19 / 07 / 2018 | Wiadomości Rynkowe

Canadian CPI inflation likely to have risen in June 2018

The financial news on Friday July 20th 2018 is going to be marked by the economic data releases in Canada. The economy of Canada is a highly developed mixed economy with the 10th largest Gross Domestic Product (GDP) by nominal and the 17th largest GDP by Purchasing Power Parity (PPP) in the world, according to the International Monetary Fund’s (IMF) quarterly World Economic Outlook, published on December 10th 2017.

On Friday July 20th 2018, Statistics Canada, which is the official statistical office of the country, will publish data regarding the Consumer Price Index (CPI) inflation during June 2018. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation.  The economists’ consensus is that the Canadian CPI inflation edged up, during June 2018, coming in at 2.5% on an annualised basis. If confirmed, it will constitute a 0.3% increase when compared with the May 2018 inflation figure. The annual CPI inflation rate in Canada stood at 2.2% in May 2018, the same as in April 2018, missing market expectations of 2.5%. Higher prices for shelter and transportation were offset by the slowing cost of food, household equipment, clothing & footwear.

 The Bank of Canada (BoC) aims at an inflation range of 1%-3%. In general, a high inflation reading is seen as anticipatory of an interest rate hike and is positive (or bullish) for the Canadian Dollar. On the contrary, a lower inflation figure than the one anticipated may have a negative effect on the Canadian Dollar’s exchange rates against its major competitors. 

The BoC is also expected to release data regarding the core CPI inflation during June 2018. According to a poll by Bloomberg published on Monday 16th July 2018, the majority of economists suggest that the Canadian core CPI inflation picked up reaching 1.4% in June 2018 on a year-to-year basis. In May 2018, the core CPI inflation, which excludes volatile items, had eased to 1.3% from 1.5% in April 2018, missing market expectations of 1.4%.

CPI inflation and interest rate hikes

On July 11th 2018 the BoC’s governing board hiked the Bank’s benchmark interest rate by 0.25%, bringing the overnight lending rate to 1.5%. This was the fourth time that the BoC has raised borrowing costs in the last 12 months. Market analysts had predicted the interest rate hike given firming CPI inflation and other signs of an economy close to capacity. 

A Wells Fargo report, published on July 11th 2018, noted that ‘core measures of inflation are near the middle of the BoC’s target range and headed higher. A weaker Canadian dollar, which has fallen in the wake of trade concerns, and new tariffs on U.S. imports will add upward pressure to inflation, along with growing capacity constraints.’ The analysts of the US bank commented on the Canadian GDP growth saying that ‘we expect Q1 to be the weakest quarter of the year, due to higher oil prices, stronger export growth and a stabilization in residential investment. Stronger monthly growth puts GDP on track to expand above 2.0 percent in Q2, at the upper end of Canada’s potential GDP growth range of 1.5-2.1 percent as calculated by the BoC. Growth faster than the long-term sustainable rate should further reduce space capacity in the economy.’

Trade the Canadian Dollar on the STO platform

The Canadian Dollar against the Euro and the US Dollar are just two of the currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
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17 / 07 / 2018 | Wiadomości Rynkowe

Economists focus on UK and Eurozone CPI inflation data

Economists are waiting for the release of important economic data coming from the United Kingdom (UK) and the Eurozone this week. On Wednesday July 18th 2018, the Office for National Statistics (ONS) will publish data regarding the UK’s Consumer Price Index (CPI) inflation and the Producer Price Index for June 2018. On the same day, Eurostat will publish the Eurozone’s CPI inflation report for June 2018. 

UK CPI inflation likely to have picked up in June 2018

The most important of the releases is the UK’s CPI inflation data. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation. Analysts are anticipating that the CPI inflation picked up coming in at 2.6%, on an annualised basis. The ONS will also release data regarding the UK’s core CPI inflation in June 2018. Core CPI inflation is inflation excluding the prices of seasonally volatile products such as food and energy. According to analysts’ forecasts, the UK’s core CPI inflation is expected to have increased from 2.1% recorded in May 2018 to 2.2% on a year-to-year basis. 

In May 2018, the UK’s CPI inflation had surprised economists by remaining unchanged at 2.4%, on a year-to-year basis, which constitutes a one-year low. The consensus among market experts was that the CPI inflation would increase to 2.5%. Core CPI inflation had also remained flat at 2.1%. The ONS report accompanying the data said that Transport inflation jumped on higher fuels and lubricants costs, while prices rose at a softer pace for recreation & culture, housing & utilities, restaurants & hotels, and food & non-alcoholic beverages.

The Bank of England’s (BoE) board and its Governor Mark Carney would like to see the UK’s CPI inflation rate hovering around 2%. Average earnings, including bonuses, are expected to have increased by 2.5% during May 2018 and, if the inflation forecast is confirmed, the recent pattern of wages rising faster than prices will be reversed. 

Eurozone CPI inflation

On July 18th 2018, Eurostat, which is the official statistical office of the European Union (EU), is expected to publish data regarding the Eurozone’s Consumer Price Index (CPI) inflation in June 2018. Economists polled by Bloomberg on July 11th 2018 suggest that the Euro-bloc’s headline inflation rose to 2.0%, on an annualised basis, during June 2018. If the figure is confirmed, it will be the highest since February 2017.

The inflation rate is expected to rise due to increased prices of fuel and food. A flash estimate report released by Eurostat on June 29th 2018 said that “looking at the main components of euro area inflation, energy is expected to have the highest annual rate in June 2018 (8.0%, compared with 6.1% in May 2018), followed by food, alcohol & tobacco (2.8%, compared with 2.5% in May), services (1.3%, compared with 1.6% in May) and non-energy industrial goods (0.4%, compared with 0.3% in May).”

Trade the British Pound and the Euro on the STO platform

The British Pound against the Euro, the Euro against the US Dollar and the British Pound against the US Dollar are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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16 / 07 / 2018 | Wiadomości Rynkowe

Online social trading is a new trend

Social media according to the Merriam-Webster online dictionary are “forms of electronic communication (such as websites for social networking and microblogging) through which users create online communities to share information, ideas, personal messages, and other content (such as videos).” During the last decade, thanks to the evolution of technology and mobile devices, social media networks such as Facebook, Twitter and others have become trends and changed our way of life. 

The influence of the social media has been transmitted to the world of trading and investing. The leaders of the investment and trading sectors saw the potential of using the new technologies to improve their skills and benefit as much as possible. The result of these efforts is the commonly known online as social trading which aims to transform trading in ways that couldn’t be done until now. 

What is online social trading?

According to a KPMG report, published on September 2016, "the idea of using social platforms for trading was introduced to the market shortly after the 2008 crisis, offering the possibility for everyone (nearly) to join and to trade in the same way as the trader(s) you were following. The easy registration and low (nearly free) service fees have positioned these offerings as strong alternatives to traditional fund managers who are fighting against decreasing industry returns themselves."

Social trading works by giving people with limited financial knowledge insight into the stock exchange by allowing a real-time analysis of individual trader performance. Seen as one of the most significant shifts in trading, social trading has the potential to open up opportunities for those interested in stock markets. 

Users, as it happens on all known social media such as Facebook, Twitter, LinkedIn and others, can create social trading profiles and as they trade, their interactions are broadcast in real-time to their followers. If followers of a particular investor/trader like the way he trades, they can even choose to “copy” his trades with the click of a button. Copying specific ways of trading can be risky as markets are volatile and there is no guarantee that a successful, in the past, strategy will continue to be successful in the future. 

However, social trading helps traders who don’t have the sufficient amount of time or knowledge to devise an advanced strategy on their own by reducing the need for conducting research and by first identifying the best-performing currencies and commodities before deciding whether to buy or sell them. According to the KPMG report, “social trading carries the very nature of the democratisation of technology, offering access to better financial services and financial education to the masses. This is along the lines of what we’ve seen from robo advisors, blockchain, and mobile payments.” Economists also suggest that in the future fund managers will be able to better understand their clients’ needs based on data generated from the online social trading platforms, precisely as retail giants such as Amazon and eBay suggest new purchases to their customers. 

Trading with STO

STO has set as a goal to offer an optimal trading experience to its clients. STO pays special attention to its clients’ education by arranging educational courses such as webinars and providing its clients with the latest market news reports. STO account owners are able to trade on the most active shares in the US, German and Italian stock markets.

Trading Forex and CFDs (Contracts for Difference), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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13 / 07 / 2018 | Wiadomości Rynkowe

Meet Ethereum

Bitcoin, Ethereum, Litecoin, Ripple are words that have been added to our vocabulary in the last two years. The names of the most famous cryptocurrencies in the world are making the headlines of the financial news media, sometimes for the profit that their owners make and other times for their price drops. Bitcoin is leading the rest of the cryptocurrencies in terms of gains and fame, but some of the newer cryptocurrencies have started covering the distance with the pioneer.

What is Ethereum?
Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality.  Ether is a cryptocurrency whose blockchain is generated by the Ethereum platform. Ether can be transferred between accounts and used to compensate participant mining nodes for computations performed.

There are two accounts available through Ethereum: externally owned accounts and contract accounts. Ethereum allows developers to deploy all kinds of decentralized apps. Even though Bitcoin remains the most popular cryptocurrency, some economists speculate that the Ethereum’s growth has the potential to overtake Bitcoin in terms of usage in the future.

The story behind Ethereum
Vitalik Buterin is the programmer that designed Ethereum. Buterin had argued that Bitcoin needed a scripting language for application development. Failing to gain agreement, he proposed the development of a new platform with a more general scripting language. The Ethereum’s founder said in an interview that “I thought the people of the Bitcoin community weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each case in a sort of Swiss Army knife protocol.”

In 2014, the crowdsourcing campaign that Vitalik Buterin and other co-founders launched raised more than $18mn and since then Ethereum has grown rapidly with hundreds of developers working on the project. However, a theft of over $50mn in Ether by anonymous hackers in 2016 raised questions over the security of funds and caused a split in the Ethereum community resulting into two separate blockchains, the Ethereum Classic (ETC) and the Ethereum (ETH).

Differences between Ethereum and Bitcoin
  • The number of Bitcoin is capped at 21 million ever to be produced but Ethereum is not capped to any specific quantity. Researchers have estimated that more than 90 million tokens will be mined by 2021 while the majority of Bitcoins already have been mined.
  • They use different security protocols. Ethereum uses a “proof of stake” system. The Bitcoin uses a “proof of work” system.
  • Ethereum offers several methods of exchange including Ether (cryptocurrency), smart contracts and the Ethereum Virtual Machine (EVM).
  • The computers that run the Bitcoin platform are called miners and receive a reward for facilitating and verifying transactions. On the contrary, the Ethereum platform doesn’t offer rewards but allows miners to receive a transaction fee.
Trading Cryptocurrency CFDs on STO
Using the STO Crypto Account, our clients are able to trade Cryptocurrency Contracts for Difference (CFDs) with competitive trading conditions. STO clients can trade CFDs on three of most important cryptocurrencies such as Bitcoin, Litecoin and Ethereum.
 
Trading Forex and CFDs (Contracts for Difference), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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12 / 07 / 2018 | Wiadomości Rynkowe

US-China trade war escalates

Global financial markets were rattled on Wednesday July 11th 2018 after the United States (US) administration decided to escalate the trade war with China. The two largest economies in the world have become tangled in a trade conflict in the last few months since the US President Donald Trump declared his intention to reverse the situation regarding the trade deficit with the US trade partners. 

On Tuesday July 10th the US administration delivered another blow to the country’s trade relationship with China when it issued a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium. The US Trade Representative Robert Lighthizer, answering reporters’ questions, said that his country was acting because China hadn’t acknowledged all previous warning. 

More specifically, Robert Lighthizer noted that “for more than a year, Donald Trump’s administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior- behaviour that puts the future of the US economy at risk.” 

The news shocked the global financial markets that saw the US President Donald Trump taking the trade dispute to the point of no return as Bloomberg’s reporters wrote in their report on July 11th 2018. The famous financial media outlet noted that the new tariffs could force the Chinese administration to retaliate with dangerous consequences. The report focused on the problematic position of the Chinese President Xi Jinping towards his political comrades who ask for immediate action. 

“He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon. Yet, matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like cancelling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance,” is a quote from the Bloomberg report. 

Analysts at Nomura, which is one of the largest financial services provider headquartered in Asia, believe that China may move against the US to counterbalance the heavy tariffs imposed on its products. “We expected some response in the wake of China’s reaction to the first round of US tariff increases. However, the release of this list, only four days after the first round of tariffs took effect, indicates that trade protectionism may escalate beyond the initial round of tariffs imposed last week. The new list, targeting $200bn with a 10% tariff, is almost equally split between capital and consumer goods. Thus, if these tariffs do indeed take effect, there would likely be a larger impact on consumers than in the initial round,” Nomura’s economists noted. 

Rabobank’s research team published its report on the US tariffs on July 10th 2018 commenting that the US-China trade war is escalating adding that China probably won’t be able to impose equal tariffs because it doesn’t import an equal volume of products from the US. “Covered are low-tech goods as well as high-tech items squarely aimed at slowing China’s march to ‘2025’ industrial supremacy. If we see these duties kick in, nearly half of all Chinese exports will be under tariffs. China has immediately responded that it will “fight fire with fire” – and yet it can’t put USD200bn of tariffs in place as it doesn’t buy USD200bn more of US goods!”

STO and trading the US Dollar

The US Dollar against the Euro, the US Dollar against the British Pound and the US Dollar against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing the suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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11 / 07 / 2018 | Wiadomości Rynkowe

US CPI inflation likely to have risen in June 2018

On Thursday July 12th  2018 the United States Department of Labour Statistics is going to publish data regarding the US Consumer Price Index (CPI) and the core CPI inflation during June 2018. The CPI is an indicator used to measure the rate at which the prices of goods and services bought by households rise or fall, which is the rate of inflation, referred to as the CPI inflation. The CPI inflation figure is taken into consideration by the US Federal Reserve (Fed) board when it evaluates its monetary policy.

Economists polled by the Wall Street Journal (WSJ) on July 3rd 2018 said they expect the data to show that the US CPI inflation rose to 2.9% in June 2018, on an annualised basis. The CPI inflation stood at 2.8% in May 2018. On a month-to-month basis, they anticipate that CPI inflation increased by 0.2% matching May’s 2018 reading. The US Bureau of Labour Statistics is also going to release data regarding the core CPI inflation. According to the majority of economists polled by the WSJ, core CPI inflation will likely tick higher, coming in at 2.3% on an annualised basis. The reading is expected to be slightly higher than the 2.2% figure recorded in May 2018. The core CPI inflation measures the price movements by the comparison between the retail prices of a representative shopping basket of goods and services. In order to measure the core CPI inflation, analysts are excluding the prices of volatile products such as food and energy to capture an accurate calculation. 

The 2.8% CPI inflation figure recorded by the US Department of Labour Statistics in May 2018 was the highest reading since February 2012. The report that accompanied the data said that rising prices for gasoline and shelter led the inflation rate upwards. More specific analysts noted that “the indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, as they were in April 2018. The gasoline index increased 1.7%, more than offsetting declines in some of the other energy component indexes and led to a 0.9% rise in the energy index.” 

Nomura, which is one of the largest financial services group headquartered in Asia, released a report on July 9th 2018 regarding the US CPI inflation. Economists at Nomura suggested that core CPI inflation increased by 0.2% on a month-to-month basis in June 2018, slightly above the 0.17% pace in May 2018, but essentially the same as its six-month average. Regarding the US headline inflation rate in June 2018, Nomura’s analysts noted that “the US June headline CPI to rise by 0.2% (0.212%) m-o-m, pushing up its 12-month change to 2.9% (2.94%) from 2.80% previously. Some of the negative payback from unusually large increases of certain components in May, such as prescription drug and lodging-away-from-home prices, will likely be offset by higher airline fares and a smaller decline in used vehicle prices.”

STO and the US Dollar

The US Dollar against the Euro, the US Dollar against the British Pound and the US Dollar against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing a suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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06 / 07 / 2018 | Wiadomości Rynkowe

All you need to know about financial derivatives

Financial products are defined as instruments that help people save or invest as well as getting insurance or getting a mortgage. These are issued by various financial institutions such as banks, stock brokerages, insurance providers, credit card agencies and government sponsored entities. Financial products are categorised in terms of their type or underlying asset class, volatility, risk and return.
 
A derivative is a type of a financial product. A derivative is financial security with a value that is reliant upon or derived from an underlying asset or group of assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its price is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
 
Derivatives are complicated financial instruments. They can be great tools for leveraging a trader’s portfolio and give a lot of flexibility to traders that would like to change strategies depending on the market’s moves. Traders use derivatives to hedge, speculate or increase their leverage, with the available number of instruments continuously growing. However, derivatives and the fluctuations of their prices could be quite dangerous for traders which means that it’s crucial that traders know the risks derivatives can pose for their portfolios.
 
Advantages of derivatives
 
• All transactions related to derivatives take place in the future. It provides individuals with better opportunities because an individual who would like to short some stock for long time can do it only in futures or options. This means that the biggest benefit of this is that it gives numerous options to an investor or trader to execute all sorts of strategies.
• In derivatives market people can make large transactions with small amounts of capital and therefore it gives the benefit of leverage. This enables people who have less  money to enter the market.
• Intraday traders get the benefit of liquidity as these contracts are very liquid and also the costs, such as basis expense and brokerage, are less as compared to the cash market.
• Financial engineering is an entire field based off of derivatives. They make it possible to create complex investment strategies that investors can use to their advantage.
 
Disadvantages of derivatives
 
• Most derivatives are traded on the open market. This is problematic for traders and investors because securities fluctuate in value. Due to this volatility, it is possible for them to lose their entire value overnight if the market moves against their interests. 
• Derivatives are also very difficult to value because they are based off other securities. Since it’s already difficult to price the value of a share of stock, it becomes much more difficult to price a derivative based on that stock accurately.
• Possibly one of the most important reasons derivatives are risky for investors is that they have a specified contract life. After they expire, they become worthless. If your trading strategy doesn’t work out within the specified time frame, you may have to face substantial capital losses.
 
Trading with STO
 
STO has set as a goal to offer an optimal trading experience to its clients. STO pays special attention to its clients’ education by arranging educational courses such as webinars and providing its clients with the latest market news reports. STO account owners are able to trade on the most active shares in the US, German and Italian stock markets. 
 
Trading Forex and CFDs (Contracts for Difference), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
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05 / 07 / 2018 | Wiadomości Rynkowe

US Nonfarm Payrolls report in the spotlight

On Friday 6th July 2018, market analysts will focus on one of the most important monthly economic data releases coming from the United States (US). On that day the US Department of Labour will publish data regarding Nonfarm Payrolls in June 2018. The same department will release data associated with the average hourly earnings and the unemployment rate in June 2018. 

These financial data reports are important for global market analysts as the US is one of the largest economies in the world. Nonfarm Payrolls data is released by the US Department of Labour and represents the number of new jobs created during the previous month, in all non-agricultural business. New farm employees are excluded due to the seasonality of their profession. NFPs are regarded as an important indicator of economic conditions because they move closely in line with the overall economy. 

Economists anticipate a drop in the NFPs figure. More specifically, they expect the data to show that 193,000 new jobs were added to the US economy during June 2018. In May 2018, according to data published on June 1st 2018, NFPs impressed the markets coming in at 223,000. The figure beat market expectations of 189,000, following April’s 2018 downwardly revised 159,000. The reading was the highest recorded since February 2018. The accompanying report for May 2018, published by the US Department of Labour, mentioned that employment had grown in the manufacturing, healthcare and mining sectors.

Analysts at National Bank Finance (NBF) suggest that the most important piece of news coming from the US will be the NFPs report. In their report, published on July 2nd 2018, they noted that jobless claims remained near a 50-year low in June 2018, hinting at a very low rate of layoffs. “Still, hiring may have been limited by the shrinking number of qualified workers available. Taking both of these elements into consideration, we anticipate a 190K print. Meanwhile, the unemployment rate may stay put at 3.8% if, as we believe, employment gains in the household survey are offset by an increase in the participation rate,” NBF’s analysts noted in the report.

Average Hourly Earnings

The US Department of Labour is going to release data regarding the average hourly earnings in June 2018. Economists forecast that the average hourly earnings increased by 2.8%, on an annualised basis. If the forecast is confirmed, the figure will be 0.1% higher than May’s 2018 reading. On a month-to-month basis, average hourly earnings are expected to have risen by 0.3%, matching May’s 2018 figure. Average hourly earnings are important because the US Federal Reserve takes them into consideration when the Federal Open Market Committee (FOMC) convenes to decide on interest rates. 

Unemployment Rate

The unemployment rate in the US is the last major data release on July 6th 2018. Economists are suggesting that the unemployment rate remained stable at 3.8% in June 2018, matching the figure recorded on May 2018. The 3.8% figure recorded in May 2018 surpassed analysts’ expectations and it was the lowest unemployment rate recorded since April 2000.

STO and trading the US Dollar

The US Dollar against the Euro, the US Dollar against the British Pound and the US Dollar against the Japanese Yen are just three of the major currency pairs that you can trade with on the STO platform. STO provides its clients with all the necessary educational material such as webinars to help them with preparing the suitable trading strategy. 

Trading Forex and CFDs, which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose. 
...
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04 / 07 / 2018 | Wiadomości Rynkowe

The secrets of position trading

The quantity of offered financial products has significantly increased in recent years. Their nature also has become more complicated. Products such as derivatives, which are financial securities with values that are reliant upon an underlying asset or group of assets, have become popular among traders who believe that they might make a profit from them.

The evolution of the markets has led to the creation of specific categories in which traders have split according to their needs, strategies and targets. One of the strategies that some traders are accustomed to is position trading. 

What is position trading?

Position trading is a speculative style where a trader is most interested in longer term price moves in the market. Position traders usually take only a handful of major positions over the course of a year. However, they do trade around those positions in an active way from time to time. A position trader seeks opportunities that can last from a few months to a year or longer.

The types of trading that last for longer time periods require traders to have a thorough knowledge of the global financial markets and an in-depth knowledge of fundamental factors that can influence prices over the long term. Position traders often use a mix of technical and fundamental analysis to form their trading strategies and have the necessary time to perform thorough evaluations of the financial instruments and the assets they want to trade with.

Position traders evaluate multi-month and yearly market trends which could already be present, or they just emerge and attract attention. Position traders prefer to follow market trends as much as they can and for as long as possible. In general position traders belong to the most experienced traders since they have the necessary knowledge background and available capital to hold their positions, even if the market moves against their interests. 

Position trading appeals to traders because it doesn’t require too much time to make the right moves and reduces the need for constant observation of the market. Position traders do an initial search and choose the assets they want to trade with. Then, they take a decision to enter the trade and all they have to do is keeping an eye on their trading moves, however not so close as day or swing traders. Position traders monitor their positions occasionally without worrying about small price fluctuations which could affect the strategies of the other types of traders. 

The main risk of position trading is that minor fluctuations, which are commonly ignored, can turn into a trend reversal and result in a significant loss of capital for traders. The risks could be averted if traders utilize stop loss or trailing stop orders. Another factor that position traders should take into consideration is the availability of capital since they would have to lock it up for an extended period of time. 

Trading with STO

STO has set as a goal to offer an optimal trading experience to its clients. STO pays special attention to its clients’ educational needs by arranging educational courses such as webinars and providing its clients with the latest market news reports. STO account owners are able to trade on the most active shares in the US, German and Italian stock markets. 

Trading Forex and Contracts for Difference (CFDs), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
...
czytaj więcej
03 / 07 / 2018 | Wiadomości Rynkowe

Blockchain technology and trading

A blockchain is a distributed public ledger that uses cryptography to ensure the record is practically immutable. The idea was created by a programmer, allegedly Satoshi Nakamoto, and it's the technology that makes peer-to-peer cryptocurrency transfers possible without the need for banks or other types of institutions to verify transactions.

Benefits of blockchain technology

The new blockchain technology is used not only by the financial industry but by many types of industries to change the traditional models which had been morphed in recent decades. The World Wide Web and the evolution of mobile devices which can be used everywhere and anytime to access information created new needs for entrepreneurs and their clients. The global financial crisis that erupted in 2008-2009 changed the way that central banks across the world were implementing their monetary strategies.

Technology connoisseurs and programmers scrambled to find ways that would allow them to bypass the problems deriving from the change of the central banks’ strategies which had sometimes high cost for simple depositors and firms. The collaboration proved fruitful with the invention of blockchain technology which has the following advantages:

Transparency 

The use of blockchain technology makes every type of transaction more transparent than before. Thanks to blockchain technology, every participant in the network share the same documents instead of individual copies. Sharing the documents means that to get them updated all participants should agree on that. 

Increased Traceability

Complex supply chains can be quite problematic for firms with large volumes of products. As a result, tracing the course of a product was difficult until recently. Blockchain technology could change all that with the innovation that it has to offer. Exchanges of goods are recorded on the blockchain, making it easy to show where an asset came from, who bought and who sold it in various time periods. The possibility of fraud could also be reduced since there are available the necessary historical data which could verify the authenticity of any product. 

Enhanced Security

Blockchain is regarded as one of the most secure among all record-keeping systems. Users should agree on making a trade before recording it and after the transaction is approved, it will get encrypted. Every piece of information is stored across an extensive network of computers, which makes very difficult for hackers to attempt to compromise them. In a time that financial services and institutions find it hard to keep data safe, blockchain technology comes to fill in the blank with low costs. 

Institutions start to use blockchain

Nasdaq is leading the way among the world’s top exchanges to adopt blockchain. “The potential to enable stock exchanges to significantly reduce the cost, complexity, and increase the speed of trading and settlement processes in a secure manner, has the biggest names in the industry exploring blockchain technology. The path to its adoption will require resolving issues such as scalability, common standards, regulation, and legislation,” was noted in a report published by Nasdaq’s analysts in November 2017. 

Nasdaq has teamed up with leading Swedish bank SEB to test a mutual-fund trading platform that will run on blockchain, and which is intended to speed up and simplify several processes. But this is not the only blockchain project in which Nasdaq has participated during 2017. At the start of the year, for instance, it had completed the testing phase of using blockchain to run proxy voting on its Estonian stock exchange, the Tallinn Stock Exchange, Estonia’s only regulated secondary securities market.

Trading Cryptocurrency CFDs on STO

Using the STO Crypto Account, our clients are able to trade Cryptocurrency Contracts for Difference (CFDs) with competitive trading conditions. STO clients can trade CFDs on three of most important cryptocurrencies such as Bitcoin, Litecoin and Ethereum. 

Trading Forex and CFDs (Contracts for Difference), which are leveraged products, are high risk investments and puts your capital at risk. You may sustain a loss of some or all of your invested capital. Only speculate with money you can afford to lose.
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