealCancellation, which allows its clients to carry out risk-free trades. With this resource, the client can cancel his losing transactions up to a maximum of 60 minutes from the moment the position is opened. In other words, with dealCancellation it is possible to cancel a losing trade that was opened in a period of less than one hour and get back any loss incurred.

The dealCancellation tool can be applied under the following conditions:

When the trader feels insecure about market conditions and considers the result of his trades to be uncertain.
During major market events, such as the publication of important economic indicators or announcements such as Non-Farm Payrolls, where the market presents excellent opportunities to obtain great benefits but the level of risk is also very high.
During periods in which the market has higher levels of volatility than normal, in which it is more difficult to predict the behavior of prices, and risks are higher.
When the trader performs transactions in which he is trading with higher volumes than normal. In these transactions, a trader can apply dealCancellation to limit the risk and avoid large losses in case the market moves against his position and at the same time have the opportunity to obtain higher profits with high volume trades.

– Period of validity of the promotion: This promotion has no deadline as it is an active service of the broker EasyMarkets for all its customers.

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