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- Access to Trade360’s web trader and start trading.
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What you can invest on Trade360’s platforms?
By registering with Trade360 for free, you can get access to all of their trading platforms and tools, and invest in various financial markets including Forex, CFDs and Stocks.
1. Forex currency pairs
Forex is the key that opens the door to a market that trades 6 trillion dollars a day: in a nutshell, you will be able to experience the world of trading!
When trading forex, we actually speculate on the relative values of two currency pairs: each currency pair is represented by 6 letters, made up of the 3 letters of each of the currencies being traded (EURUSD, for example).
One of these three letters, the base currency (the euro in the previous case), is the one that lends the basic unit to the pair; the other, the quote currency(the US dollar in the previous case), is the one that gives value to the pair.
Therefore, the value of the currency pair represents the number of units of quoted currency required to change a single unit of base currency.
If the value of the EURUSD is 1.1046, then 1 EUR equals 1.1046 USD.
The eight major currencies used in international trade are the US dollar (USD), the euro (EUR), the Japanese yen (JPY), the British pound (GBP), the Canadian dollar (CAD), the Australian dollar ( AUD) and the New Zealand dollar (NZD).
The Chinese yuan is not mentioned, as it does not have a floating exchange rate, but is pegged to the dollar and manipulated by the government.
Major currency pairs consist of one of the eight pairs mentioned above and the US dollar (the latter as a quote currency, except against the yen).
Since these represent the most frequently traded pairs, their liquidity is usually higher and their spread (cost of operation) is usually lower.
How does Forex trading work on Trade360?
As we have already said, trading forex or currencies involves speculating on the evolution of the price of a currency pair, which is the instrument that records the relative value between two currencies.
The value of each currency depends on supply and demand.
This last factor is regulated by the central bank of the relevant country through the printing and circulation of currency, on the one hand.
In addition, central banks determine the interest rates at which commercial banks can deposit or lend central bank funds.
Both factors are two of the main tools used by central banks to manage the monetary policy of their respective country.
Thus, a central bank can also indirectly influence a country’s economy: for example, by lowering interest rates, companies can access “cheap” money to develop their activities and generate more jobs.
On the other hand, when printing money, inflation is generated, which devalues the currency and decreases the ease of access to the retail market for people and, consequently, the economy falls.
Consequently, a forex trader would do well to be familiar with current affairs and economic (and political) news.
Furthermore, markets are subject to market cycles and cycles of individual behavior, allowing them to be examined from the point of view of past behavior.
Since markets are made up of individuals, their instincts, fears and greed, very evident in the human being, also dictate the behavior of the market.
This gives rise to the emergence of technical schools of analysis that ignore the aforementioned fundamentals rather than their results.
Be that as it may, to understand how forex or currency trading works, it is not enough to open and add funds to an account and then press buy and sell buttons blindly.
If you want to do things well, you must know what moves the markets and know how to apply your knowledge according to their behaviors.
2. CFDs (Contract for Differences)
CFD trading offers investors and traders the opportunity to profit from an asset’s price movements without having to own the asset itself.
Both novice traders and traders unfamiliar with this instrument often wonder what CFDs are and how they work.
The answer, while somewhat technical, is very straightforward: as an investor or trader, you can open a position on any asset, regardless of the current price point, such as gold, which is trading at $ 1735.50.
At this point, your broker will give you two options: either back the asset (which means that it believes the price will increase at the end of the selected period) or shorten it (which means that it believes that this asset will lose value).
Suppose you have opened a position on the increase in the value of gold.
When you close the position, you will lose if the value of the asset decreases or you will gain if it increases and exceeds the spread.
How to analyse CFD markets to trade efficiently?
Because CFD markets are so diverse and vary from broker to broker, some brokers offer a multitude of stocks, while others focus on currency pairs, and others span the entire spectrum of assets (from Adidas stocks to foreign currency pair). Yuan-AUD, for example).
CFD indicators must be equally versatile in their ability to estimate and predict results.
To this end, the indicators are highly varied, each focusing on a slightly different method of using past results and charting a feasible pattern for the future.
The moving average can be used to identify directions of the price trend.
The MACDtakes two moving averages and compares them to each other.
If there is a divergence, it indicates a slowdown in the market; Instead, if there is a convergence, it probably means that the market itself is preparing to reverse.
The Bollinger bands are most useful when the assets listed outside their normal levels.
The tighter the two bands are, the lower the volatility of the asset in question.
These are just some of the popular indicators that can be used when trading CFDs.
There are many more and each of them has a specific purpose and focuses on an area in which it works optimally.
How to trade CFDs with Trade360?
The basic concept of fundamental stock analysis is fairly easy to understand: first, you look at the state of the economy as a whole followed by the strength of the relevant sector; then, it focuses on the company in an attempt to determine whether the current price of a stock is overvalued or undervalued, or if the stock is “reasonably” priced.
In the case of most stocks, this can be achieved by checking a multitude of data, such as reports of a company’s income, market value, growth plans, dividends, etc., which can be seen in the account statements of the company.
With that information, a trader or any other entity can evaluate potential changes in the prices of a stock before they occur or correctly estimate the market reaction to the publication of a report.
When studying a stock to identify potential moves, traders should consider most of the following factors:
- Debt ratio
- Gross sales
- Total return for shareholders
- Return on equity
- Capital return
You should also take into account other indicators that you think may serve you, as they are the easiest answer to the question: how to trade CFDs on stocks?
3. ETFs (Exchange-Traded Funds)
An exchange-traded fund (ETF) is a set of funds invested in a set of assets in which, like stocks, can be invested through an exchange market.
1. Sector ETFs
Sector ETFs look at a specific market sector, investing in stocks of companies in a given sector, tracking related indices, etc.
For example, the XLV Health Care Select Sector SPDR fund focuses on the health sector and offers shares of Johnson & Johnson (10%), Pfizer (5.5%), Medtronic (3.4%) and others, but all of them are from the health sector.
2. Dividend ETFs
The goal of a dividend ETF is to provide regular high returns by investing in high-yielding securities, regardless of the sector or type of instrument.
An example is the VYMI Vanguard International High Dividend Yield Index fund that offers yields of 5 (YTD).
It is primarily focused on financial services and its holdings include Taiwan Semiconductors (3%), Toyota (1.9%), HSBC Holdings (1.3%), BP (0.99%) and others.
In the former case, stocks also make up the bulk of assets, although 0.02% is focused on bonds.
3. Style Based ETFs
Rather than focusing on one market segment or instrument type, style-based ETFs are characterized by the investment style that the manager adopts.
They can focus on style versus growth, capitalization size, low/high risk, etc.
These ETFs are optimal diversification instruments.
The IWM focuses on small-cap stocks in the Russel-2000 index and includes stocks of small-market cap group companies.
4. Commodity ETFs
For example, iShares’ IXC Global Energy ETF owns shares in energy sector companies such as Exxon Mobil (13%), Royal Dutch Shell (8.5%) and others.
5. Forex ETFs
They allow exposure to a particular currency pair that can be traded with spot transactions, investments in relevant government Treasuries, and currency-based derivatives.
The ProShares UltraShort Euro (EUO) Forex ETF, for example, includes about 20% of Goldman Sachs EURUSD forwards, 45% of UBS, and the remaining 35% of other cash assets.
6. Bond ETFs
Bond ETFs invest in government and corporate bonds.
The main advantage of these is that fund managers will use a set of investment strategies (including early closing when possible) and different expiration dates to maximize regular returns.
The iShares TIPS Bond ETF holds a variety of US Treasury bills with different face values and maturities.
What are ETFs and why many invest in them?
An ETF is an investment fund that is typically managed by a financial services firm (brokerage, investment bank, insurance company, etc.) that owns assets, such as stocks, commodities, and derivatives, and is incorporated as corporation or trust.
The fund manager divides the ownership of these assets into shares and offers them through a regulated market. The shares entitle the shareholder to receive dividends or other forms of profit, and can be traded through an exchange or an over-the-counter market.
ETFs are typically characterized by the type of investment they focus on, such as an index, sector, or region (currency), real estate, bonds and other fixed income stocks, commodities of a type or other, etc.
The advantage of investing in an ETF is the ability to concentrate a wide spectrum of investment types (different asset classes and instrument types) related under a single definable umbrella (sector, objective or investment type).
They are also relatively cheap to trade (for their low fees) and are often more tax efficient than the assets they cover.
The first ETFs were born in the late 1980s as a means of tracking stock indices.
A decade later, the first sector ETFs appeared, each covering a different sector of the S&P 500.
Today, there are more than 2,000 ETFs listed in the US alone.
They are also relatively cheap to trade (for their low fees) and are often more tax efficient than the assets they cover.
The first ETFs were born in the late 1980s as a means of tracking stock indices.
Differences between ETFs and Mutual Funds
Unlike exchange-traded funds, which, as mentioned above, are managed passively, mutual funds can also be more actively managed by the fund manager.
In other words, the components can be reordered and traded on a regular basis.
They are generally much cheaper to trade, have lower associated costs and tighter spreads, and carry a lower minimum investment level.
Also, because mutual funds are actively managed, they involve a higher volume of asset transactions, which means that taxes on capital gains are higher.
Finally, mutual funds are traded at the end of the day and often based on the orders received during the day.
ETFs, on the other hand, They are traded throughout the day and your transactions can be subject to various orders, such as limit orders, stop orders and many more.
However, several ETFs charge a commission on ETF transactions executed during a day.
Stocks are a way to invest in a company by buying a stake in its property.
The more shares (or stakes) you have, the greater your profit will be when the company appreciates.
It is not always enough to ask “what are stocks?” As the options are wide and varied, like the companies they represent.
You can buy stocks in tech companies like Apple or Amazon, large companies like Walmart or Procter & Gamble, banks like JPMorgan Chase & Co, or even energy companies like Chevron.
As long as companies adhere to financial rules, they can “create” certain types of stocks.
Common shares are, as the name suggests, the most common and anyone can buy them, assuming they have enough capital to pay for them.
Usually common stocksprovide certain voting rights over company decisions; Most important, however, they include a share of the company’s profit (or loss).
You can also purchase preferred shares , which typically offer higher returns that are, in turn, often fixed and guaranteed.
These stocks also tend to suffer less volatility.
The reason they are called ” preferred ” is that, since the shareholder does not have the right to vote, he is not held liable for the bankruptcy of the company.
In the event of bankruptcy, preferred shareholders are considered debt holders and are remunerated with the assets of the company before common shareholders.
How to trade Stocks (Shares) with Trade360?
Now that you know what stocks are, you are probably asking yourself the following question: How do I trade stocks?In strictly technical terms, it is quite simple, at least today.
With the advancement of technology and the opening of most of the international exchanges, anyone can buy shares of any company from anywhere in the world.
All you need is an internet connection, an account with an online broker and enough money, of course.
But that’s not the question at hand, because if it were, you wouldn’t need a “how to buy stocks for beginners” guide.
The trick to being successful when trading any stock is learning to read the market and be in tune with all the moves, successes and failures of the relevant company and its market sector.
For example, if a report is to be published showing that more and more people are buying household items online, it’s great for Amazon stocks, so having it would be nice.
But of course there are also downsides.
5. Stock Indices
Indices are the measure of the stock markets that is derived from leading stocks.
When measuring the median value of the leading stocks on a stock market, any index also measures and indicates the strength of an economy as a whole.
Stock indices represent a benchmark against which a stock’s performance can be measured.
However, the index itself is not a tradable asset.
Instead, you can invest in a derivative (a fund, an option, or a future) that tracks the value of the index.
But first of all, you need to fully understand what an index is.
1. DAX 30
The DAX 30 is a capitalization weighted index that measures the value of the top 30 companies listed on the Frankfurt Stock Exchange and is owned by Deutsche Börse AG, a publicly traded company.
Covering an exchange that was created in the 11th century, the first averages were calculated in 1625.
Also, Frankfurt was one of the first exchanges to enable electronic trading (in 1969).
The selection is based on the size of the company and is reviewed annually.
The DAX is unique in that it updates after its close to show futures prices.
2. Dow Jones
The forerunner of all indices, the Dow Jones Industrial Average, is the second oldest, second only to the Dow Jones Transportation Average, the first of which was published in 1896 by the Wall Street Journal, which in turn was created by Charles Dow, Edward Jones, and Charles Bergstresser.
Dow himself selected the companies to include in the first average, that of 1885.
Now, this task is delegated to a panel of “experts” based on a wide range of previously unknown parameters.
The values of the 30 participating stocks are divided by a fixed divisor (currently 0.45798) which is then adjusted to include stock splits, spin-offs, etc.
The shares are obtained from companies listed on the New York Stock Exchange (owned by Intercontinental Exchange / Euronext) and the NASDAQ (owned by the Swedish Wallenberg family).
Despite its name, the Dow Jones Industrial Average is no longer limited to heavy industry per see.
Currently, the Dow Jones is operated by S&P Dow Jones Indices, which is, in turn, a joint subsidiary that includes CME Group, News Corp, and S&P Global, owned by McGraw Hill Publishing.
3. S&P 500
The Standards & Poor’s 500 is a free float capitalization weighted index.
This means that the value of each average determining share is defined by the market capitalization of the company and the number of outstanding shares held by the general public (excluding those owned by members of the company and the government).
Shares of the 500 companies are chosen from among all U.S. stock exchanges by a committee that considers a variety of factors including, but not limited to, market capitalization, liquidity, financial viability, business tenure, currency prominence, and the sector.
The index is published by Standards & Poor’s, a credit rating agency formed after the merger of Poor’s Publishing and Standard Statistics in 1941, now owned by S&P Dow Jones Indices.
The Nikkei 225 is a price-weighted index that measures the performance of the Tokyo Stock Exchange.
Nihon Keizai Shimbun, the world’s largest financial newspaper, has been calculating this since 1950.
The components of the index are selected based on the liquidity of the company and the desire to balance 34 major sectors, including but not limited to , the food, pharmaceuticals, shipbuilding, banking, warehousing, communications sectors.
They are then reviewed once a year and poorly performing stocks are replaced with better performing stocks.
To calculate the index, each of the 225 stocks included is measured relative to its share price and a fixed divisor.
How are Stock Indices calculated?
Different indices are defined in different ways.
They are based on two main parameters: how the value of measured stocks is selected and how the average is obtained.
The composition of the shares of an index can be determined based on the market capitalization of a company or the value of its shares, as well as the sole discretion of a committee.
Once those stocks are selected, the value of the index can be calculated based on a simple or weighted average, for example.
Now that we understand what indexes are, let’s look at some of them.
A raw material is a physical asset that satisfies a need, is produced in substantial quantities, and is expendable (that is, its individual units are completely interchangeable).
Raw materials are divided into two main categories: hard and soft, each with its own subdivisions.
Hard raw materials are those that are extracted from the earth, such as products from mining (metals, oil, etc.), for example.
Soft raw materialsare those that are grown and are mainly agricultural products, including livestock.
Separated into categories, raw materials can be metals, energy, livestock and meat, and agricultural products (cultivated products).
In order to be able to operate with them, these raw materials must satisfy a series of characteristics that determines, in general, a commodity exchange where the relevant raw material is operated.
These characteristics are established to allow large-scale production and distribution based on a single quoted price.
Thus, for example, the gold that is traded on the Shanghai Gold Exchange, the London Metal Exchange and the COMEX (the US Commodities Exchange based in New York), must be 95% pure and its price is quoted in dollars for 1 troy ounce.
Therefore, Every tradable gold bar will be the same no matter where it was created or traded, or at least its price with reference to it.
Oil is mainly traded according to 2 benchmarks: West Texas Intermediate, for most US products, and Brent, for North Sea oil fields.
WTI, as traded on the NYMEX (the New York Mercantile Exchange), for example, is light (between 37 and 42 degrees of API gravity) and sweet (less than 0.42% sulfur content).
How to start trading Commodities with Trade360?
Few operators invest in physical raw materials.
Unless they are directly related to the supply chain in one way or another, storage and transportation expenses can be quite inhibiting.
However, since raw materials exist (they are prehistoric), there are also contracts to exchange them.
The first options contract is said to have been created by Thales, a person from Ancient Greece who bought an option from an olive press in the country.
Tulip futures were the first case of a market bubble burst.
What they had in common was protecting the interests of producers and businesses against natural disasters, excesses, etc. setting prices in advance.
In fact, the current situation is such that gold, for example, you have a leverage of $ 200-300 in contractual derivatives for every $ 1 of existing physical gold.
CFDs (contracts for difference) are the latest innovation in this regard.
They are a kind of swap contract that was created in the real estate market at the end of the 20th century.
Since then, they have become one of the most popular types of derivatives that are mainly traded by retail traders who trade over-the-counter markets through brokers with an international presence.
They are easy to understand (the profit / loss ratio is the difference between the opening and closing prices of the contracted asset) and relatively cheap (the cost of the transaction is generally covered by the opening / closing spread.).