Euro-zone business activity expansion exceeds expectations

European stocks ended mostly unchanged on Monday with better than expected euro-zone data supporting markets led by bank shares while pharmaceutical companies sold off. Strong manufacturing and services readings for euro-zone from Markit limited euro‘s slide against the dollar on the background of rising expectations of a Fed rate hike soon, while the British Pound extended losses against the dollar on continued hard Brexit concerns.

The Stoxx Europe 600 closed flat at 344.26. Monte dei Paschi shares rallied 28% as the Italian bank was set to unveil a capital-boosting and new business plan on Monday. Bank stocks rose as JP Morgan recommended investors buy financial stocks on prospects of rising global yields. Germany’s DAX 30 index rose 0.5% to record high this year at 10761.17 with both services and manufacturing PMIs exceeding expectations. France’s CAC 40 gained 0.4% while UK’s FTSE 100 lost 0.5% to 6986.40. Today October Ifo Business Climate, Current Assessment and Expectations Indexes all came in much higher than expected in Germany, indicating improved euro-zone business prospects as perceived by company executives. At 16:30 CET ECB President Draghi speaks in Berlin, and at 16:35 Bank of England Head Carney speaks at House of Lords Economic Committee.

What to trade: Futures or CFDs on Futures?

Futures and CFDs (contract for difference) on futures are considered to be very similar instruments and it is quite difficult for a novice trader to understand the difference between them. Initially, the idea of creating a CFD came to English brokers, in order to make it possible for traders to trade stocks in London Stock Exchange without the payment of a special tax - Stamp duty. Thus, CFD trading is not formally a deal with stocks and it is tax-free.

What is a CFD and futures contract?

A futures contract is a security in the form of an exchange contract on the purchase and sale of a standard amount of a specific asset at a pre-determined price in the future. There are two types of futures:

Cash settlement futures – the parties of the contract make only cash settlements in the amount of price difference between the value of the asset specified in the contract and its current value. Thus, an exchange makes a mutual settlement between the parties, and the physical delivery of the underlying asset on the expiration date of the futures contract is not made. Cash settlement futures are mainly applied for speculative trading.

Physical delivery futures – on the expiration date of a futures contract, the buyer is obliged to purchase, and the seller is obliged to sell the agreed amount of the underlying asset specified in the contract. Physical delivery contracts are not for speculative operations, since their main aim is to protect the buyer and the seller from the future price fluctuations. In case one of the parties refuses his liabilities, an exchange imposes a penalty. 

A CFD or a contract for difference is an OTC derivative financial instrument, which allows to make a profit on the purchase and sale of a certain asset without its physical delivery. In other words, this is an agreement between a trader and a broker to exchange the difference from the price fluctuations of various assets. Various instruments may serve as an underlying asset of CFD: stocks, indices, commodity futures, etc.

Thus, by their definitions,   CFDs and cash settlement futures are similar, since they both involve payment of the price difference without a direct delivery of the asset, but according to a number of features, they differ from each other.

The differences between a CFD and futures

Futures are traded on the exchange and CFDs are traded on the OTC market.

• An exchange acts as a guarantor for the execution of obligations of a futures contract, and for CFDs - a financial company (for example, a broker).
• Futures prices are determined while stock exchange trades and the prices of CFDs, equal or close to the exchange price, are determined by a broker.
• Futures are traded with the spread of an exchange and with the commission of a broker, while the spread of CFDs is defined by a broker.
• It is possible to trade CFDs with much less amount of money, than futures, since a broker provides the opportunity to trade not only a full contract but also the parts of a contract. .
• In case of CFD trading, the leverage, as a rule, is higher than in case of futures trading.

CFD trading is very convenient and it allows to make a profit from the purchase and sale of securities in case of having a small amount of money. Depending on the preference and the amount of the capital, each one chooses what to trade: futures or CFDs on futures. Before starting to trade, one needs to carefully study the conditions offered by brokerage companies. Today, one of the leaders in CFD market with ideal conditions for trading is IFC Markets, which offers its clients exact quotations and competitive spreads. In addition, it is possible to trade a wide range of instruments not only on MetaTrader 4 trading platform, but also on a professional terminal NetTradeXdeveloped by the company. Moreover, through NetTradeX platform, it is possible to trade separate instruments, as well as portfolios from various assets. 

An Interesting fact about Amazon.cоm

Amazon.cоm, Inc. or simply Amazon is the largest online retailer in the world. The company was founded in 1994, by an American entrepreneur Jeff Bezos. The company offers its customers a wide range of products and services through its Websites. Besides offering its own products, the company also offers third-party products across various categories. Nowadays, Amazon.cоm is one of the most popular and the most recognizable names across the world. However, there are still someinteresting facts about the company you have probably never heard of.

Did you know that Jeff Bezos originally wanted to name the company “Cadabra” as in “Abracadabra”? But that idea was struck down, because the lawyer of Jess Bezos misheard the word as “cadaver”. So, he changed his mind and instead decided to call the company Amazon.cоm. He came up with the name Amazon.cоm for two reason: one, to suggest scale (Amazon.cоm launched with the tagline “Earth’s biggest book store”) and two, back then website listings were often alphabetical, so his company's name would come up first in website listings.

Keep on trading CFD on Amazon Stocks!

Technical Analysis #C-FCATTLE : 2016-10-24

Beef prices advance together with grains

The price of feeder cattle soared last week on steady increase of grain futures prices. Corn, wheat and oats are used to produce mixed cattle feed. Will  Fcattle  continue rising in price?

On the daily chart Fcattle: D1 has slumped almost 1.5 times since start of Q2 2016 having hit a fresh 6-year low and are now struggling for growth. Their further increase is possible in case of higher beef prices.

• Parabolic is giving bullisg signals.
• Bollinger bands have widened which means higher volatility.
• RSI is below 50. It has formed positive divergence.
• MACD is giving bullish signals.

The bullish momentum may develop in case the Fcattle surpasses the resistance of the downtrend at 124.6. This level may serve the point of entry. The initial stop-loss may be placed below the Parabolic signal and the last fractal low and 6-year low at 115.6. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 115.6 without reaching the order at 124.6, we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis #C-SOYB : 2016-10-18

China to purchase 5.1mln tonnes of US soy

China is to acquire 5.1mln tonnes of US soy for $2.1bn, according to U.S. Soybean Export Council. The agreement was signed on Friday. Will soy prices advance?

On the daily chart Soyb: D1 has been increasing for 3 straight days having approached the upper boundary of sideways channel. The price has surpassed the level of 200-day moving average. Further growth is possible in case high demand for soy persists.

• Parabolic is giving bullish signals.
• Bollinger bands have widened which means low volatility. They are slightly tilted upwards.
• RSI is above 50, no divergence.
• MACD is giving bullish signals.

The bullish momentum may develop in case the soy surpasses the upper Parabolic signal and Bollinger band, support of the rising trend and two last fractal lows at 985. This level may serve the point of entry. The initial stop-loss may be placed below the lower Bollinger band, Parabolic signal and the last fractal low at 940. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 940 without reaching the order at 985, we recommend cancelling the position: the market sustains internal changes which were not taken into account.

3 Popular Forex Trading Strategies

It is very essential to choose a Forex trading strategy that works, as trading without a trading strategy is like driving somewhere without a concrete destination. There are numerous Forex trading strategies, some rely on technical use of charts and numbers, and others rely on a profound understanding of the market with reference to current events. Here are 3 popular Forex trading strategies: Price action trading, Trend trading and Basket trading.

Price action trading
Price action is usually described as a “naked’’ form of trading, based only on price movements. In fact, the price decides whether a trader will open or close a position, it’s the major indicator as to whether a trader will ‘‘buy’’ or ‘‘sell’’. A lot of price trends repeat themselves and form patterns. In case there is any sign that prices are offset, this means that price action traders will exit. Since Price action is mainly focused on recent and past price movements, this strategy is dependent on technical analysis tools.

Trend trading
Trend trading is another popular trading strategy, widely used by new and experienced traders, because strong trends usually tend to produce the greatest results. This strategy is based on trends and the history of movements in currencies. 3 basic movements exist in the Forex market: uptrend, sideways and downtrend. With this strategy traders try to benefit from prices moving up, sideways or down. Put simply, trend trading refers to identifying the direction prices have been moving and then placing trades in that same direction.

Basket trading
Basket trading is rather effective and simple in use, it combines trading with different currency pairs at one time. One of the main advantages of Basket trading is that it gives traders the opportunity of placing several positions in just one order and allows them to be more efficient in managing their securities. With Basket strategy investors can tailor their investment portfolios to their specific needs and goals. There are different types of basket strategies, some of which are a combination of long and short positions, and others are based on all long or all short approach. The secret of this strategy’s success is in the way it is set up and managed. This strategy is important for institutional investors, as well as investment funds who want to hold a huge number of securities in certain proportions.

It is worth to mention that the top Forex trading strategy is determined by what suits you the most, which means that you can also develop the best trading strategy that will meet your trading needs. So, begin exploring other traders’ strategies, as it will help you find out what works for you.

The Best Online Trading Books for Beginners

It is an undeniable fact that Foreign Exchange market is very attractive, as it gives the opportunity of entering and discovering the boundless world of finance. But being that much appealing from the first sight, Foreign Exchange market is also very complicated and sometimes even dangerous. In order to be able to understand the essentials of the market, one will need to have sufficient background of knowledge. The increasing popularity of Forex trading has caused to the appearance of various books regarding trading and today, there is no need to go to a bookshop and buy your preferred book, as with the existence of Internet, everything has become more available and each one can find any book on trading easily. 

What Are The Best Online Trading Books for Beginners?

As it was already mentioned above, before entering the world of trading, each beginner should have wide knowledge on the market in order to be able to overcome the possible obstacles. But the thing is how to find out which the best trading books for beginners to read are. Nowadays, the Internet is full of various educational materials and books, which try to explain the essence of trading, but only a few of them can be considered good ones. A good trading book should not be written in a very complicated way, so as anyone, who is unfamiliar with the market, could easily grasp the main concept. Below are presented some of the best online trading books for beginners, which will help them to get acquainted with trading and find answers to all their questions.

• Make Forex Trading Simple

This tutorial will help beginners to learn about Foreign Exchange market thoroughly. After having read the book, each beginner will be able to get involved in trading easily. This tutorial is one of the best online trading books for beginners.

• Mistakes that Traders Make during Online Trading

It is impossible to avoid making mistakes in trading, especially if you are a beginner. In this book are presented some of the most common mistakes that each trader tends to make. But by reading this book and learning about the mistakes, each trader will be able to somehow avoid making them.

• CFD Trading

CFD trading has become quite popular in the last years and each day more and more people are taking up CFD trading. CFD trading gives the opportunity of generating high profits, but if someone is not familiar with CFDs, then he will come across a lot of difficulties. This tutorial is the best way to learn and understand the overall concept of CFD trading.

• Technical Analysis Explained

Each trader knows that the role of technical analysis in trading is significant, as it can help to develop new trading skills and become a better trader. This book will help to understand the essence and the benefits of technical analysis.

The books listed above can be a great help not only for beginners, but also for professional ones. So, if someone has certainly made up his mind to take up trading, then do not waste the time in vain. Choose the right and the best trading book and enlarge your knowledge.