Posted in: Tips and tricks

Trading Oil

Trading Oil: 3 simple steps to recognise a trading opportunity

Trading Oil

Trading Oil

 

Hi guys, welcome to today’s blog. In this blog we are going to talk about on how you can recognise a opportunity to  make money on trading oil

Trading Oil Step 1: Recognise the market condition

When you are trading as with many other traders, you would want to maximize your profit. For every dollar that you invest you want gain as much as possible right? In order to do this you will need a broker that gives you leverage or provide you tools such as options or CFDs. Many brokers like Plus500, Instaforex and Markets.com gives you the opportunity to maximize your profit on every pound you invest. These brokers mentioned gives you the ability to make a trading in oil. Keep in mind that not all brokers gives you the ability to make a trade in oil. So now let’s go to oil.




When you look at the oil chart (above), the first thing you need to do is to determine the current trend of oil. There are three kinds of trends.

Up trend

Up trend is also often called Bullish trend. In a Up trend Oil price goes higher and higher after every small downgrade in prize. You can recognise a up trend by the following: each cycles their top goes higher then the previous cycle. And the bottom of each cycle goes up as well.

Sideways Trend

In this situation each prize cycle doesn’t show much of a price difference each cycle. Therefore its better not trade in this situation because the risk reward ratio is too small.

Down Trend

In a down trend the price cycle of for example oil is going lower after each cycle. For example oil price today is 48 usd. Yesterday it was 52 usd  and the day before yesterday oil price was 56 usd. The down trend is often called as bearish trend.

For more information on trends you can read here: Trend Lines

 

Trading Oil step 2

The next step in making money with trading oil is recognise a entry point to the trade. For most people this is difficult because they don’t determine the market condition first.  Once you have recognise the market trend. Its very easy to determine the price point for you to invest in the trade. All you need to do is buy at the point when you think the next cycle will start. Often the best point to buy is the ”corners” under normal market condition.

Trading Oil Step 3

In this final step you are going to determine what your exit point (selling pirce) is and decide if it is worth to make a trade. So how to determine your exit point of your trade? Just take a look at the market cycles. For me the best way to exit a trade is by taking my profits before the price reach to a next key turning point( corners). Because if I wait till after the “corner” point then there is a good chance that I will lose my profit because the price trend might change. There is a big chance that it goes into the opposite direction of what I wanted. Therefore it is better take my profit before the price at that key turning point price level.

When you have determine what you entry point ( investing price point level) and what your exit point is. That way you can see what your potential profit is. If the profit potential is too small then don’t trade. And if the potential profit is big then start a trade. Al right guys hope this have helped you a better understanding in trading. If there are any question please post it in the comment section. I will get too it as soon as possible. Have a series of successful trades ladies and gentlemen.

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CFD broker

CFD trading cost: How to calculate it in simple steps

Hi all,

In this third part of the online CFD course we are going to explain what the CFD trading cost are. The first part was all about what a CFD is and what the advantages were from using CFD. The second part of the online CFD course was about how you could make money with CFD trading. If you want to read part one and part two then click on the two links below.

Part 1 of the online CFD course: CFD is one of the greatest investment instrument for trading

Part 2 of the online CFD course: How to make money on CFD trading in a simple way

CFD Trading Cost: Kinds of cost

Before you are placing a CFD there some CFD trading cost that you should consider. At most CFD Brokers you will have to pay a commission fee, spread cost and a holding cost (if you are holding a CFD position longer then one day). However at Plus500, they only charge you the spread cost and a holding cost ( if you are the CFD buyer and if you are the CFD Seller you would receive a interest).

CFD trading cost of commission

When a CFD broker charge you a commission for each trade it will always consist out of the part. The first part of the commission is the minimum fixed commission price which is usually between 7 -9 pounds. And the second part of the commission consist a percentage of a trading value. So basically the higher the transaction trading value is the more commission you pay. Luckily there are some brokers  such as Plus500 and Markets.com that doesn’t charge these kinds of commission. If you want to know more about these two brokers then you can check them at our brokers review.

Spread cost

When you are  buying  and selling CFDs immediately, the spread amounts to the difference between what you paid and what you receive. If you sell share-based CFDs, you will receive interest. So basically when you begin CFD trading you will notice that the transaction fees is always related to your trade. A part of the CFD trading cost is called a spread cost which is the difference between the bid/buy price and ask/selling price.

Example:

Let’s say you want to trade in forex and that the spread is 2 pip. So which this means is that you transaction fee is 0,0002 cent per traded unit. If you are trading GBP/EURO with 100 pounds and a leverage of 1:200, your transaction fee will be ( 100 x 200 x 0,0002)= just 4 pounds.

Overnight cost

Unlike trading options CFD’s doesn’t have a expiration date. You can hold most of your CFD’s position overnight, weeks or months. However when  you hold a position overnight you will be charged interest. This interest is really small but you get charged for it because when you hold a CFD position overnight it will be seen as an investment that has been made with borrowed money. So in this case your broker(lender) have to charge you a little interest.

Example:

Let’s say you want to buy Starbucks CFD shares at a price of 50 pound a share with a transaction value of 10.000 pounds and you have a leverage of 1:20. With this leverage of 1:20 you will have to use only 500 pounds of your money instead of 10.000 pounds instantly. And you will hold this position for 10 days and sell those at 60 pounds per share.

So what would be your profit after deducting the CFD trading cost?

Initial trading value was £10.000,- which equals 200 Starbucks CFD shares.

Final trading value (after you have sold your position) is (£60,-x 200 Starbucks CFD shares)= £12.000,-

CFD trading cost = spread opening + spread closing + overnight cost.

spread opening cost= £20,-

spread closing cost= £20,-

overnight cost= the interest rate at most brokers is usually the Libore interest + 2,5%. Let say that the libor in this case was 2,5%. So the total interest rate for a overnight position in total is 5%. The overnight cost will be £10.000 (transaction value) x 5% (interest per night)/365 days= £1,36

The total overnight cost for holding it for ten nights will be £1,36 x 10= £13,69

In this case your net profit will be £12.000 – £10.000 -£ 20 -£20 -£13,69 = £1.946,31

So your return on the investment on CFD trading with only £500 pounds is nearly 400%!

Now your CFD trading cost could be more if the broker also charged you a commission on each transaction that you have made. Fortunately there are a few brokers that don’t charge commissions. One of them is Plus500. If you have any questions regarding this topic, please post them in the comment section below and we will answer it as soon as possible.

Read more about CFD Trading: How to make money with CFD Trading

volkswagen shares

Volkswagen shares: Time to buy or not…

In this article we are going to discuss whether it is time to buy Volkswagen shares. We will outline the pro’s and cons of buying Volkswagen shares. After reading this article you can make your own decision whether you should start in Volkswagen shares or not.

What have happened to Volkswagen shares?

The American authorities caught Volkswagen cheating on the pollution test. Volkswagen had software that was able to sense when a vehicle was being tested for a pollution test. The software sensed that based on the position of the steering wheel, vehicle speed, the duration of the engine’s operation and barometric pressure. With this software Volkswagen diesel cars produce less pollution on the test while in the reality they produce more. Since the American Authorities have found that out the Volkswagen share prices have been dropping significantly. At the lowest point Volkswagen share had lost more then halve of its stock value.

Reasons to buy Volkswagen shares

Here are few reasons why you should consider investing in Volkswagen shares:

  1. The share price is really cheap
  2. The management of Volkswagen is working really hard to survive this crisis

Reasons not to buy Volkswagen shares

  1. The current Volkswagen share price is only a technically recovery from the crash.
  2. Volkswagen might receive such a huge penalties that it will be almost impossible for the company to stay profitable.

My thought

Currently is impossible for me to find solid grounding reasons to start investing in Volkswagen shares for the long-term like I have with Starbucks. With Starbucks shares I have good grounding reason to invest it for the long-term. In lesser than a year my Starbucks shares almost doubled in value. I think at this moment the only way to get profit from Volkswagen shares is by trading it. At the moment of writing this blog the current value of Volkswagen share is 103.70 Euro. I think this could be a price pivot point where the share will drop in price again.

If you are looking at the chart of Volkswagen shares, you will see that (according to our technical analysis) Volkswagen shares are still in a downtrend. Every technical analysis indicator such as the trend lines, horizontals, support and resistant lines are indicating that Volkswagen shares are in a downtrend.

Volkswagen shares downtrend

Volkswagen shares downtrend

 

So if you are shorting Volkswagen shares there is a good chance that you will be profitable soon. But don’t expect a huge decline. I think that the Volkswagen shares won’t go under the share price 100 Euro unless Volkswagen had cheated in Europe as well. If you own Volkswagen shares then keep it and don’t sell. Buy a few put options of Volkswagen to protect you portfolio. And if you want to make money with Volkswagen shares then start trading in Volkswagen cfds shares. By trading in Volkswagen CFDS shares you can make a lot of money with a small amount of cash investing. If you are interested in making money by trading CFDS then read this article : 1019 EURO profit with a invest amount of 400 EURO

cfds dividends

CFDs Dividends – How does it work? Find it out here

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CFDs dividends. Did you know that you could get dividends that are paid on shares with CFDs? It is really simple. In this article you will get to know when to invest in cfd’s to get the dividends. And you will find out how the dividends dates will  influences your CFDs dividends position. If you don’t what CFDs are then please read this: CFDs.

CFDs dividends: How does it work?

Before we are going into CFDs dividends let’s check out how the dividends payments work on shares. When you own shares there are three important dates that you must know and remember for the dividend pay out. The first date is called ex-dividend date. If you bought shares before the ex-dividend date then you are entitled to get the dividend. However if you buy shares on the ex-dividend date or after then you are not entitled to receive the dividend.

The second date is called the record date. This date record last three days right after the ex-dividend date. In this period the investor must held their stock position in order to get the dividend. The reason for this is that it takes three days to settle the purchase of shares. The third date is the payment date. Its a fixed date where the company will pay the dividend to their shareholders. Usually this date takes after 2-3 weeks after the record date.

So how does the dividend payments works when you are having cfds dividends on these shares? Let’s say you are trading in these CFDs dividends of a certain share. Now you probably know that there are various charges and credits when you have open a cfd position. The dividend adjustments is one of these credits. Typically, the actual dividend payment made by a company is usually made a few weeks after the ex-dividend date. For instance, XYZ Company might go ex-dividend on the 3rd August but pays the dividend money on the 3th of September, however when owning a CFD dividends position for this period you’ll be credited the dividend on the following business day. Great isn’t? Well it is just one of the advantages of trading in CFDs dividends shares.

CFDs dividends: The influence on price changing

When you hold a long position in CFDs dividends shares, and held it the day before the ex dividend date, then you become entitled to receive a payment equivalent to the amount of the dividend. Remember that you must be in the position before the ex-dividend date to receive the dividend. For instance if the share you controlled through a CFD went ex-dividend on Wednesday, then you will need to have bought these CFDs dividends shares at least on Tuesday to earn the dividend credit.

If you are shorting the CFDs dividends shares then the  situation will be different as you now owe the equivalent of the dividend, and it will be debited to your account. Holding a short position is good in one way, because you get paid interest instead of paying interest on the margin as you do when you are long, but this is one place where you have an immediate apparent loss.Thus, if you are short selling a share or other securities (i.e. standing to gain from the position if the share price falls in value) and you are short prior to the ex-dividend date, then you will owe the dividend.

However the situation is not so clear in reality as it is described above. The reason for this is that  you must also consider is that the share price will change on the ex dividend date to reflect the amount of the dividend, more or less (although some traders make use of a dividend trading strategy to exploit market inefficiencies). On the ex dividend date you can expect the value of the shares to drop by nearly as much as the amount of the dividend, which maintains a level equity for the conventional shareholder.What this means in  is that your long CFDs dividends position might take a hit, even while you are receiving funds for the dividend amount. The short position will make a profit which offsets the dividend debit to your account.

Read more about CFD Trading: How to make money with CFD Trading

bitcoin-value-trading

Bitcoin value aiming for new heights

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It’s has been a while that we have heard of the Bitcoin. Since its all high-ranking peek of $1124.76, the Bitcoin value have mainly dropped down in price. However since the begin of June the Bitcoin value have been increased by 10% so far. In this article we are going to look to see if it is time to trade or invest in Bitcoins again.

Bitcoin value can go up this year

There is a good chance that the Bitcoin Value can go up nicely this year. And here is why.

 

  1. Regulators

This year 2015 , Bitcoin is getting regulated by the US. In early may 2015 the first Bitcoin Regulated exchange ITBIt.  Many US states are legalizing Bitcoins to help the start-up companies that related to Bitcoin in their region.In Europe the EU and the Bank of England are investigating on how to integrate crypto currencies like the Bitcoin can be integrated in the financial system. In Spain and in Switzerland Bitcoins are exempt from VAT taxes, which make the Bitcoin more attractive. (sources : yahoo finance)

 

  1. Bitcoin related companies

More and more Bitcoin related start up companies are coming up and many investors are funding them. One these investors is Goldman Sachs. Goldman Sachs invested this year $50 million in a Bitcoin related start up company. Which is surprising to me. I thought all banks were against bitcoins. Goldman Sachs is not the only bank that has invested in a bitcoin company. Big banks all over the world are considering investing in bitcoin companies.

 

Bitcoin Value on the markets

How is the Bitcoin performing on the markets? The Bitcoin value have been increasing since Febuary 2015. As you can see in the graph below the bitcoin is setting a new higher as it has broken his horizontal resistance level of 11 March 2015. Currently Bitcoin value was 310 dollars when writing this article.

bitcoin value trading

bitcoin value trading

 

As you may have notice the bitcoin value began to rise in June. There are several reasons of why the bitcoin started to grow in value.

  1. It’s around that time when many US states were officially legalizing the bitcoin.
  2. Turmoil in Greece and China caused currency investor to invest in something that can increase in value like gold or bitcoins.

The possible Grexit situation could make big and small companies realize that it might be better to have bitcoin as a spare currency in countries that have financial problems. So that when a bank doesn’t supply money, the companies can still do business.

 

Conclusion

In short term Bitcoin value will go up, as long there is an uncertainty of Greece. For long-term is starts to look good for the bitcoin value. More and more US states is legalizing regulating on the bitcoin. And many bitcoin related start up companie are coming up all over the world. These companies where investors pour in millions of millions dollar will promote bitcoin heavily to the general consumers. It’s probably smart go for the short term first by trading in bitcoin cfds. Big percentage in price change will come since the bitcoin has broke its resistance level for this year. So your profits will be a lot bigger. And if you are in for the long term then buy bitcoins in portions. Don’t go all in right away.

 

day trading

Day trading, make some money beside your full time job

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Maybe you have done or are doing this yourself. Trading under work time and after work . But I have certainly done this before when I was in my second year of trading back then. In this article you will get to know how I made money when I still had a full time job.

From a day trading to become a long term investor

I started trading on the markets about 5 years ago. After months of practising on the demo account, I finally made my first move on the options of TomTom. I failed badly on my first trade. But learned a lot of lessons from that first trade. Some of these lessons I described it in the blog named : Demo trading account are dangerous.

After my first trade I decided that I wanted generated enough income with trading that would cover my monthly living expenses. Although I failed at my first trade but there a time window of 20 minutes where I making a profit of 60% on my investment. At the beginning of my trading career I wanted to become like Warren Buffet and George Soros but I had no large funds to become a long term investor or to become a full time trader. So I had to become a great short term trader in day trading.

Day trading during job time

While I was improving my trading strategy  and developing my investment plan for short term and long term. I was faced by another challenge. And that time was time managing. Sometimes good opportunities comes when you are at work or at moments that you are really busy. At first I tried to trade all opportunities. Some were good and a few turned out to be a pain in the ass. I got myself a few times in a situation where I was already in a trade but could not exit a trade because some unexpected stuff happens at the office that required my attention immediately and just like that my profits turned into a loss. To avoid this problem I made a rule for myself in my trading plan.Exit the trade immediately when work is calling.”

So from that day on whether my colleague or my boss was calling me, I just exit my day trading. And when I was done talking with my manager or colleague, I just either re-enter the same trade or enter a new trade.

Day trading after/before work

day trading

day trading

With so many markets on the world. You can basically trade 24 hours a day if you want too. Forex market for example is 24/5. And if you don’t like forex then you can trade in many other markets. For example if you are from the UK you can trade in FTSE during the day , the Dow Jones in the noon and at night you can trade in Asian markets. With Plus500 I was being able to trade 24/5. Because I had access to all the markets. That’s the beauty of online brokers like Plus500. It gives you the ability to trade any time and any where you want. With brokers like Plus500 or Markets.com I was able to become good at day trading. And now I even trade and make money when I am on vacation or travelling. Pretty cool huh?

 

 

A few preparation tips for a good day trading

  1. Make sure you got a trading plan. If you don’t know on how to set up a trading plan then click here: Trading plan
  2. Check out the economic data calender so that you know at which time there is a possible news influence that could create a movement on the markets
  3. Before you enter a trade fill in your trading journal

That’s all for now. If you want to know on how to trade like a pro then click here: //bit.ly/1Pd8WuA

If you don’t have a trading account , then click on one the banners below and receive a nice welcome bonus.
Plus500
Plus500

 

Grexit

Grexit: The possible consequence

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With the Greece Referendum all tension will be on today’s with the voting results. Will Greece say yes or no to the plans of the EU? On Friday some traders and investors are already selling their position or are buying new positions to benefit from the Greece current situation. Today in this blog we will discuss of what the possible consequences are when there is a Grexit.

 

Grexit: possible consequences on Greece

When a Grexit has taken place, the first thing that the Greece government is going to do is taking measures that would prevent a bank run before installing the their own currency Drachma. As you already might have notice, the Greece citizen can only withdraw 60 euro a day at the moment.

Greece already has a bad economy and it will only get worse when there is a Grexit. Because there will be barely investment capital coming to Greece. It’s too risky for investors to invest in Greece. So Greece will struggle to get his economy growing.

With already a high unemployment rate, there is a chance of riots as the Greece citizen continues to have barely a chance to earn money so that they can take care of their needs. But I think when there is a Grexit; most Greece citizen will immigrate to other EU countries. Because if I was a Greece citizen I would have emigrated to a other EU country

However Greece can devalue their currency to boost their export. But the question will be will the profit of the export enough to compensate the loss on the import and to grow the Greece economy?

 

Grexit possible consequences on the EU

What are the possible consequences that we can expect on the EU? If we look at the export balance of Greece we will see that the top three export partners of Greece are: Germany (11%), Italy (10%) and Turkey (6%) of an average monthly export deal of 2200 million Euros a month. If Greece decided to leave the EU then Germany and other Greece top export partners could in theoretically buy more for a cheaper price. If we look at the import balance we see that the top three import partners are Germany (13%), Italy (13%) and China (8%) of an average monthly export deal of 3700 million Euros a month. With a Grexit we can expect that import value will drop, because it will be too expensive for Greece to buy.

With import dropping in value not only companies get hurts badly in Greece but also companies that does business with Greece. Some are already facing problems already. One of the effects of the current capital control in Greece has caused is that Greece businesses aren’t allowed to pay its international suppliers.

Companies that were doing business with Greece companies could go bankrupt or they might have to downsize. As being traders we could make good profitable trades by going short on these companies.

Grexit

Grexit

Let’s take a look to who Greece owes money too. As you can see in the figure above where it states 15% of Greece debt is through bonds. Banks, institutional funds, private investors and so on were properly buying these bonds.

When a Grexit has taken place, there is a possibility that Greece won’t pay any the interest to any of his debt holders for a while. They already have missed out the payment on the IMF. Banks and governments who were lending money to Greece will have to re-balance their budget because they don’t receive interest rate. This will lead into a tighter government spending and a tighter lending out money from the banks.

Then one more thing that we should not forget is immigration. If Greece has no more money then how can they care of their borders? And we should not forget the threat that the minister of defence of Greece made in May. Where he threaten to over flood Europe with economic refugees and thousands of Jihadist.

To put it simply blunt a Grexit will possible lead into a higher unemployment in Greece as well in Europe, companies can go bankrupt unless the governments bails them. All of this will probably bring Europe into a recession.

 

Grexit: possible consequences for the EURO

When a Grexit has taken place the Euro will go down in value if there are no strong plans that show that Europe will survive the Greece crisis and that Europe will stay as a strong Union.

 

Grexit:  possible consequences on the Markets

What are the consequences on the markets? As we could see on last week Monday all markets were going down. And it recovers a bit during the week but that was because the markets were hoping that somehow a Grexit could be prevented.

The bonds yields from different EU countries went up. Spain bond yield went up 11%.

When the Grexit has taken place the markets will keep on going down until the EU and ECB can convince the markets to calm down with a realistic plan and program (QE2) that ensures investors that Europe will be a strong union.

 

cfd trading mindset

Trading Mindset has a big influence on making profits

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What is a trading mindset?

Hi all,

As a trader I am not only constantly looking for opportunities to make a good profit but I also look ways to improve my trading skills. For me it is fun to see my profits increase after I have implemented something of what I have learned.

Trading Mindset

Have you ever heard of trading mindset? If the answer is not then don’t worry. Because I have never have heard of it as well. Guess what?

Today on youtube I have found something that is called “Trading Mindset.” Out of curiosity  I went and check out that one hour youtube video.  And I must say I have gain some valuable insights from it. So go and check out the youtube video. I hope you guy’s can gain some good valuable insights as well.

I hope you have enjoyed the video about the trading mindset. A lot of psychological stuff was showed in here. And I have to say I have to agree with a lot of things that was showed here on the video. It’s important to have a gradings mindset. The video have showed with clear proof  here is that all successful traders use a journal and they execute their trading plan. I myself have use trading journals for years. As it a rush for me to make the biggest return ever. So far my record for day trading is a return of 4000% in 6 hours.

If you don’t know on how to create a trading plan or how to make a  trading journal. Then go and register an account for this website for free . And read the guide line “How to trade like a pro in 5 steps “that I have created that based on my trading experience for free.

MetaTrader 4 : Why should you use it?

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Markets.com

Markets.com is trading platform for Forex and CFD’s and is owned by SafeCap Investments Limited. Markets.com have won several awards for being the best online broker and for having the best customer support.

Read our full Markets.com review here.

Compare our top pick brokers here

Sign up for a free 20 pounds welcome bonus

 

What is MetaTrader 4?

MetaTrader 4 (MT4) is one of the advanced platforms (trading software) that Markets.com provides. You can use it to trade or analyze in CFD’s, Forex or Indices.

 

Why trade in MetaTrader 4?

Fast and efficient

In fast moving markets like ours you will need a fast and efficient platform to react on great chances that come and go. It is very disappointing when you miss such a chance, so a fast platform is uch needed. A lot of platforms, especially web versions have a high latency, which could lead to missing profits. MT4 needs to be installed on your computer and this is the main reason this program runs faster.

Sign up to start trading in MT4 now

metatrader4-logo

MetaTrader 4 | www.101trading.co.uk

Open and close positions with the lowest latency

With MT4 you receive the lowest latency (also called lag), which leads to less requotes and the best prices for traders.

 

One-click trading

This feature works amazingly fast. Open a position with just one mouse click.

one-click-trading

Create advanced graphs for technical analysis

Using MT4 you get to create amazing and advanced graphs for your chosen CFD’s, stocks or Forex. Use these real-time graphs for your technical analysis to increase your chances to profit. You can even save your graph layout as a template, to use it for newer graphs.

Learn how we trade in MT4 here (coming next week).

advanced-graphs

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Wide range of world class and powerful indicators

Add indicators like Boillinger Bands and/or Fibonacci with just one mouse click. You can even make your own!

 

Conclusion

If you want to take your trading to the next level, learn to use MetaTrader 4!

 

Download MT4 and start taking your trading to the next level

Read our guide about installing MetaTrader 4 (coming next week)

Read about our experience using MetaTrader 4 with Markets.com + Bonus content: How we use MT4 to increase our profits (coming next week)