You can invest in the stock market directly, meaning when you decide when, how much, and in what way you invest.

For that, you need to have experience in trading on the stock market, the necessary information on market developments, a short-term and long-term strategy, the necessary accounts and trading tools, and most importantly - investment assets.

You can also invest in the stock market through investment funds, which is much more comfortable.

Investing in the Stock Market or Not

This has become a rhetorical question these days. Investing in the stock market is the best way to fertilise your capital and finally make your capital work for you. However, it’s necessary to know how to invest directly in the stock market, and to approach it extremely carefully and only after generous preparations.

If you don’t have the necessary knowledge to be able to invest in the stock market on your own, the best option available to you is through investment funds. Anyone who engages in trading on the stock market and doesn’t have the necessary knowledge is doomed to failure, and even worse - will lose all their invested money.

About 80% of trading on the stock market is done by insufficiently professional traders. That’s why there’s always a great opportunity to make money on the stock market.

Direct Investment in the Stock Market

Direct investment in the stock market means that investors independently hire brokers to whom they give instructions for buying or selling items with which they want to trade on the stock market. They are offered many opportunities: from trading the best shares in the UK, raw materials, derivatives (financial), currencies, cryptocurrencies…

In this sea of offers, investors need to decide what they want to trade with because each of these products requires a different tactic, parameters, trading rules, etc.

In addition to this, it’s necessary to decide the dynamics of trading. This refers to the dynamics with which they want to monitor changes in the stock market. From changes at the level of seconds to changes at the level of days, weeks, or months. The faster the dynamics, the greater the knowledge and self-control required.

Direct Investment Costs

Investing in the stock market isn’t cheap. In addition to the funds you’re willing to invest, it’s necessary to take into account the investment costs, which aren’t small at all. They are different in relation to the amount of planned investment, trading dynamics, conditions under which you start investing…

The most common costs to count on are the cost of opening a trading account, the cost of a broker, the cost of the stock market, the cost of buying, the cost of selling, the cost of taxes, and the cost of withdrawing funds. All of these costs can take away the profits you make through trading, and it’s extremely difficult to make a net profit.

And note: direct investment isn’t recommended for so-called “small“ investors.

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Investing in the Stock Market Through Investment Funds

Investing in the stock market through investment funds is truly the most comfortable way to invest. The investment fund, as a collective investment institution, is designed to help “small“ investors to participate in world markets under the same conditions as “large“ investors. Funds of investment fund members are collected and invested under previously agreed conditions (investment fund prospectus).

The costs are calculated as if invested by one investor and are divided among the members of the investment fund. This reduces investment costs and most of the funds are invested.

Advantages of Investing Through Investment Funds

Investing in stock markets through investment funds has many advantages over direct investing. Let’s list some of them:

• Reducing investment costs
• Provided professional investment management by portfolio managers
• Monitoring market movements by consulting firms
• The possibility of investing in several types of products
• Portfolio diversification by industries, currencies, and geographical diversification
• The ability to choose the risks you want to accept
• Constant control of your investment
• Maximum liquidity of funds
• Cost-benefit transparency

Reducing Investment Risk

The risk of investing in the stock market is always present. We can’t avoid it but we can define and diminish it.

• Defining risk means determining exactly how much risk you’re willing to accept, and therefore how much profit you expect from your investment.
• Risk reduction is achieved by diversifying investments, while the risk is higher if you’ve invested in a smaller number of products.

If you want low risk, you’ll invest in a money market fund, which invests only in bills, bonds, bank deposits, and the like. If you’re willing to accept a higher risk, you’ll look for a balanced fund, which invests part of the money in bonds and part in shares.

For investors who accept even greater risk, the chosen fund is an equity fund. For investors who want a high level of risk, the right choice are hedge funds, Forex, and cryptocurrencies.

This reputation has been particularly prevalent since July 1997, when the region gained independence as a sovereignty and set about establishing itself as a low-tax haven with a raft of lucrative free trade agreements.

In the modern age, however, what is it that makes Hong Kong such an attractive proposition for international investors, and what role does the digital sector play in this?

Accessing a Free Market Economy

The most apt description of Hong Kong was provided by the economist Milton Friedman, who opined that the region was the world’s greatest experiment in laissez-faire capitalism. There can be little doubt that Hong Kong represents the quintessential free market economy, and one that’s built on the principle of lowering trade barriers and minimising corporation tax (this is currently fixed at 16.5% and will not change until 2022 at the earliest).

This is one of the main reasons for the popularity of Hong Kong amongst overseas business owners, who’ll have the opportunity to minimise their operating costs and boost their bottom line profit accordingly.

The low rate of corporation tax is also appealing to forex trading firms, which already benefit from the fact that most brokers don’t charge a levy on currency trading. Not only this, but Hong Kong is now ranked as the fourth-largest financial centre in the world with a 7.6% share of the global forex market, while the region is also home to the second-largest exchange in Asia (behind Singapore). Hong Kong is also renowned for having the fifth-largest stock exchange and largest initial public offering market in the world, and this highlights the appetite for domestic and international investment in an open and prosperous economy.

The low rate of corporation tax is also appealing to forex trading firms, which already benefit from the fact that most brokers don’t charge a levy on currency trading.

The nature of Hong Kong’s economy also contributes to an incredibly influential and cash-rich consumer base, which ensures that firms are able to optimise turnover on an annual basis.

In US dollar terms, one in seven Hong Kong households exist in the millionaire category, and while real estate represents 70% of these assets, there’s clearly an opportunity for international businesses to thrive and target affluent consumer demographics.

How is the Digital Sector Faring in Hong Kong? 

Despite the issues that the region has faced in terms of social unrest and angst, it continues to record average annual GDP growth of around 5% in real terms. One of the key factors here is also the rise of digital and web-based businesses, with Hong Kong’s relaxed commercial climate ideal for low-overhead and tech startups who wish to target a vast and diverse marketplace.

The open nature of Hong Kong’s economy also means that it’s easier than ever for companies to invest in advanced technologies and computational infrastructure, creating a competitive and potential lucrative landscape where profit margins are often higher than in developed economies.

Make no mistake; there’s a clear alignment between the values of Hong Kong’s economy and the ambitions of domestic and overseas SMEs, and this continues to build the digital landscape and lead into a far broader economy-wide transformation. Of course, we’ve already touched on the viability of launching a digital forex trading business in Hong Kong, and this is indicative of an economy that’s perfectly suited to online companies and tech-led startups.

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In terms of the best practice, the way in which you open a business in Hong Kong (digital or otherwise) will depend on the sector that you operate in. For example, firms looking to operate in the competitive forex space will need to identify a key differentiator, while also relying on key knowledge and datasets from the Asian marketplace.

The same principle of standing out from the crowd also applies when launching a business in the digital space, with marketing and the ability to target key demographics in Hong Kong also crucial to new ventures.

Foreign exchange (forex) accounts for the world’s largest financial market. In fact, it was valued at $6.6 trillion (£5.3 trillion) last year, with London reigning as the largest forex market with a 43% share.

Here are some things that you need to know before making your very first trade:

Learn the basics

Forex, or the world of finance in general, can be very intimidating for the average person. The first step to breaking that barrier is to learn the fundamental aspects as well as common forex trading terms. Here are a few key terms that should be in your vocabulary:

• Currency pairs - Forex is always traded in a pair of currencies, which represents the value of one against another. For example, GBP and USD is represented by GBP/USD or vice versa.
• Base – The first currency in a pair. For example, GBP in a GBP/USD pairing.
• Quote – The second currency in a pair. For example, USD in a GBP/USD pairing.
• Exchange rate - The amount of quote currency needed to buy 1 unit of the base currency. For example, GBP/USD = 1.2252.
• Bid - The price at which you’re willing to buy the currency pair.
• Ask - The price at which you’re willing to sell the currency pair.
• Pip - The smallest price changes given an exchange rate.
• Spread - The difference in pips between the Bid/Ask prices.
• Leverage - A trader’s borrowed capital from a broker’s credit. This allows traders to fund their trade without having to pay the full value upfront.

Understand the factors that affect forex

Knowing the right words is only the first step. You’ll need to have a working understanding of what moves currencies in the first place. This allows you to make an educated trade and minimise the risk of incurring any losses. These are some of the most important factors that increase trading risk:

• Interest rate - Rising interest rates generally correspond to a stronger exchange rate, while falling interest rates can result in a depreciation in currency value.
• Country - Take note of the country’s economic stability, especially for developing or third world nations.
• Counterparty - It refers to the broker or trading platform used which come with their own risks.
• Leverage - The more leverage you acquire could potentially lead to a bigger loss.
• Transaction - Communication or confirmation errors that can lead to a loss. For instance, significant time difference between markets leave plenty of room for market fluctuations, which can impact the trade made.
• Politics and Economy - Both have significant impacts on a country’s performance in the forex market. For example, the expected 25% downfall in the economy of the UK during Q2 will likely lead to a weaker performance of the GBP against other currencies.
• Liquidity - The high liquidity of the forex market means the demand and supply can vary wildly, which can affect market prices.

Choose a reliable forex broker and trading platform

To start trading, you need to find a reliable broker and the right trading platform. A broker is an individual or a firm that facilitates your trade. You buy or sell through a broker, who also gives you the leverage needed. When choosing a broker, find out whether they are regulated by The Financial Conduct Authority. See if they also offer a trial period so you can sample their services before committing to a certain brokerage firm.

A trading platform, on the other hand, is the software that allows you to access and trade in the forex market. Most offer demo accounts, which enable you to experiment and practice trading under real market conditions. Understand that trading forex is not without risk. However, knowing basic information, such as industry terms, allow every kind of trader to make more favourable decisions.

Selecting a forex broker isn’t easy. When doing this, you need to be aware of many things:

• Security and Regulation
• Trading products
• Instruments for Trading
• Trading platforms

Apart from checking these, keep in mind the forex market is uber-competitive. And high competition can offer both advantages and disadvantages. On one hand, you have got brokers lowering their prices to nearly zero just to fetch more customers. On the other hand, not all these forex brokers are trustworthy.

So, is there a way to choose a good broker? We’ll answer that in this article.

There’s no “Perfect Broker.”

Right off the bat, there’s no such thing as a “perfect broker.”

There’s always something. For example, a broker might offer you cheap services. But the same broker has a not-so-good reputation among traders. Maybe it’s not regulated. Or maybe it doesn’t have sufficient fund protection policies. Maybe it’s a scam.

On the other hand, you might find a broker that’s regulated, trusted, and highly popular among traders. Its platforms and trading instruments are excellent. Additionally, customer service is super accommodating and friendly. It has everything you need. But the prices will drain your pockets. Maybe the transaction costs are high. Maybe the trading instruments aren’t cheap.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Importance of Regulation

Now, you might be looking at hundreds of forex brokers at the moment, and you just can’t choose which one’s right.

To help you narrow down your choices, check their regulatory status. This step is the first and most crucial step you need to take. Regulated brokers typically offer the best policies and security clauses for traders.

But you should not go for just any regulator. There are top tier regulators, and then there are those that just don’t cut.

So, when choosing a forex broker, remember to keep a balance between reasonable prices and excellent services.

Top Forex Regulators Around the World

In the United States:

• National Futures Association (NFA)
• Commodity Futures Trading Commission

In the United Kingdom:

• Financial Conduct Authority (FCA)
• Prudential Regulation Authority (PRA)

In Australia:

• Australian Securities and Investment Commission (ASIC)

In Switzerland:

• Swiss Federal Banking Commission (SFBC)

In Germany:

• Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)

In France:

• Autorité des Marchés Financiers (AMF)

In Canada:

• Investment Information Regulatory Organization of Canada (IIROC)

Trading Products

When we say trading products, we mean every asset the broker offers. And since we’re talking about forex brokers, they should provide forex products. Essential forex products include all the major and minor pairs.

If you’re not familiar with the majors yet, here they are:

• EURUSD
• USDJPY
• GBPUSD
• AUDUSD
• USDCHF
• NZDUSD
• USDCAD

These are the essential pairs you may trade. They get the most significant trading volume in the market, as well as the broadest news coverage. So, it’s easy to buy them and search for information.

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Trading Platforms

After checking out what you can trade with the broker, check out where you can trade those assets. The trading platforms are your portal to the market. They’re the bridge connecting you to the world of currencies and currency pairs.

In the forex market, the most popular trading platform is MetaTrader4.

What is the MetaTrader4 (MT4)?

MetaQuotes developed the MT4 in 2005. Although traders can use it to trade stocks, indices, cryptocurrencies, and commodities, they mainly use it for forex trading.

Most forex brokers offer the MT4 platform to clients as an industry standard. It comes with excellent trading features such as the following:

• Built-in indicators
• Timeframes
• Economic calendars
• Drawing tools
• Charting tools

And many more. The MT4 is a useful, high-quality platform every trader needs in forex trading. Also, traders can use them on different devices.

A forex broker can also offer platforms other than the MT4. The newer platform and successor of MT4, the MetaTrader5, is also now available in many brokerages. Other times, forex brokers develop their in-house platform. Such platforms typically fit the more specific needs of the broker’s clients.

Read Broker Reviews

Reading a forex broker review goes a long way.

When you finish checking the broker’s background, products, and platforms, it’s time to read from people with first-hand experience with the broker.

Reviews from websites are usually a treasure trove of information about the broker. They talk about more things other than products, platforms, and regulatory status. You’ll get to know the broker’s customer service. Are they accommodating? Friendly? Are they rude? Unprofessional?

You’ll also know how the broker ranks in comparison with others in the field. Are they popular among traders? Do they receive negative reviews from angry traders?

Moreover, with readily available access to different broker reviews, you will not be dealing with a broker with zero clues on what you’re looking at.

Reviews from websites are usually a treasure trove of information about the broker.

Conclusion

With the advent of retail forex trading comes the emergence of retail forex brokers. You can search for thousands of brokers, and you will see how the industry is booming.As a trader, it’s your responsibility to check the broker information as thoroughly as possible. Never forgo the background check.

Finally, finding the right broker is one of the first crucial steps you’ll take if you’re serious about succeeding in the forex market.

The research found that:

• The most common assets investors hold are stocks and shares (53%), property (41%) and bonds (30%)
  • 20% of investors said they plan to increase the amount of money they have invested in real estate in 2020
  • 61% of investors believe traditional assets like property are best positioned to deliver stable and secure returns during the current political uncertainty
• Art and forex (both 19%), cryptocurrencies (17%) and classic cars (16%) were the least common investments
  • 10% of those who have invested in cryptocurrency plan to reduce their amount of investment in this asset in the new year
  • 64% of investors do not think cryptocurrencies are a safe or reliable investment
• 43% have become more socially and environmentally conscious in their financial strategies
• 42% are holding off making any major investment decisions until Brexit has been resolved

UK investors are turning to traditional assets as a result of the political uncertainty currently facing the country, new research from Butterfield Mortgages Limited (BML) has found.

The prime property mortgage provider surveyed 1,100 UK-based investors, all of whom have assets in excess of £10,000, excluding pensions, savings, SIPPs and properties they live in.

The research revealed the most common assets investors hold are stocks and shares (53%), property (41%) and bonds (30%). On the other end of the spectrum, classic cars (16%), cryptocurrencies (17%), art and forex (both 19%) ranked as the least popular.

Delving into the factors influencing their investment decisions, 61% believe traditional assets like property are best positioned to deliver stable and secure returns during this current period of political uncertainty. One in five (20%) property investors are planning to invest in more real estate in 2020.

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When it comes to non-traditional asset classes, nearly two thirds (64%) of investors surveyed by BML do not think cryptocurrencies are a safe or reliable investment. A tenth (10%) of those who have invested in cryptocurrency plan to reduce their amount of investment in this asset in the new year.

Looking into the factors influencing their financial plans for 2020, 43% of investors said they have become more socially and environmentally conscious and this will influence their financial strategy in 2020.

Brexit is also playing on investors’ minds. Two fifths (42%) are holding off making any major investment decisions until Brexit has been resolved, though half (49%) are confident in the long-term performance of UK-based assets. This compares to 23% of investors who are looking to assets based outside the UK for their investments in 2020 because of Brexit.

Alpa Bhakta, CEO of BML, said: “In this era of political uncertainty, investors are rallying towards traditional asset classes like property, which are historically resilient and able to hold their value in times of transition. The fact a significant proportion of investors are planning to increase investment into property in 2020 shows that despite Brexit, demand for real estate remains resoundingly strong.

“Interestingly, the factors influencing financial strategies are also changing–on top of security and stability, investors are also taking into account the environmental and social impact of their investments. This will evidently be an important trend over the coming years, and is something both financial services firms and advisers will need to pay attention to in 2020.”

Studies show that a large portion of forex traders fail. The problem is that most do not prepare adequately before starting their live trading activity.

You can increase your chances of becoming a successful trader by identifying the mistakes that most traders do and avoiding them. The following are some of the common mistakes that beginner forex traders do and our tips on how to avoid them.

Mistake 1: Not enough forex education

You will never trade successfully unless you invest in education. Many beginners start trading with a gambling mindset. However, successful forex trading requires an understanding of the global markets, trading strategies and technical and fundamental analysis. You need to know how to use financial information resources like Bloomberg or the Financial Times, charts and other tools.

Once you are confident with your knowledge you should test it with the help of the demo account. Demo trading is the best time to test different strategies. You should not start live trading until you identify a trading strategy that you feel comfortable with in the demo environment.

Mistake 2: No risk management plan

Forex trading is a high-risk venture, and it is therefore critical to have a risk management plan that factors in the amount of risk you are willing to take. Once you identify your risk appetite, you should identify trading tools to protect yourself against additional risk.

For example, you can implement a stop-loss to close trades when the prices hit your risk threshold. Likewise, you can have a 'take-profit' feature in place to lock in trades when your target price is reached. These are not the only risk management practices you can adopt and before you start trading you need to be aware of all important practices and how to use them to your advantage.

Mistake 3: not sticking to your risk management plan

You can have a trading strategy and a risk management plan, but you will achieve nothing unless you follow them. Remember that forex trading requires high discipline. Traders often ignore their risk plan when chasing losses or when they feel overconfident about a specific trade. You should learn to identify the urge to ignore your risk management plan as an emotional reaction and keep reminding yourself that emotions are the number one cause of wrong decision making in trading.

Mistake 4:  Choosing the wrong broker

Most novice traders assume that all brokers are equal.  This is not true. There are many factors that can differentiate one broker from the other and choosing the right broker has a huge impact on your success or failure in the trading world.

But if we can think of one factor that is simply crucial to check before choosing a broker it is the license. You should only work with forex brokers like Capex.com who have a license from top regulatory bodies. If a broker is not regulated by one of these bodies then it cannot be trusted and you should not work with them.

Bottom line

It is always good to learn from other people's mistakes and this is what we have tried to help you do in this article. We do hope that you learned the pits and falls of forex trading and that you will have the patience and discipline to avoid them.

Trading forex, especially with CFDs may involve a high risk and your potential losses when trading CFDs may be substantial.

Even though it’s early days for open banking there are already plenty of trailblazers offering new services, writes Huw Davies, CCO at Token.

From forex to rental accommodation, personal identification to loyalty schemes, many customer experiences are starting to be transformed by the effects of Europe’s Second Payment Services Directive (PSD2) just months after it was introduced.

Low-cost travel currency provision, securing a new rental flat, buying goods online and viewing your complete financial position across multiple bank accounts have all become easier thanks to third parties taking advantage of the access the regulation gives them to customer bank details to provide new services. Innovation is alive and kicking and motivation to succeed is high.

For banks, initially concerned that PSD2 would allow others to come between them and their customers, the prize comes in keeping themselves at the centre of their customers’ digital banking experience. This will allow them to continue to collect valuable transaction data that will help them cross-sell and up-sell their own products and services.

For merchants and service providers, open banking promises to remove some of the hassle – known as friction – of registering new customers, recognising existing customers and completing purchases. It could also make it easier to make targeted offers and build loyalty.

Meanwhile, fintechs are hoping that the new services they can provide, such as bank-account aggregation, will capture the public’s imagination, helping them create new businesses.

Payments

The sheer variety and success of those already operating in the payments area proves open banking’s value.

Online property portals are developing open banking services that help both landlords and tenants kick off a new tenancy faster and at a lower cost. Traditionally, the first rental payment is often made by debit card, incurring high processing fees. The alternative is to set up a Bacs payment, which can involve visiting a bank branch and filling in forms. The whole process can take up to 10 days to complete.

For landlords and tenants alike, this can be too long and there’s no guarantee that any payment will ultimately go through. Meanwhile, the landlord may have lost alternative tenants. Savvy online property marketplaces will begin using open banking to take immediate payment directly from the renter’s bank accounts by the end of the year.

This approach not only circumvents the high fees but also cuts the amount of time it takes to make that first payment from days to seconds. Down the line, we expect these portals to incorporate identity and credit checks as well as recurring monthly payments into their solutions, removing further areas of friction.

In travel money and investments, there’s also plenty of activity. Caxton, for example, aims to remove the pain points associated with registering for and using a pre-loaded foreign-exchange card. These include high fees, delays in clearing the first payment from the customer’s bank account and the need to log into both bank and forex provider. Like the property portals, forex providers can take immediate payment directly from bank accounts, cutting the cost and closing the time gap from registration to live accounts.

Online investment services are also looking to offer similar services to streamline account setup and moving funds.

In all these areas, open banking is cutting the hassle and increasing automation, helping to bring down costs and improve the customer experience.

The scope of these services can and will be broadened out as open banking payment services take off and the simple use cases are proven. Expect to see recurring and bulk-payment facilities that will take the strain out of volume transactions, as well as services that offer lending on the back of payments.

Data aggregation

Allowing third-party access to bank data will open up the opportunity for far wider data aggregation than previously possible. Until now customer data was held in silos by different companies – banks, merchants and service providers. Post PSD2, those silos can be connected and the data within them pooled and analysed to create a richer customer picture. This can be used to offer new, relevant services and build loyalty.

There are many fintech and banking propositions that allow customers to view all their bank accounts from different providers in one place. At present, what you can do with the service is limited to views of account information. Soon, a more advanced version will allow customers to unlock the value of these services and act on the information – make payments between accounts held at different banks to pay off an overdraft, for example, or sweep money from a zero-interest current account into a savings account. Users will even be able to set up rules-based parameters around events that will automatically trigger money movement, helping them manage their finances better.

Similarly, loyalty programmes are more effective when they know more about a customer. Many are merchant-specific – think Tesco Clubcard or Boots Advantage. When the retailer can see beyond the customer activity within their own store they can make timely and relevant offers to tempt customers away from rivals to spend more with them. It’s no surprise, then, that we’re starting to see loyalty card providers expand the range of what they collect to include bank data.

Identity and verification                   

When it comes to identity, verification and authentication, cumbersome processes create friction, which is a huge problem. Passwords are the bane of modern life. But PSD2 promises to change all that. Consent to access relevant customer bank details need only be given once so forms for a car loan, for example, could be filled in automatically by the loan provider. This not only improves the customer experience – less paperwork – but because the data is coming from the bank it has already been checked and verified so the loan can be processed quicker too.

As identification and verification services mature and develop, recurring payments and subscription facilities will be added.

Open banking is a new way of accessing financial services. While today’s offers may be limited in their functionality, their providers have clear road maps for further development. Just as with other revolutionary processes and technologies, it will take time to see how far they will go. But open banking’s capacity to reduce friction, risk and cost as well as make processes faster and more efficient means it will undoubtedly become an important part of our everyday lives. It’s over to the innovators.

Forex trading can offer an efficient way of building real wealth. However, it comes with its risks. A few mistakes can end up costing you real money, not just time and effort. Luckily, Adam Truelove, Global Trading Director at Learn to Trade, has some tips on what to avoid.

Forex trading for beginners can be fraught with dangers, but by laying out examples of what you shouldn’t do, we can hopefully make the path ahead a little safer for you. Here are some common mistakes beginners make that you should avoid, to make your trading as low risk as possible.

1. Lack of direction

It’s no secret that the Forex market can be highly unpredictable. It is vital to not confuse this ‘unpredictability’ with ‘randomness’ as many beginners do. Often people start by going on to trade as randomly as they believe the market to be. Sometimes they win, sometimes they lose, but they never learn how to do either reliably. You have to learn to react to the volatility of the market, not give into it.

So, how do you work your way through the seeming madness of it all? The first step (and most crucial) is to have a trading plan.

Another important part is learning from the losses that you’ve made in the past and why they happened. The best way to do that is to record them in a journal. By keeping tabs on every trade you make, you will start to notice where it isn’t performing as well as it should be, or other factors are influencing outcomes. Having this plan and being able to change it based on the results is vital in Forex trading.

2. Not having a stop-loss

A stop-loss is an order designed to stop you from losing too much money on any one trade. It is an essential part of Forex trading and the longer you go without it the more you leave yourself open to risk. You should decide how much you’re willing to lose on any one trade and assign your stop-loss order accordingly. Just as importantly, you should avoid moving your stop-loss order just because your instincts tell you that one trade is eventually going to be a winner. Always let your head rule your heart, and never allow your emotions to make trading decisions for you. Everyone will experience some loss when trading; but by putting in place a stop-loss you are protecting yourself from losing too much, too quickly.

3. Averaging down and selling early

Trading is not just a numbers game, it’s a game involving your own emotions and instincts. Nowhere is this clearer than in the very common mistake of averaging down. Although this error is more common in the trading of stocks and shares, it is important to understand why it is a bad idea for beginner traders.

Averaging down is the practice of adding additional funds to a trade that you’ve already invested in at a lower rate than you initially purchased. You might do this because you have already invested in a trade, and you decide that it would be best to invest more while it’s cheap, and wait for the value to go back up. This is a sunk-cost fallacy, and you may be waiting a long time for any return, missing out on more profitable opportunities in the meantime.

4. Not diversifying enough or diversifying too much

Overtrading is a very common mistake that exposes many beginners to too much risk. By doing this, you are not insulating yourself from the market, in fact, you might as well be trading randomly. You should only trade when you think you have the advantage, and ensure you always trade according to your plan. An even larger risk for beginners, is over-diversifying by trading too many positions at the one time. By doing this, you leave yourself open to market risk, making it much harder to spot which positions and trades work. This also increases your risk of trade duplication, and overlapping positions, which can effectively double your losses on a bad trade.

Trading too much of your capital is another easy mistake for people to make. By risking large amounts of capital, you are likely to lose out in the long run because you have exposed yourself greatly to market risk. By mitigating your risk you can spread out your capital. Investing a maximum 2% of your total capital loss strategy rule, protects you from losing too much too quickly, when the market works against you.

Forex trading for beginners is a long learning process. It’s best to make sure you’re doing plenty of research, taking advantage of demo accounts and learning the markets, before you start depositing real money. Through your efforts, you can make Forex much less risky.

CoinMetro is a cryptocurrency exchange that aims to make buying and selling cryptocurrency as easy as purchasing pounds, dollars and euros.

Offering a complete and supportive financial platform, CoinMetro provides an avenue for both newcomers, as well as professional and experienced currency traders to begin trading in cryptocurrency. Through a tokenized ecosystem, the trading platform supports familiar investment options such as professional asset management and ETFs, and also allows users to invest in up-and-coming Initial Coin Offerings (ICOs).

The team behind the business has years of experience in the forex industry, with CoinMetro’s sister company FXPIG. Drawing on their substantial experience developing technology for financial trading and understanding of the liquidity needs of currency markets, CoinMetro is uniquely positioned to support and understand the needs of the growing cryptocurrency space, as well as support the trading needs of investors wanting to add crypto to a diverse portfolio of new and traditional securities. To discuss all things forex and crypto, we caught up with the CEO of the company Kevin Murcko.

As a long-standing expert in forex and crypto, what would you say are the reasons behind, and the impact of Bitcoin’s price volatility?

With a relatively small circulation of coins, prices of cryptocurrencies are often affected by the actions of ‘whales’ – early investors with large stakes in specific markets. News is also a force to be reckoned with. News of countries enforcing bans of course plays out bearishly in the markets, while news of government endorsement predictably sends prices upward. Lack of regulation has also contributed to instability.

The impact of volatility has been twofold. On the one hand, rapid price fluctuations have made the space a profitable one for eagle-eyed traders. In order for anyone to make money in financial markets, there must be price movement, and the crypto markets have offered traders exactly that.

On the other hand, with a larger price bracket, comes larger levels of risk: sizeable gains on one day can be all but wiped out in the following day of trading.

Of course, a currency should ideally hold its value and be a reasonably reliable store of wealth. In this sense, extreme volatility has also tarnished the reputation of cryptocurrency as a traditional currency, and resultantly, countries are increasingly choosing to regulate crypto as an asset.

But it’s important to note that while cryptocurrencies have been volatile assets in the past, this doesn’t mean that this will always be the case in the future. In fact, some cryptocurrency developers are taking active measures to limit volatility by, for example, pegging the price of their token to that of the US dollar.

Can you tell us a bit about the history of forex regulations?  How have they affected the marketplace?

The history of FX regulation really depends on which country you’re looking at. All countries have their own independent regulatory bodies, and are typically subject to different rules.

China, for example, was late to enter the foreign exchange market and late to impose regulations. As recently as August 2016, Chinese authorities found 192 illegal banks conducting shady forex transactions valued at $30 billion. The State Administration of Foreign Exchange (SAFE) also found instances of companies evading regulations by using false information, transferring illegal assets, and evidence of money laundering via forex trading schemes.

Globally, of course, there are regulations with global ramifications. MIFID II, for instance, has caused an upheaval in FX markets this year.

The net effect of all this regulation has been to achieve what I suppose is the goal of all regulation: it’s helped the FX markets to thrive and maintained financial stability.

What can be learnt from the introduction of regulations in the forex industry?

By reflecting on how the forex industry has been shaped by regulation over the last 20 years, we can get a rough idea of how everything might play out for a decentralised international cryptocurrency marketplace.

Before Bitcoin and alternative cryptocurrencies were established in the late 2000s, the forex industry was facing radical change as the internet opened up the market to the public. New retail brokers started to appear alongside the traditional banks, providing new services and competition. As forex trading made the move online, there was an element of the ‘wild west’ culture that has also characterised the early stages of cryptocurrency. As both markets have experienced a similar introduction to the trading space, the future development of regulations for cryptocurrencies will mirror that of forex trading 10 years ago.

The current conditions in FX enforce businesses to jump through a variety of hoops - such as meeting minimum capital requirements, establishing audit requirements, and adhering to reporting and bookkeeping - before becoming a licensed forex broker. Thanks to this detailed process, regulators are able to weed out fraudulent brokers before they get to market. We expect equivalent hoops to be introduced into the cryptocurrency space. This is all likely to happen quickly, given that cryptocurrencies are now very much a mainstream financial asset.

Like the historic forex market, there’s a certain pull and push in the crypto world between the need for overt regulation and control, versus a laissez-faire approach in which a free market is allowed to regulate itself. In the case of crypto, I expect the regulated approach will win out.

Why does the crypto community need to adopt wider regulation and become part of the regulatory process?

Regulation, if done correctly, legitimises the cryptocurrency market by removing that ‘wild west’ element to it – the very same which once characterised the forex markets.

Regulation brings stability to a market often regarded as excessively volatile, and protects investors from criminal activity; given just how many fraudulent Initial Coin Offerings, cryptocurrency hacks, and fraudulent exchanges are about, this is long overdue.

Why does the crypto community need to be part of this process? For the simple reason that, if left in the hands of potentially misguided legislators, regulation could undermine the growth of this booming part of the financial services sector.

We’ve seen just how awry crypto regulation can get. Chinese policy for example, has achieved little other than to quash innovation and growth, and has simply driven cryptocurrency activities abroad.

What do you think the rest of 2018 holds for forex and crypto?

We have a rough idea of what this year holds for crypto, following on from the recent G20 meeting of finance ministers in Buenos Aires. Member nations have agreed that cryptocurrencies needed to be examined, but that more information is needed before any regulations could be proposed. While there will be further details on this in July, we do have some signs about what recommendations will be announced. Expect

- A bilateral approach to regulation, as Christine Lagarde has recommended on numerous occasions this year;

- Crypto to be treated as an asset, and not as a currency, as various financial regulators have hinted at throughout the year;

- Crypto regulation to ultimately consist of a mixture of existing rules and new rules.

Forex is more difficult to pin down at the moment, with US protectionism on the rise and the prospect of a trade war. This year, the Euro looks bearish, with the dollar’s value as the reserve currency of choice diminishing in step with uncertainty over US trade policy. Whether this will persist to the end of the year remains to be seen.

Website: www.coinmetro.com

Trading is often seen as a career path only for those with a deep understanding of the market. But the truth is we all trade. The concept of value and purchasing power is something we learn at a young age and most people haven’t yet learned that the forex market is everywhere. Here Finance Monthly hears from Benjamin Sparham, Trader at Learn to Trade, who has expert insight into the world of trading.

The richest people in the world are constantly in the know about the markets. They must ensure they’re making the most out of their money and investments.

Most of us don’t worry about things that don’t affect us directly but the economy does. It’s a complex ecosystem that’s constantly growing, therefore it’s important we know what’s going on. For example, have you ever wondered how Brexit is affecting you? Understanding the Forex markets will give you the full picture.

Here are the 3 things you didn’t know about trading.

1. Trading happens at all times

Trading is literally, as defined, “The act of buying, selling, and exchanging commodities”. Any time you buy food, you’re trading; you’re giving money to someone in exchange for food. The forex market represents an exchange in purchasing power between currencies and the exchange rate is pretty much the value of one currency reflected in another currency

For example, if the exchange rate between USD/EUR is 2:1 a H&M jumper that costs $100 in the US will cost €50 in the EU, So, when you exchange $100 and get €50, you are not losing money, you’re acquiring the same purchasing power you had, but in a different currency.

2. The forex market affects you…even if you don’t buy foreign currencies

We live in a globalised economy where no country has the power to produce everything.

In Venezuela there’s a strict currency control that limits the purchase of the USD which has caused USD prices to skyrocket. The exchange rate of USD/VEF is around 1:40,000.

If Venezuela let the currency float freely, the price rate would be approximately 1:10. The massive devaluation of the VEF leaves prices growing rapidly which has badly affected the wallets of their citizens.

Since individual countries cannot produce everything, most companies import some of their materials to make their products available. Think iPhones, cars and food brands. As a result, the increase and decrease of prices in the forex market means that these imports can also become more or less expensive.

Going back to Venezuela, with the USD prices growing, any company importing their items will need to sell them at a higher rate than before, which causes inflation and badly affects their citizens.

If you have ever bought anything from the internet, then you’ve probably used the forex market. Online sellers get paid in their particular currency, so the value of that currency will affect the price you pay.

3. How the world develops, politically or economically, will affect you

Most people worry only about news and political events that affect them. However, every election, every separation, every merger, and any referendum does affect you. Economic and political stability shapes the health of any currency.

Look at the GBP performance after the Brexit referendum; shortly after the surprise results that led to David Cameron quitting his job as Prime Minister, the market started getting more and more volatile (higher volatility, higher price swings). That is because the British market was filled with unknowns about the future of the nation. 64 million people will, potentially, lose access to a 500 million people market in 2 years if nothing is agreed.

A lot of British citizens didn’t mind that fact, but the market did care. The interest rates that your bank account pays, the goods you buy, the petrol you put in the car, even the cost of your services all depends on the strength of the British pound. Let’s break it down in simple terms, so you see it.

The value of the pound fell to a low not seen in over three decades after the referendum. The pound fell 20% against the US dollar and since then it has regained most of the losses with prices now at almost pre-Brexit levels. This shows the size of swings the market can make and of course, this creates trading opportunities. ”That means that anything the nation imports (like warm weather vegetables) will be roughly 13% more expensive. So, that increases inflation and lowers your disposable income.

And your bank account? A large part of the interest rate banks pay on savings accounts come from said banks trading in the forex market. Consequently, just the fact of having a bank account means you are a forex holder since you benefit from the profits the bank made from trading currency.

So next time you read the news, keep an eye on the economic indicators, they influence your life more than what you think they do.

2018 is the year you make more money. It’s one of your New Year’s resolutions – but you’ve got no idea where to start. You’ve done the research, read as much as you can, and are suffering from a serious case of paralysis by analysis. With so many options to choose from, it’s understandable that doing nothing at all seems like the easiest option. It’s also the worst. Below Jitan Solanki, Senior Trader at Learn to Trade, sheds light on your options for the year ahead.

So, where exactly should you invest your money this year? Read on to find out more about the pros and cons of different investments and make 2018 the year your money works harder.

ISAs

The beauty of cash ISAs is that you do not pay tax on the interest you earn. However, today, basic rate taxpayers can earn £1,000 in savings interest a year, and higher taxpayers can earn £500 – so ISAs are no longer quite as attractive.

Indeed, a standard ISA only offers one – two% interest per year. Even a stocks and shares ISA that can offer 13-14% per year typically incurs a 6p to every £1 charge. This eats away at margins and, when you factor in inflation – at its highest level for half a decade – not only is money not growing, it’s actually decreasing in value.

Cryptocurrency

Unless you’ve been living under a rock, you will have seen the hype surrounding cryptocurrency, the decentralised virtual form of money that can be used to make purchases or be exchanged for other traditional and digital currencies. VeChain (VEN) is one of the hottest new cryptocurrencies around, having struck major deals with Renault, PwC and Fanghuwang, one of the fastest growing online lending platforms in China. Another that you may have heard of, Ripple, is also one to watch as it announced partnerships with American Express and Santander. When considering an investment in cryptocurrencies, the focus now has to be on identifying which coins offer the best technology and are most likely to be used by everyday people in the future – that will be where the value is.

Now that the hype around bitcoin has somewhat subsided, there are good opportunities for those with longer-term ambitions. However, cryptocurrencies are a highly speculative investment without government regulation so investors are warned to tread carefully. It remains to be seen how the crypto craze will play out, but whatever happens, ensure you research thoroughly before making any investments.

Stocks and Bonds

If you’re happy to tie up your money for a number of years, some of your investment options include: bonds, investing money into managed funds, and directly trading stocks, shares and commodities. A fixed rate bond with NS&I might be worth considering, if you’re willing to put away savings for three years, as it guarantees a 2.2% a year growth bond with no risk but is unfortunately taxable. Premium bonds, while not guaranteed, do offer savers the chance to win tax-free prizes between £25 and £1m.

In terms of stock, investment returns and risks for both types – common and preferred – vary depending on factors such as the economy, political scene and the company’s performance. In the short-term, this form of investment is volatile and choosing stocks requires substantial research. There are also a lot of hidden fees and a lack of transparency involved when buying and selling stocks. This said, we’d call out the Hang Seng 50 index as one market that remains a strong core focus for us. This has been on a radar for over a year now when new Shanghai Stock Exchange to Hong Kong Stock Exchange link launched. We continue to see outflows from mainland China into Hong Kong and continue to trade the trend.

Forex Trading

As it stands, by far the most lucrative choice – and one that manages the risk – is forex trading (the trading of currencies), turning over $5.3 trillion annually. Return on investment is typically four% per month on average, which equates to roughly a 60% increase on starting balance after one year.

The British Pound, which has benefitted greatly from open talks between UK and European ministers surrounding Brexit, and the Japanese Yen – weak due to changes in the Bank of Japan’s personnel and upcoming elections – are, currently, a highly effective pairing.

Though it’s hard to argue with the returns above, there is always risk involved. However, while trading does demand a disciplined mindset, as long as you stick to some simple rules you can largely mitigate risk and start to see consistent returns.

The best thing you can do this year is spend some time getting familiar with each of your investment options, understand the pros and cons of forex trading, ISAs, stocks and bonds, and new kid on the block, cryptocurrency, and make 2018 the year you see a return on your investment.