5 Top Currency Pairs To Trade In Forex

Flexibility with popular currency pairs is always a great advantage for traders. There are several popular currency pairs that make trading much easier.
Here we are discussing 5 of the most popular and liquid currency pairs that are very preferred by traders.
1. EUR / USD: The EURO and the US Dollar are two of the most popular currencies in the world. So, good liquidity between them exempts the traders from great hassle. The EURO to USD currency pair is considered the most widely traded forex pair. Its high liquidity makes it less volatile than other famous currency pairs. Though most liquid instruments can also become highly volatile in certain conditions, this currency pair is a very convenient option for most traders.
2. USD / JPY: JPY can be considered as ‘safe haven’ currency during periods of Global Economic uncertainty. So, the currency pair of such a stable currency JPY and the most widespread currency USD is often termed as the second most traded forex pair in the world. Although JPY can be impacted by political and economic events in China and Korea, this currency is mostly known as the “Gateway to the East”. The combination of USD and JPY is named “The Gopher”. It has many advantages such as high liquidity and the tightest spread in the forex market. So, it can reduce the overall costs of the trade.
3. GBP / USD: The ‘Cable’ or the first currency pair to be traded via telephone lines or cables spread across the Atlantic Ocean is the currency pair of the British Pound to US Dollar. Though the United Kingdom and the United States share very strong trade relations, the ongoing uncertainty causing UK’s plans to exit the EU (‘Brexit”) has made the GBP / USD currency pair greatly volatile. The heavy trade of the pound against the Euro is reflected in the EUR / GBP gross pair. The GBP / USD pair is preferred by day traders for taking advantage of price fluctuations by dipping in and out of the market quickly and precisely. Due to this advantage, this currency pair is preferred in swing trading also.
4. USD / CAD: The US Dollar to Canadian Dollar currency pair is popular with the nickname “Loonie”. As Canada is a large exporter of oil, minerals, and grains, the Canadian Dollar is strongly tied to commodities trading. As international trade flows in these commodities bring strong liquidity in this currency pair, it can also face high volatility.
5. AUD / USD: Australia is a large exporter of commodities like natural gas, coal, iron ore, and agricultural products. So, the AUD /USD currency pair receives very strong liquidity due to international trade flows in those commodities. This currency pair was regarded as the third most popular currency pair at certain times. However, this currency pair also faces high volatility sometimes. These are the 5 most popular forex currency pairs that are hugely used in trading. At VFM Brokers, we provide you services with most of the popular currency pairs. To know more and to avail our services, feel free to contact us. Also, visit our blog page to know more about various trading methods.

What Are The Advantages of CFD Trading?

Contract For Difference or CFD is a much popular format of trading. It stands for a contract between the buyer and the seller. The contract secures the deal for the difference between the current value of any asset and its value at the contract time. It does not consider the asset’s underlying value. Only the difference between the entry and exit prices is considered. Hence, it is a much convenient and easily understandable trading method.
Here we are discussing some of the most important advantages of CFD Trading.
1. It provides Higher Leverage: In CFD Trading, you can get much more leverage than traditional trading. It has a very low maintenance margin ranged mostly between 2% to 3%. Lower margin requirements increase a trader’s potential returns but, it may also increase trader’s losses. However, high leverage is a great advantage of CFD Trading.
2. Access To Global Market From One Platform: You can avail CFD products in most of the world’s major markets. You can access those products at any moment in the day. This massive flexibility with CFD is a major advantage to the traders.
3. No Necessity to Borrow Stock due to Shorting Rules: Many markets prohibit shorting. And, due to that traders get to borrow the instrument before selling it short. Those markets mostly have different margin requirements for long and short positions. CFD is a blessing to traders operating in such markets. CFD instruments can be shorted at any time. And, the trader doesn’t need to borrow costs because he/she doesn’t own the underlying asset.
4. Trader Gets Professional Execution Without Any Fees: Brokers mainly make money on the spread payment of the trader. When the trader needs to pay the asking price and to sell or short, the trader needs to pay the bid price. But, with CFD Trading, traders get benefits like stop limits and contingent orders without any commission or with very few fees. So, the trader can save a great amount in CFD Trading.
5. There Are No Day Trading Requirements: Many markets have a fixed minimum amount for day trade capital or have a fixed limit for the number of day trades to be made within certain accounts. But, there are no such restrictions in the CFD market. There every trader is free to do day trade with a very little minimum deposit of 1000 USD. This makes CFD Trading very advantageous for most traders.
6. Diversity In Market: In CFD Trading, traders get plenty of options like index, stock, currency, treasury, sector, and commodity CFDs. So, this makes it easier for those who want to trade in diverse financial fields.
7. Traders Get Broader Hedging Options: As traders get to commit limited capital to open a position, they have access to the funds that they can use to implement hedged positions. This limits their risk at any given time. This strategy is useful when you have taken a risky position on a CFD, or when one long-term position of yours is accruing losses. In such a situation, instead of selling positions at a loss and facing huge fund losses, you can open additional positions to generate earnings that can balance out your initial position.
8. No Expiration Date: CFDs don’t have any fixed expiration dates and they have very few restrictions on closing a position. Their valuation also doesn’t decrease over time. Due to these benefits, traders can focus and be patient in long-term positions. These are some of the most vital benefits that traders get from CFD Trading. At VFM Brokers, we are always eager to provide you the best advice and services related to trading. To consult with our experts and to avail our services, feel free to contact us. Also, visit our blog page for more information about various trading methods.

Why Keeping Abreast of Financial News Is Important?

Finance is one of the most important pillars of our society. It decides the overall infrastructure of anything. But, most people think that only economists and the government should bother about financial situations. That’s never a good foundation of a stable economy.
A stable economy is made of every category of people with different financial conditions. So, it is very important for everyone to be well aware of financial news.
Our experts have jotted down some important reasons why everyone should keep abreast of financial news.
      1.  To Understand Government’s Decisions:
    Every year, the government reframes the total financial structure of the country. Income tax slabs, G.S.T., property taxes, road taxes, budgets for different national projects, and other expenses are decided every year depending on various factors. To understand those decisions and how you can make yourself as well as the government benefited from them, you must be absolutely up to date with every financial news and should have good knowledge about them.
      1. To Understand Investment Methods:
    Strategically investing a part of the savings is one of the greatest qualities of a sincere person. You can save your money in the bank but, you will get the golden opportunity to exponentially multiply it by investing an amount that you can afford to invest. To invest and earn a profit, you need to make proper strategies. And, for that, you have to be well aware of the financial news.
So, financial news is very important for everyone to invest their money and earn a good profit.
      1. To Take Your Part At Maintaining The Social Balance:
    Social infrastructures are built by everyone’s contribution. You can bring up start-up ideas and employ many ones, only if you understand the financial situation of the society. And, to understand that, you need to feed yourself the latest financial news and build your strategies.
Hence, keeping abreast of financial news becomes very important for you to do your part in social development.
From all these points, we have gained a good idea about the importance of financial news in every common person’s life. But, in your busy schedule, you may not get plenty of time to invest in following that news. That’s where the advice from experts at VFM Brokers can easily acknowledge you with details about the financial condition of the society. To get such advice and to avail our services, feel free to contact us. Also, visit our blog page to get more information on various trading-related topics.

How To Keep Emotions Out Of Trading?

Trading is something that depends mostly on logic, plans, risks, and strategies. You have to take many decisions which do not give you short term satisfaction but they can bring profits in the long run.
On the other hand, human psychology mostly depends on emotions. Our emotions make us happy in less significant things and avoid risks that will be beneficial in the future. So, emotions may stop us after receiving small profits in trade and make us avoid the long-term strategies.
We become happy or sad about anything based on how our emotions react to that. And, the emotional part of our brain is so strong that it easily overpowers our brain’s logical part that is the most important for trading. Even the expert traders also sometimes take trading decisions emotionally and face losses.
So, with years of rich experience and expertise at VFM Brokers, we are discussing some points to keep emotions out of trading.

Steps To Be Taken In Trading Process:

1. Have A Good Understanding Of The Trading System: When you have confusion about anything, you become more feared to take any major decision about that. If you understand any system in-depth, you can handle that more logically than emotionally. So, you should understand your trading system, its pros and cons, and how to get benefitted from it in the long run. This will support your brain’s emotional part to keep confidence in taking risky decisions in trading
2. Set Your Loss Limit: Every trader has to face losses. But, with proper strategies, you can turn most of your losses into profits in the long run. For that, you have to first set the maximum limit up to which you can afford losses. It will help you to take risks in making a profit through losses. And, that will not break you down emotionally.
3. Make Small Bets: Mostly everyone wants big profits from small investments. In trading, you can also earn big rewards from small bets. And, small bets reduce your risk of losses and help you to stay in trading. Also, fewer risks will support you take logical decisions without being emotional.

Steps To Be Taken Physically While Trading:

1. Walk Away From Trading Screen At Certain Intervals: As the day passes, the day trading process gets very fast and devastating. Continuous involvement in the process can bring a huge negative impact on your emotions. To avoid that, you should take a walk after each major trade. It will keep your mind refreshed and help you to stay physically healthy too. You can also listen to music during the walk to detach your thoughts from the trading process.
2. Look For The Least Volatile Hour of the Trading Session: Trading in a busy and congested market can lead you to frustration and anger. To avoid those negative emotional situations, you may take breaks when the market seems to be stagnant. You can read your favorite books during those breaks. It will provide you great emotional stability.
3. Avoid Over-trading and Revenge-trading: Multiple consecutive wins can make you feel like an unbeatable trader and you may over-trade out of overconfidence. And, that may suddenly bring huge losses to you. Also, multiple losses can make you lose confidence and you may trade impatiently to take revenge. That may lead you to devastation. So, you should follow an unwritten rule of stopping the trade after 3 consecutive wins or losses.
4. Don’t Bother About Your Wins or Losses While Trading: Constantly worrying about wins and losses can make you impatient and emotionally unstable. You may start doubting your self-worth. So, mostly try to avoid looking at your wins and losses while trading. These are some of the most important strategies not to allow your emotions to affect your trading. At VFM Brokers, we are always eager to provide you with the best advice and services. To consult with our experts and to avail our services, feel free to contact us. Also, visit our blog page for more information about trading.

Beginners’ Guide to Share Trading

Most of us save money to spend on parties, dine-outs, and other kinds of enjoyment. And when any big expenditure for our dreams or any medical condition, we get tensed while thinking about sources for such huge amounts. That is where the people with good financial knowledge and planning, stand out. They plan and invest their savings for a greater return in the time of need.
To establish yourself as such a financially well-organized person, share trading is a great option to invest less and income great. So, instead of keeping to dream expensive, start trading with shares and make those expenses a matter of a flick to you.
But before entering any new domain anyone should have some detailed knowledge about it. So, let’s put a quick view on some points which a beginner should care about before starting share trading.

Deciding your main goal

Before starting the share trading journey, you, as a beginner should set your objective properly that if you want to build your retirement fund or some wealth for your next generation or you just want to make some good money for your greater dreams. This will help you to choose your path wisely.
Then after comparing some brokers, you can choose the best broker/brokerage account for you, check for the qualities of great beginner shares/stocks as the following –
By following the path of Warren Buffett, one of the greatest tycoons in the field of share trading, you will know about the concept of “wide moat” or a sustainable competitive advantage to prevent competitors from invading/stealing a company’s market share. Now, let’s see some sustainable competitive advantages.
  • When people start to use the product or service of any company, that company, as well as its network, becomes valuable.
  • A company with an efficient distribution network or a well-known brand name can get the company great cost advantages to charging more than its competitors.
  • Patents are a good intangible asset to protect a company against its rivals.
  • Most of the best shares are often leaders in their fields.
Some good points that beginners should know –
    • P/E ratio: It is calculated by dividing any company’s current share price by its last 12 months’ net worth of earnings. It will help you to calculate the projected earnings of its share for the next 12 months.
    • PEG ratio: The ratio of any company’s P/E ratio by its projected earnings growth rate, is called the company’s price-to-earnings-growth ratio which brings the playing field for P/E shortfalls into a level.
  • Payout ratio: The annual dividend rate, expressed as a percentage of its earnings, is measured by the payout ratio. It greatly helps one to decide a share to invest in.
There are also some shares which any beginner should avoid. They are –
  • Any beginner should not consider the rapidly growing companies first and should understand shares and stocks better before investing big.
  • You should not consider penny stocks as a good share/stock trading option as they do not trade on major exchanges.
  • The new IPOs or Initial Public Offerings can be highly volatile and any beginner, as well as any share trader, should avoid them.
  • The first thing to keep in mind to try any new thing is to understand that thing. Similarly, any beginner share trader should always go for those businesses which they clearly understand. Be you a beginner or an expert share trader; never invest in those businesses which you cannot understand.
Keeping all these points in mind, you can start your share trading with ease.

CFD Trading Strategies For Beginners

In this fast-moving era, planning your finances strategically is one of the greatest necessities of life. Here planning mainly stands for investing your savings with proper planning for a greater return at the time of need. And high return mostly comes from trading. With the modernization of everything, the trading methods have also become very efficient.
Out of all the efficient trading methods, the topic of this writing is CFD Trading. The CFD or “Contract For Difference” is contracting the benefits of the differences between the investor and the party to which the investment is taking place. In CFD, you do not hold the underlying asset, your part is just to pay or receive the difference between the opening and the closing price. Now, let’s move to our main topic which is the best strategies for beginners to opt for CFD. So, we are discussing the 3 best strategies here –
  • Following news for trading: While availing of a CFD, you should follow the most beneficial methods which are scalping, intraday, or day-trading to keep your trading positions open overnight, without paying any fees. But to follow all these strategies or better to say, to track the market and to make the most out of it, you need to follow the market with great concentration, effort, and time. For that, you need to follow trading news very carefully to strategically plan a detailed economic and financial calendar. Then you will be able to properly follow intraday or day-trading where you can be benefitted by small and fast profits and also scalping for taking the advantage of small and fast profits.
  • Pair Trading: While trading with stocks and CFD, pair trading is very beneficial when you want to invest in two separate CFDs having one long position and one short position in the same sector. In this method, you have 2 assets which are usually much correlated but the method itself has started to become less correlated. So, the main benefit from this method is getting a good return from adjusting the correlation between 2 assets that are already correlated. By this approach, you get good financial benefits from this method.
  • Hedging Method: The hedging can also be termed as insurance but as an advantage, hedging has lower risk than insurance. That is the reason for which many investors use this method to reduce risk from other investment methods too. Investment firms, major banks, and hedge funds also use this method for the protection of their portfolios.
But to use trading as a path to financial gain, you must determine your suitable trading profile and must work hard on your trading strategy. For that, you have to consider your time horizon, financial awareness, your trading capital, your prime financial goals, and most importantly, how much risk you can take. After having a good idea and plan with all these, you can use CFD trading as a good investment option.

5 Most Effective Risk Management Techniques For Traders

Anyone wants to get a good return from investing their money but, that can only be possible if you protect your hard-earned money by making proper strategies against all the risks in the trading market. See, as you know that the trading market gets you intense profit much more than any other traditional safe schemes which are very renowned in the society, the trading market also has many risks. But those risks can be easily managed by proper planning and management, and you will receive great success in your trading career.
So, now let’s go through the best risk management techniques in trading –
  • Portfolio Allocation: It is never a wise decision to put all your eggs in one basket as you may lose it all in one go. The same goes with trading. If you invest all your assets in one type of trading, you may face a huge loss for any risk in that trading field. That’s why experienced trading advisors suggest properly plan and allocate your assets in different profit-making fields so that the returns and risks remain properly balanced to get you a consistent profit.
  • Limit Losses By A Stop: Trading does not always bring you profit, sometimes you have to face losses in trading but there are ways to avoid or control those losses. One of the ways is to know your different trades individually because each factor affects each trade differently. So, you need different risk management techniques for them.
Another great method is to set up the thresholds to which you can bear your losses before selling and mostly it is a percentage of the initial purchase price. This is something you can gain from experience and it will help you greatly in your trading.
  • Protecting Your Profit By Trailing Stops:  It is beneficial for a long position because it follows the price of the asset when it moves up but, stays put if the price goes the other way. And for a short position, it’s the opposite.
It is also recommended by experts to lift the stops every time the stock hitting a new high. And it is also recommended to put the stops on a closing basis instead of putting it intraday otherwise you may be shaken out of stocks that drop suddenly only for a quick rebound such as in a flash crash.
  • Position Sizing For Optimizing Your Risk Level:  Risk Level depends greatly on the sizes of your positions. So, to optimize your risk level, you should maintain such sizes of your positions that you face the minimum or no losses.
The best way to determine the size is that the position size to be proportional to the expected outcome which is the probability of gain making multiplied by the gain amount, plus the probability of loss-making multiplied by the loss amount.
  • Using Covered Calls And Minimizing Downside Risk: Selling the call options for your shares each week or month is a great way to reduce risk in holding stocks and ETFs, and also to increase cash flow simultaneously. It is done by selling the call options of your shares which you still own. This may put a cap on your upside but you will gain weekly or monthly income to protect part any downside move.
Following this consistently for many months and years, you can adjust the risks of buy and hold and can get a good performance.
This method is followed by both experts and beginners for many types of assets.
So, these are some well-analyzed methods for risk management in trading. Hope it will add some good asset to your trading knowledge. For more such information, do check the blog page for VFM Brokers.

Spread Betting vs CFD – Key Differences

In the field of trading, two very similar names are Spread Betting and CFD (Contract For Difference). They as look-alike trading opportunities have a similarity of having high leverages. They are also ways to get high returns from the market. But despite having some great similarities, they are different on some solid grounds/points which we will try to discuss in our writing. Because of some strong resemblances, spread betting is often described as a bit more than gambling. The main reason for this is the connection with underlying market prices.
  •  On the other hand, CFDs are more widely traded based on the underlying prices.
  • Spread betting is often considered an extra market transaction, where CFDs are seen as a part of the market. CFDs are considered more as a financial transaction than financial spread betting.
  • In the market, spread betting is often shown with buy and sell prices with the profit from the differences between the market price of the closing time and price of the position acquiring time but when it comes to losses, spread betting brings huge losses too, where CFDs often provide good returns for good strategic trading.
  • Spread betting, on some nodes, is much more tax-efficient than CFDs with almost the same return. Being treated with the texture of gambling activity, spread trading often gets traders relief from Capital Gains Tax and Stamp Duty. CFDs remain a bit behind on this point.
  • Spread betting charges no commission for its charges, unlike CFDs who charge at a percentage of the total transaction cost. Therefore spread betting turns out to be cheaper than CFDs in most cases.
  • Spread betting always deals in your base currency and every transaction takes place in the same currency. On the contrary, CFDs deal in the relevant base currency of the buying/selling market. This causes trouble to the traders due to currency fluctuations.
  • To maintain the no commission thing, spread trading has to go much wider than CFDs. And this makes it harder for the trader to deal with the differences in the case of both longer and shorter positions.
  • The daily settlement of spread betting makes it harder for the trader to have long positions, where CFDs are much easier to hold positions if you can bear the overnight financing costs.
  • As CFDs are dealt with based on tracking the future, it becomes easier to see the sources of its prices. Spread betting is harder on this point to track.
With CFDs and Spread betting both having some advantages and some disadvantages, it comes to the trader’s needs and situation which are the primary decision-maker in the trading.

An Introduction to CFD Trading and How does it work

In recent years, CFDs have become the most prominent way for online investors to trade their commodities, currencies, indices, and stocks. Since CFD trading doesn’t involve any assets and operates independently (with market interference), it actually gives greater flexibility than any other methods of trading—like, access to foreign markets, leveraged trading, fractional shares, short selling, and many more.
For those who are not much aware of CFDs, this is the right place for you to gain some insights about it. So, CFD means ‘Contract for Difference,’ which is a legal contract between the investor and the investment bank, or it can be between an investor and the betting firm, usually in the short-term. Close to the end of this settlement, the parties exchange the difference between the opening and closing prices of a specified financial instrument. This financial instrument can be forex, shares, and commodities. Now, Trading CFDs means that you can either make a profit or loss, depending on which direction your chosen asset moves in. Thus, CFD trading is a method of trading in which an individual engages in a contract with a CFD broker (either an investment bank or a betting firm) rather than purchasing the underlying asset directly.

What is CFD trading?

CFD trading is a financially acquired commodity that allows traders to contemplate short-term price changes. The CFD trading can be done on margin, and you can go short (sell) if you think that the prices might go down. You can else go long (buy) if you think that prices will rise. In the UK, CFDs are tax-efficient, which means you don’t have to pay stamp duty for them. Please note, there are different rules in different countries. Many CFD brokers offer products in all the world’s major markets, allowing around-the-clock access. Investors can trade CFDs on a wide range of worldwide markets.
One of the biggest advantages of trading CFDs is that traders may speculate on price movements without the need to physically owning the underlying assets. Traders will usually buy or sell several units depending on whether they think that the price of the financial instrument will increase or decrease.

How does CFD trading work?

In CFD trading, the investor buys or sells several units for a particular financial instrument, depending on the rise and fall of the prices. You don’t have to directly buy or sell the underlying financial asset (e.g. a physical share, currency pair, or commodity).
Companies often offer a wide range of CFDs in global markets, including currency pairs, stock indices, commodities, shares, and treasuries. In CFDs, the higher the price of the instrument moves in your favor, the higher you’ll gain out of each unit of CFDs you have bought or sold. The lower it goes, the more you’ll lose. Let’s learn about the process in-depth:
  1. Firstly, the trader chooses an asset offered as a CFD by the broker. It can be anything like a stock, an index, a currency, or any other asset that the broker has to offer.
  2. The trader then opens the position and sets parameters such as whether it’s a long or short position, leverage, invested amount, and other parameters, depending on the broker.
  3. Both the parties then engage in a contract, agreeing upon the opening price for the position and the additional fees.
  4. The position opens or remains open until the trader decides to close it or it automatically closes as per the command. Such as if it reaches a stop loss point or takes profit or if the contract expires.
  5. Finally, if the position closes in profit, the broker then pays the trader. If the contract closes at a loss, then the broker charges the difference from the investor.
It would be best to understand how to spread bets and CFDs work and whether you can afford to take the high risk of losing your money. All tradings are subject to market risk. However, we always advise our customers to read the market and records before investing their money in CFDs. For more information on trading and other financial investments, connect with us anytime.

5 Benefits of Using Social Trading Platforms

The internet has made trading easier for millions of people out there in the world. The approach towards stock trading and other financial activities has now drastically changed from decade-old ways. Regardless of how a person trades, there will be both advantages and disadvantages of the process. But with the advent of social trading platforms, the benefits have already exceeded the disadvantages. There are thousands of online trading platforms today, and if you are not sure about the profits that you can get from social trading platforms, then you’re at the right place. Continue reading to know the top 5 benefits of using social trading platforms:
  1. Monitoring Investments with Real-time Online Tracking: Using an online trading platform allows you to get an impressive suite of tools that provides valuable information to track the entire status of your investments. Online trader sites offer stock quotes and trade information to see how the assets are doing in real-time. You can easily manage multiple investment accounts and can monitor everything. It will enable you to see what changes you need to make to improve your outcome.
  2. Accessibility and Reliability of Information: One of the most important benefits of social trading is that it contains handy and reliable information. Moreover, the information you get from these platforms is precious to investors, especially those who have less experience and need to gain confidence for solo trading operations. The investors get the increased accessibility of information which is crucial for them. Through this, the traders can get valuable leads to promote their businesses.
  3. Diversified Strategies: Individual trading has its perks as you can trade according to your terms and your strategies to test yourself. However, regardless of your experience as a single trader, you might not be able to calculate all possible outcomes of trading by yourself. By joining these trading platforms, you can easily come across many important aspects of trading or a potentially successful trading strategy that you haven’t heard of. The group of traders discusses their experience and strategies from several angles that can be useful for new people.
  4. Become Professional Trader at less cost: Through social trading platforms, you can significantly lower the expenses needed for you to become a professional trader. Once you decided to start your career in trading, you will surely need to invest additional money as well as find more time for learning. With social trading, you can reduce the risk of facing failure due to a lack of expertise.
  5. Community Benefit: By becoming a part of a community, you can gain a lot from the world of trading. Just like investors usually have a mentor, you can have one too. Through a mentor, you can learn about different ideas, insights, leads, proven strategies and trading tools. Social trading is like a social network where anyone can seek help, advice from numerous proclaimed mentors. You can also share your ideas and exchange leads, information and news while entering into a variety of potential collaborations with other investors.
While there can be many more benefits of using social trading platforms, the first thing you can do right now starts using them. With VFM Brokers, you can start trading while being at your home. Our experts are here to help you with finding the right trading option. Connect with us now.
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