Options trading seems extremely complex. Well, do you know what exactly options trading is? If you are looking for a simple understanding of this trading, this article is perfect for you.
What is Options Trading?
This trading gives traders the right, not the obligation, to sell or purchase a fixed security on a fixed date at a fixed price. An option is a contract that is linked to an underlying asset, such as stocks or another security. Options contracts are great for specific periods, which could be as short as a day or as long as a couple of years.
When traders purchase an option, they have the right to trade the underlying asset, but they are not restricted from doing so. If the trader decides to do so, it is called exercising the option. When traders sell an option, they must complete the contract. Selling options is where things get more complex, and traders could be at risk of losing an unlimited amount.
Understanding the Terms of Option Trading
Traders use some specific terms when discussing options trading. Below, we mentioned some key terms.
Holders and Writers
The purchaser of an option is known as the holder, while the dealer is known as the writer. For a call, the holder has permission to purchase the underlying market from the writer. For a put, the holder has permission to sell the underlying market to the writer.
Premium
Premium is the fee paid by the holder to the writer for the option contract.
Strike Price
The cost at which the holder can purchase (calls) or sell (puts) the fundamental market on the option’s expiry date.
Expiry Date
The date on which the options contract terminates is known as the expiry date.
In the Money
When the fundamental market’s price is above the strike (for a call) or below the strike (for a put), the option is known as in the money. It means that if the buyer exercised the option, they would be able to trade at a better price than the current market price is called in the money options trading.
Out of the Money
When the current market’s price is below the strike (for a call) or above the strike (for a put), the option is known as out of the money. If an option is out of the money at the expiry date, exercising the option will cause a loss.
At the Money
When the fundamental market’s price is the same as the strike price or very near to being equal to the strike, the option is called at the money in options trading.
Break-even Point
When the current market’s price is equal to an option’s strike plus premium (for a call) or strike minus premium (for a put). It means your trade is known as the break-even point. This means it is not making a profit or a loss.
Types of Options Trading
There are two main types of options, and they both allow clients to make money regardless of whether an asset goes up or down.
- Call Option: A call option allows the trader to purchase the fundamental stock at the strike price up until the date of the option’s expiration. When the asset cost rises, the call option increases in value, all else equal. If you are purchasing a call option, you usually predict the asset price to rise. If you are selling a call option, you are probably predicting the asset price to stay flat or decline.
- Put Option: A put option allows the trader to sell the fundamental asset at the strike price up until the date of the option’s expiration. When the asset price falls, the put option increases in value, all else equal. If you are purchasing a put option, you usually predict the asset price to fall. If you are selling a put option, you are probably predicting the asset price to stay flat or rise.
How Put Options Trading Works
Let’s say you just assume the shares of a particular stock are going to fall based on poor earnings data. They are currently trading at $30 per share. You buy a put option for 100 shares at a fixed price of S30 per share with a premium of $1 per share, costing you $100. Then, before the option’s date of expiration, shares fall by half to $15.
If you exercise your put option, you could sell the 100 shares at the higher $30 per share price. It means you would profit by $15 per share, less the $1 premium. It means you would get a net profit of $1,400. However, if the fundamental stock price rises and the option contract expires, you will lose your premium; that cost is $100.
How Call Options Trading Works
Instead of assuming shares of a particular stock to fall, let’s say you expect they will rise. Therefore, you buy a call option for 100 shares with a fixed price of $100 per share and a premium of $5 per share. The cost of the premium is $500. Then, before the option’s expiration date, shares gain $50 to a price per share of $150.
If you exercise your call option, any appreciation above the strike price shows your payout. So, if you purchase the 100 shares at the strike price of $100 per share, the underlying stock is now trading for $150 per share. It means you would get a profit of $50 per share for 100 shares, or $5000. Less the $5 per share premium paid to the option seller means you would net $4500. However, if the fundamental stock’s price falls and the options contract expires, you will lose your $500 premium.
Bottom Line
In this article, we have covered all the basics of what is options trading and different option terms as well as their types. Additionally, we also discuss how this trading is done, whether it is a call option or a put option. However, option trading is all about the timing of the market reaction, and that is a dangerous game to be playing with investing a couple of dollars.
MT4 – A norm for experienced foreign exchange market traders. This advanced trading platform helps to execute the trade when the system is off, with many technical indicators, charts, real-time market data, and many more.
What is MT4?
MetaTrader 4 was released in 2005 and developed by MetaQuotes Software Corp, which is an intuitive online trading platform built on the MQL4 programming language. Traders used this platform to speculate on the price of major financial markets, including forex, commodities, stocks, indices, metals, cryptocurrencies and others.
The software offers its users live prices and charts to place orders and manage their accounts. The platform provides trading tools like news feed charting tools and robots to see the real market prices and increase their profit potential.
History of MT4
In 2002, MetaQuotes Software Corp released the previous version of the MetaTrader platform. MetaTrader 4, released in 2005, was a significantly enhanced version of MetaTrader. Between 2007 and 2010, some firms added the MetaTrader 4 platform as an optional alternative to their existing trading software due to its popularity with traders.
However, the advanced version of MetaTrader 4 was introduced in 2009, known as MetaTrader 5 (MT5), built on the MQL5 programming language. According to reports, the MetaTrader 4 platform is still the most optimal choice for forex trading in the whole world in September 2019.
About MQL4
MT4 program uses trading approaches via MQL4 coded language. It lets the trader install your own EA: expert advisor, custom indicators, scripts, and even test and fine-tune their EA using the MetaTrader 4 strategy tester. Furthermore, MQL4 lets the traders analyze previously received and up-to-date quotations, track price movements via in-built technical indicators and manage and constantly monitor their trading orders.
The mobile version of MQL4 is created with all of the requirements that ensure flexibility. That is why, besides Windows and Mac PCs, the MetaTrader 4 mobile trading option allows investors to access the trading platform from their phones and tablets. Moreover, it also offers managing a trading portfolio and several trading accounts from a single interface. All these capabilities give a trader a distinct advantage in trading.
MT4 Features
Meta Trader 4 is a complete trading platform that includes all the necessary tools to trade online. However, depending on the software that you use, you can trade online with these;
- Indexes: S&P500 and similar
- Stocks: Google, Apple, Microsoft, and so on
- Currency Pairs: EUR/USD, USD/JPY, GBP/USD and so on.
- Commodities: Gold, silver, platinum, oil, natural gas, and others.
Here are some other main functions of MT4;
- Different timeframes
- One-click trading
- EAs: Expert advisors
- MetaQuotes marketplaces
- Numerous indicators
- Charting tools
- Established own EA and indicators
- Multiple order types
- Export and import historical data
- Internal mail delivery
- Alert tools
Compatible Operating Systems
MetaTrader 4 is accessible on almost all operating systems like;
- Mac
- Windows
- Linux
- Android
- iPhone or iPad
NOTE: Keep in mind that MetaTrader 4 is not an intuitive platform for Mac and Linux operating systems. However, if you want to use it on Mac and Linux Operating system then you have to apply some workaround and additional software.
MetaTrader 4 and Automatic Trading
Automatic trading is a useful tool for automatically processing trade orders with exceptionally quick response times. These automatic trading tools, known as EAs: expert advisors, it is a set of pre-determined trading rules like entry and exit point that are put by the trader using MT4 MQL programming language.
MetaTrader 4’s cutting-edge technology function has fully integrated automated trading. It lets the trader execute orders at a pace that would be unachievable with manual trading. Hence, traders save time from the routine of monitoring the trading market and execution of trade.
Another advantage of automatic trading is backtesting, which is a procedure to test trading on historical values. This process basically applies trading rules to past market data. Traders may readily analyze and fine-tune ideas on applying effective backtesting. After that, traders can employ these ideas in their own trading for better-quality consequences and to make a profit.
Pros and Cons of MetaTrader 4
Pros
- Customization: Traders can customize everything in their terminal. The flexibility of MQL4 and speed let the trader develop programs that are considered to be very complex tools. This platform can do complex calculations and manage EA: expert advisor and indicator parameters.
- Easy-to-use Interface: The design may look outdated, but it is extremely easy to use. Even for those who are not familiar with trading, the controls are simple enough to lead in seconds.
- Flawless Performance: The platform uses a few features from the traders’ system. It means the terminal reacts and updates the data rapidly in complex situations.
Cons
- Incompatible Terminals: EAs and custom indicators written on MQL4 for MT4 can’t be used on MetaTrader 5 platform. They have to code again with MQL5 from the start as it is not based on MetaTrader 4. So, transitioning from one platform to another is not really smooth.
- Limited Instruments: The MetaTrader 4 platform has a limited number of tools, indicators, and timeframes with particular restrictions.
- Confusing for Beginners: Customization functions are particularly appealing to advanced traders. At the same time, beginners may not be able to improve their trading strategy to an analogous range.
FAQs
Q: How to use MetaTrader 4?
Open your account on the broker site > install the terminal to your system > log in to your account > set navigation tolls and indicators > In the order window, open the trade > monitor and close your positions and pending orders. That’s it.
Q: Is MetaTrader 4 a good platform for trading?
Yes, MT4 is a leading trading software across forex and retail traders. It has all the functions that a trader requires.
Q: How to add an indicator in MetaTrader 4?
First of all, download the indicator in your system > open the terminal > click file > open data folder > MQL4 > open indicators folder > paste the indicator into the subfolder.
Stepping into the trading world and not familiar with MetaTrader? We are going to cover every little detail about it in this blog…
All About MetaTrader?
Meta Trader is a leading and very popular trading platform used for automated forex trading. Reputable brokers always considered it to be the first choice among most platforms. It is an online trading platform in the financial markets. MetaQuotes Language (MQL) Software developed it.
Moreover, traders and brokers widely use this platform for trading various financial instruments, including forex (foreign exchange), commodities, indices, stocks, and cryptocurrencies.
Furthermore, there are several versions of MetaTrader, with MT4 and MT5 being the most widely used.
Brief Introduction to MetaTrader 4
MT4 is a version of the MetaTrader and was developed by MetaQuotes in 2005. It is a great trading platform for forex traders and is highly customizable with the help of algorithms that enter and exit the trades according to the parameter that is set.
MT4 premium also gives you access to various range of enhancements, including all the additional indicators and access to Expert Advisors (EA). The MT4 platform offers a lot of opportunities for you to trade in the foreign exchange market. It is available on desktop, mobile, and on the web as well, making it easy for you to trade.
Brief Introduction to MetaTrader 5
MT 5 is another version of the Meta Trader, which was released in 2010, five years after the MT4, although it wasn’t very popular like it. MT5 was designed to do a better and improved job than the former version.
Meta Trader 5 offers a powerful trading system for the traders. It has an in-depth analysis of the market it also has a system of trades and orders. It has a system that supports both the accounting system, the traditional netting system, and the hedging option system.
MT5 also has four execution modes available Instant, Request, Market, and Exchange execution to meet various objectives of trading. Meta Trader supports all kinds of trade orders.
Key Features of MetaTrader:
Here are some of the key features of the most popular trading platform, MetaTrader:
- Charting and Analysis of the Markets
MetaTrader provides the trader with advanced charting tools and technical analysis features. So, it can use a variety of indicators, graphical objects, and analytical tools to analyze price movements in the foreign exchange market and make informed trading decisions.
- Automated Trading on the platform
MetaTrader supports algorithmic trading systems through the use of Expert Advisors (EAs). So, the traders can create custom scripts, additional indicators, and automated trading strategies using the MQL4 (for MT4) or MQL5 (for MT5) programming languages.
- Access to the Trading Market
Traders can have access to various financial markets, including forex, commodities, stocks, crypto, and indices, through MetaTrader. Now, this platform connects to different brokers, allowing users to trade a wide range of instruments.
- Tools for Risk Management
The MetaTrader platform includes risk management tools such as stop-loss and take-profit orders, helping traders manage their positions and minimize potential losses.
- Real-time Quotes on MT
MetaTrader provides the trader with real-time price quotes for financial instruments and access to financial news. Moreover, the information provided is crucial for traders to stay updated on market conditions and news events that may impact their Trading.
- Trading on Mobile
MetaTrader is available on various devices, including desktop computers, smartphones, and tablets. And because of this; traders are allowed to access their accounts and start trading.
- User-friendly Interface for traders
Meta Trader platform has a very user-friendly interface that caters to both beginners and experienced traders. It offers customizable layouts and an easy-to-use interface that helps traders to use this platform with ease.
Difference Between MetaTrader 4 and 5
Here is the difference between the two versions of the trading platform MetaTrader:
MetaTrader 4 |
MetaTrader 5 |
|
1. Asset Coverage |
MT4 is designed to trade in the forex market. |
MT5 extends beyond the forex market. |
2. Order Types |
Support market and pending orders and trailing stops. |
It introduces additional order types, such as market-depth, stop limit, and pending orders. |
3. Timeframes |
MT4 offers a set of standard timeframes, such as M1, M5, M15, M30, H1, H4, D1, W1, and MN. |
MT5 introduces additional timeframes, including M2, M3, M4, M6, M10, M12, and H2, H3, H6, H8, H12. |
4. Programming Languages |
It uses MQL 4 for creating custom indicators and Expert Advisors (EA). |
It uses MQL 5 for developing custom indicators, Expert Advisors (EA), and scripts. |
5. Backtesting |
Available but with certain limitations |
Offers more accurate backtesting capabilities. |
6. Hedging |
Supports hedging traders can have both long and short positions. |
Supports both hedging and netting systems. |
7. User Interface |
Has a simpler and more familiar interface. |
Features an enhanced and modern interface. |
FAQs
Is meta trader good for day trading?
Yes, Meta Trader 5 is a good trading platform for day trading for anyone who wants to take their trading profits to the next level.
Is MT5 free or paid?
MT5 is a free platform for retail traders; however, brokers have to pay a license to use it.
Why is a meta trader best for beginners?
All the versions of the MetaTrader are user-friendly and multifunctional and allow users to customize them according to their specific needs.
Wrapping Up
MetaTrader is a great platform for Trading in the foreign exchange market. In this blog, we have mentioned everything about the platform, including the introduction of two versions of MetaTrader. Furthermore, the difference between the two versions, which can help you choose what you think is best for you and what best suits your trading style.
Are you a beginner gold forex trader? Examining the foreign exchange analysis is the best way to know the changes in gold pair prices and the forces that influence the price changes to make a profit. You can opt for the Reversedo site for price action analysis of the foreign exchange market.
How Forex Analysis of Gold Works
In the stock market, investors purchase shares of individual companies, but in forex, shares are traded in pairs. In foreign exchange trading of gold, when one pair is purchased, it means the other pair is sold. The most commonly traded gold pair in the world is XAU/USD.
In FX analysis, an individual examines the fluctuation of pair prices as probable to be stronger over a given time. And the forces that influence those changes in the prices. Traders use this knowledge to buy the gold if they expect it to rise in value or to sell it if they expect it will decline in value.
However, retail traders and financial companies are engaging in forex analysis on a daily basis to make a profit from the FX market that works 24 hours and 5 days a week.
Pro Tip: Patience, discipline, and research will set a trader apart from traders who trade on the hover without any research or analysis of numerous FX indicators.
Types of Forex Gold Analysis
Traders use the foreign exchange analysis to know the predictions for buying and selling the gold. However, for beginners, the analysis concept looks unclear, but it has three types.
1. Fundamental Analysis
Fundamental analysis works to analyze changes in the forex market coming out of countries via monitoring figures. Including unemployment rates, interest rates, GDP: gross domestic product, and other kinds of economic data.
For instance, a trader conducts the fundamental analysis of XAUUSD and gets the data on supply and demand and the interest rate of gold in the US. Traders also want to be on top of any noteworthy news releases surfacing in the US to measure the kith and kin to the health of their economy.
2. Technical Analysis
Traders can manually and automatically program the technical analysis, such as with a forex robot. In a manual system, traders analyze technical indicators and understand the data into a buy or sell decision. However, an automated trading analysis means the traders teach the software to look for certain signals and understand them before executing a buy or sell conclusion.
In technical analysis, the trader identifies the trading prospects that depend on trading price charts. Traders use these charts to know the future decisions and probable entry and exit points for each spot. You can view technical charts by logging in to the Reversedo account, which is known as a gateway to precision trading on gold.
The automated analysis leads over the manual counterpart in that it is intended to take the behavioral economics out of trading decisions. Forex system uses past price activities to know where the value of gold may be led.
3. Weekend Analysis
A weekend analysis is akin to a dress designer preparing a blueprint to make a dress to make sure a trouble-free finishing. Traders do weekend analysis for two reasons;
- Traders want to create a big view of the forex market. Meanwhile the FX market is closed on weekends and not in active fluctuation. They don’t need to react to circumstances as they are unfolding but can review the countryside.
- Weekend analysis helps traders to set up their trading plans for the coming week and start the essential approach.
So, if you want to trade in the foreign exchange market without a plan, it is a bad idea to act recklessly in the FX market, as it can leave a hole in your pocket.
How to Apply Gold Analysis in the Forex Market?
Here, we have described the outline for applying gold analysis in the FX market.
Determine the Drivers
For successful foreign exchange trading, you must understand the current relationship between markets and the reason that these relationships exist. However, these relationships can change over time.
For Instance
A forex market recovery is explained as traders who anticipate a recovery in the gold pair. Traders believe that the pair will have improved earnings and, therefore, greater assessments in the future, so it is a great time to trade. However, an assumption based on flood liquidity could be driving motion, and good old greed is pushing prices upward till big traders join the party to trigger the selling.
Chart the Indexes
Charting the important indexes of markets for a longer time frame is beneficial for a trader. It helps to know the relationship between markets, whether the movement in one market is inverse or in concert with the other.
For Instance
Gold was driving records high in 2009, and it represent the perception that paper money was decreasing in value rapidly. It happened because there was a need to return to the metal or because of cheap dollars fueling a commodities boom, or maybe it happened due to both of these reasons.
Consent in Other Markets
Charting instruments on a weekly and monthly base, a trader will get an outlook on whether or not the markets are reaching a crossroads consent. It helps to enter a trade in an instrument affected by the turn.
For Instance
If the XAU/USD gold pair shows a hyped position, the Bank of the US intrudes to weaken the Dollar, and the exports are affected. However, US recovery is likely to be reduced without any failure of the USD.
Set Time for Trades
If a trader gets turning points on the longer frames and then switches to a shorter time to fine-tune the forex trade entry. In this situation, there is a higher chance of a successful trade. The first trade can be an exact double bottom, as shown on the extensive-term chart. However, if the first trade fails, then a second opportunity will frequently happen on a tieback or test of the support level.
Struggling to find out about Trading economics? We are here to help you with all the details you need to know.
Introduction to Trading Economics
The term basically refers to a website or platform that provides traders with a wide range of economic data, financial indicators, and other relevant information about the market. It is a real help for traders, investors, and analysts. This platform is valuable for making informed decisions in financial markets.
Furthermore, it provides its users with authentic and accurate information for all 196 countries, including their historical data and forecasts for economic indicators, exchange rates, commodity prices, stock market indexes, and government bond yields.
Importance of an Economic Calendar in the Trading Market
Trading economics provides the user with a real-time economic calendar. Also, this calendar is updated throughout the day. It is complete and accurate, and the calendar is available on the World Wide Web. These calendars are not third-party data providers. These facts are checked regularly for inconsistencies. Previous values are also available before an economic calendar is revised or reported accordingly.
The website has received 2 billion page views globally. Survey consensus figures display the average forecast among the group of economists, and they also provide forecasts that their analysts drive. Expectations are projected by using the propriety model.
Trading Economics API
Trading Economics API (Application Programming Interface) provides direct access to their data. It also allows the client to download millions of rows of historical data to answer all your queries about their real-time calendar and to subscribe to their updates. Furthermore, they provide several request methods to query their databases with samples available for you in different programming languages for you.
Therefore, it is the best way to export data in CSV, XML, or JSON format. The API can be used to feed a custom-developed application or a public website. You can adjust the API subscription pricing according to the features you use, your volume of requests, and the distribution you make.
How Does Trading Economics Work?
As mentioned above, the platform provides 23 million indicators for 196 countries. They also provide you with a real-time economic calendar, give historical data for many economic indicators, and it also give higher frequency data for exchange rates, stocks, bonds, and commodities.
It is a reference for economic data ranking second to none in Google for many important terms and indicators. Trading economics has well-diversified revenues, and about 40% of them come from recurring subscriptions. API sales and businesses and institutions also contribute 40%, and 20% comes from the advertisements on the site. Moreover, the net profit of this site has been positive since they opened the business, which is unlikely for many startup companies.
Key features of a Trading Economics platform Include:
- Economic Indicators: Displaying a variety of economic indicators such as GDP growth, inflation rates, unemployment rates, and more. These indicators are essential for understanding the overall health of an economy.
- Market Data: Providing real-time or delayed quotes and charts for various financial instruments such as stocks, bonds, currencies, and commodities.
- Historical Data: Offering historical data for economic indicators and financial instruments, allowing users to analyze trends and patterns over time.
- Calendar of Events: Highlighting important economic events, such as central bank meetings, economic releases, and other significant announcements that may impact financial markets.
- Forecasts: Some platforms may provide economic forecasts based on the analysis of historical data and current trends.
- News and Analysis: Offering financial news and analysis that can help users stay informed about developments in the global economy and financial markets.
- Customizable Alerts: Allowing users to set up alerts for specific economic indicators or market conditions to stay updated on changes that may affect their investments.
- Charts and Graphs: Providing interactive charts and graphs to visualize economic data and market trends.
Why Invest in Trading Economics?
Investing in trading economics will allow investors to finance the expansion of their business. It is set to raise the capital to cement our position as a reference for economic data worldwide. It improves the quality of services for their existing clients and allows them to stand them in a better position to compete for the multi-billion-dollar
Their professional terminals monopolize the market economics and financial conditions. It is an easy-to-access interface because of its vast databases. It has a powerful API and also offers affordable subscriptions to position it to benefit from a post-COVID world where there are no complicated data terminals and most people work remotely.
Other Platforms VS The Trading Economics
It’s important to note that several platforms and websites offer these services, and the features of each site may vary. Users often choose a platform based on their specific needs, preferences, and the accuracy of the data provided, and you can get that with trading economics.
Suppose you are interested in using a Trading Economics platform. In that case, it’s advisable to explore different options, considering factors such as the breadth and accuracy of data, user interface, and any additional features that may be relevant to your trading or investment strategy.
Trading Economics for Big Companies
It has solutions for individual customers and big companies across different services and industries. Beyond just being a trustworthy data source, it also has been a platform helping companies to understand and predict trends. It helps them identify opportunities and stay ahead of their competitors. These big companies include Apple, Google, Samsung, Unilever, and Mercedes.
Wrapping Up
Trading economics is a great platform for traders to determine opportunities. And see the market to know and stand out among their competitors. It is a better platform for traders and investors and offers lots of benefits and advantages to the user. It provides users with a real-time calendar, strong API, and high-frequency data for exchange rates, stocks, bonds, and commodities. Hope you find this article helpful!
Do you know the wonders of EA in the world of forex and how you can install it on the MT4 platform? Let’s read this article and find the role of an expert advisor in successful forex trading.
Analyzing market movements in Forex trading can be quite difficult and demanding for novices. However, there are several tools you can use to make this process simpler and even easier. One of the best tools to utilize in forex trading is expert advisors.
MT4 EAs can help you to identify beneficial trading opportunities in the market. Trading on MT4 with the help of EA can be a great step for traders to make higher profits in the market. At the same time, they have the opportunity to go on with their daily routines.
What is an Expert Advisor?
Expert advisors are also known as EAs or forex robots and run on the MetaTrader 4 or MetaTrader 5 platform. EA is the form of software or pieces of code that can automatically execute your trade and open or close a trade as per the software’s programming instructions. Moreover, when the trade is open, an EA can add close conditions like stops, trailing stops, and limits. The Meta Trader’s expert advisors are written in a coding language named MQL4 for MT4, developed by MetaQuotes Software Corp.
MT4 EA uses a mathematical model based on trade signals and identifies accurate entry points in trade. EAs also collect trading data from the forex market and send analytics to the trader. The best expert advisors are customizable, and you can set them to use your desired trading strategy.
Installing an Expert Advisor on the MT4 Platform
Transferring EA Files
- Create or download the expert advisor. Keep in mind the location where you saved it.
- Select and copy the expert advisor file you want to install.
- Search the MetaTrader 4 folder in the C drive.
- Open the expert folder and paste the copied file into it. A window requiring admin permission may appear; if so, click Continue.
Installing the EA on the MT4 Platform
- Open your MetaTrader 4 platform and find the Expert Advisor section. It is on the navigator panel on the left side of the platform.
- Tap on the Plus sign, and all the available expert advisors should be listed here.
- Select the expert advisor you want to install and drag it on one of the charts of your platform.
Adjust the EA Settings
- A pop-up box will appear showing the settings of your expert advisor.
- Preview all the settings before clicking OK.
- After clicking ok, your desired EA will start working on the platform.
Advantages of Expert Advisors
Timesaving
A forex market is open 24 hours a day and five days a week. Humans can’t monitor the market movements all the time, but EA can. Expert advisors can analyze and collect data from hundreds of markets. You can utilize the MT4 EA for trading alerts, but enter and exit decisions yourself. However, allow it to enter and exit the positions on your behalf and only see your running profit or loss.
Cut off Emotional Decision
Emotions can ruin your trading strategy. Mostly encourages you to hold on to a losing trade for longer than you should because you don’t want to lose or dive into a careless trade too quickly, riding high off a big gain. Forex EAs can help you take the emotion out of your decision. Because an algorithm only watches the market from all aspects and provides profitable signals.
Flexibility
Expert advisors can run on any market that you can trade using the MetaTrader 4 platform. Taking lots of information into account, such as price movements, economic announcements, technical indicators, or even your account’s current balance. The ability to build highly sophisticated algorithms that track multiple different markets makes expert advisors a powerful AI tool to support your trading.
Backtesting
Backtesting means checking out all your strategies against a chunk of real historical data and seeing how it executes, helping you to find out any issues before they execute in the live market. With MT4 EA, you can easily check various strategies and implement the most perfect and secure strategy for your trading account.
Disadvantages of Expert Advisors
Inexpert EAs
Before buying any EA, it is essential to carry out your research to ensure that what you are purchasing is worth of money or not. On the internet, there are many fraudulent tools available on the market to steal your money, so make sure before buying any EA to check their reviews.
Not Always Online
Unlike the web trading platform, to access MT4, you have to install it. It means that you can only access it from the device you install it on. And your expert advisor can only work when that device is switched on, with MetaTrader 4 up and running and connected to the internet.
NOTE: If you want to run your MT4 EA 24/7, you will need a VPS (virtual private server).
Lack of Human Interaction
No matter how advanced your EA is, it does not match the human brain. However, it is significant to remember that taking some of the emotion out of your decision is often useful. Complete cut-off human interaction can create new problems. It is always essential to keep track of how an expert advisor is performing and assess whether it is following your trading strategy.
What is VPS
A virtual private server is an online version of MT4 that is hosted on an external server. Enabling your expert advisors to operate even when your computer is switched off. It solves the problem of needing your device to be running MT4 for your EA to work by hosting an instance of your MetaTrader 4 on an external server that is always on.
Sum Up
In this MT4 EA guide, we have described how expert advisors work on the MetaTrader 4 platform, along with its advantages and some disadvantages. Overall, EAs are the best tool to analyze all the market movements; however, don’t completely rely on them. Instead, check your EA’s performance time by time.
Are you frustrated with doing deep forex market analysis and still making a bad decision? Don’t worry; let’s explore this article and find the perfect solution in the form of a Forex robot for your trading needs.
Forex robots are built to eliminate the psychological component of manual trading. It is not unusual for beginner and experienced traders alike to deviate from their trading. Therefore, trading robots will consider the parameters that have been set by an account holder and monitor market movements to identify trading opportunities.
Forex robots are commonly known as EAs (expert advisors). It is designed to help traders to execute profitable trades with its automated services.
Should You Buy or Build a Forex Trading Robot for Yourself
As you know, you can either purchase or build a Forex bot for yourself. The second option is more time-consuming as it requires programming skills and time to understand the essence of coding. It is a recommended view that a pre-made robot that meets all your trading needs is the best solution.
Here is what you need to keep in mind if you decide to purchase a trading bot.
- You already have little knowledge and experience of forex trading.
- Keep full attention while trading and understand that it may not be a good idea to rely on a robot completely. Ideally, you should set your trading strategy with the help of these EAs and stay tuned to trades by yourself.
- It is important to research how robots and other automated expert advisors function and understand the main principle of algorithms.
- You had the benefit of testing the software on a demo account where the conditions were quite similar to regular forex trading.
- Try to use multiple robots so that you can contrast their effectiveness and usability and select the most suitable one.
Things to Consider When Selecting the Right Forex Robot
In the market, there are thousands of Forex robots available, and it cannot be easy to select the right one for your trading needs. Here are some things to consider when choosing a forex bot.
- Performance
The uppermost thing to consider is the performance of the trading bot. Search for those robots that have a proven track record of stable profits over a long period. You can also check their reviews and individual testing results to get an idea of the robot’s performance.
- Support and Updates
It is essential to select a Forex robot from a well-known developer who provides regular updates and support. It ensures that the EA stays up-to-date with market conditions and that any technical issues can be removed promptly.
- Customization
Some trading expert advisors offer a high level of customization, allowing you to set multiple parameters and utilize the strategy according to your preferences. It can be significant for experienced traders who have a desire to have more control over their trades.
- Strategy
Different trading robots are designed to use different strategies, like scalping, trend following, or counter-trend trading. It is important to understand the strategy that the EA used and make sure it fits with your trading goals and risk tolerance.
- Backtesting
Backtesting is the process of checking several trading strategies based on historical data before implementing them on the live market. Consider that forex robot that allows for backtesting so that you can assess the effectiveness of the strategy before using it in live trading.
- User-Friendly Interface
A user-friendly interface is significant, especially for novice traders. Look for EAs that have a simple and intuitive interface, making it easy to use.
- Cost
As practice shows, perfect robots are expensive, but most of the time, they are worth their price. Unfortunately, cheap and free robots cannot be more useful than paid ones.
Best Forex Robot for Trading
While choosing the best robot for your trading needs consider the factors mentioned above in your mind. However, there is no one-size-fits-all solution. Here are some features to look for in a best-performing trading robot.
- Automated Trading
Almost most trading robots are designed for fully automated trading means they trade on behalf of a trader by opening or closing trades. It is exactly what most people expect from a robot. However, some people don’t feel secure leaving their accounts under the full control of a Forex robot. They might consider a semi-automated robot instead.
For instance, Reversedo does not trade on behalf of a trader but sets all the profitable trade and performs the trade with the permission of a trader.
- Diversified Portfolio
A good trading EA like Reversedo should have a diversified portfolio, meaning it utilizes multiple trading strategies to reduce the risk of being stuck on a single approach. It can help to minimize losses during market fluctuations and ensure consistent profits over a long period.
- Currencies Available for Trading
Some EAs can trade during all trading sessions, which means they can be used for trading all currency pairs. There are also forex EAs like Reversedo that work only with specific currency pairs, like XAU/USD.
This is the main advantage for traders as they are more customized and have a deep specialization, which allows them to be good at a specific currency pair.
- Risk Management
Risk management is an important factor in trading, and an excellent trading forex robot such as Reversedo has built-in features to control risk. It can include setting stop-loss and take-profit levels, as well as setting position sizes based on the market order.
- Global Market Reach
Regardless of your physical location, the best robot offers global market reach. However, Reversedo EA provides a complete reach of the global gold market to ensure effortless integration and user-centered experience.
Pros and Cons of Forex Trading Robot
- No Emotion
- Non-Stop working
- Smooth performance
- Analyze Multiple markets at a time
- Stay Up-to-date
- Multitasking
- Hard to build
- Minor inaccuracies
- Need constant updates
- Required stable internet connection
Final Words
In this article, we have shared all the details regarding the Forex robot and how you can utilize it to execute profitable trades. However, with the assistance of Reversedo, you can automate your gold trading with remarkable profits.
Traders use analytics tools to plan their entry and exit points to increase the chances of profit from the trade. To get the data, traders opt for several platforms; among them, Trading View is one of the best platforms. In this post, we have given you the details about TradingView, its features, and how to use it, so let’s get started.
What is Trading View?
It is a web-based cutting-edge charting and trading software that offers trading tools for traders and investors. With the real-time data of market analysis tools, a user can make informed financial decisions.
However, the company was started by the CEO (Denis Globa), CTO (Konstantin Ivanov), and COO (Stan Bokov) in 2011, and its headquarters are in New York and London. Currently, the TradingView platform is known as one of the most used traders and investors sites, with users of over 50+ million.
Features
1. Pine Script Programming Language
The advanced Pine ScriptTM programming language is the perfect algorithm that can work for hundreds in other languages. It also allows its users to make custom indicators and trading strategies.
2. Social Networking Community for Traders
The platform has an inbuilt feature to communicate with a vast community of traders. User can share ideas, strategies, and analyses and follow their favorite ones, join live streams, and much more that adopt a collaborative learning environment.
3. Technical Analysis
With the help of technical analysis tools, traders can sharpen their trading decisions. This software offers 100 plus in-built indicators, uncountable community-in-built indicators, volume profile indicators, and candlestick recognition technical analysis tools.
4. Financial Analysis
Another incredible feature of the Trading View platform is that it offers financial analysis. Including 100 plus fundamental fields and ratios, financial statements to explore balance sheets, income and cash flow statements, valuation analysis to know what companies are worth, historical data of companies, and worldwide coverage of markets data.
5. Screener
The screener tool enables traders to filter and scan stock, forex, crypto, and other assets rapidly and straightforwardly. Helping to detect trading opportunities based on technical fluctuations, performance, volatility, trend ratings, value changes, and others.
6. Dynamic Trading Alerts
Traders can sync with the markets and set up the 12 alert conditions on prices, indicators, and strategies to get notifications when conditions are met. Moreover, traders can also select how they want the notifications to be sent, like email, text, or push notifications.
7. Real-time Market Data
This software offers real-time and historical data of markets for a wide range of assets like forex, cryptocurrency, indices, and stocks letting the traders spot the trading opportunities.
8. Advance Charts
One of the main features of Trading View is its advanced and user-friendly charts. Traders can also customize their charts with various technical indicators, drawing tools, and overlays. It helps them easily perform detailed technical analysis.
9. Paper Trading
For novice traders, this platform offers a paper trading feature that lets them practice trading strategies without risking the actual money. All this indirect trading setting lets a trader gain assurance before implementing live trading.
10. Mobile Application
Traders can access this software from their iOS and Android smart devices, so you never miss any opportunity and monitor your trade on the go.
How to Use Trading View Software
If you want to use this platform to execute the trading, then you must create your account. Once you have signed up for your account, then follow these below-mentioned steps.
- On the dashboard of TradingView, you will see charting tools market watchlist, a community, and other features.
- Here, select the financial instrument that you want to analyze and customize the chat with your preferred technical indicators like moving average, Bollinger bands MACD, and drawing tools.
- Now, conduct a technical analysis via the indicators on your chart. Here, pay attention to price patterns, support and resistance levels, and other important elements influencing your trading decisions.
- When you have identified a trading opportunity, place trade directly from the TradingView software. Moreover, select your trade size, set stop loss, and take profit levels. Then, connect to your broker account to execute trades seamlessly.
- Once you have executed the trade then monitor it closely for any changes in the market conditions. Use the built-in alerts of this trading software to get notifications if the trade reaches certain price levels.
- Share your analysis ideas and strategies with the community of TradingView. Similarly, learn insights from other traders and build connections within the social community.
Analyze the Chart on Trading View
When analyzing a chart on this software, you have to study the price movements, identify patterns, and apply technical indicators to make informed decisions. Here, we have shared the steps to analyze a chart.
- First of all, look for common chart patterns like head, shoulder, double tops, or triangles. Because they can indicate the price reversal or continuations.
- After that, apply technical indicators like RSI: Relative strength index, moving average convergence divergence, and stochastic Oscillators to get insights into market trends and momentum.
- Then, locate critical support and resistance levels on the chart, as these levels are important barriers to price movements and guide you to the entry and exit points.
- Now, observe trading volume to measure market participation and the strength of price movements. Frequently high volume can signal a trend reversal or continuation.
Who Should Use this Platform?
The trading view platform offers various audiences, making it a complete platform for every individual with different trading purposes.
- Experienced Traders: This platform caters to advanced technical analysis tools and real-time data, which experienced traders appreciate. Moreover, the features also allow experienced traders to implement complicated trading strategies.
- Beginner Traders: TradingView is a supportive platform for those who are new to trading with educational resources and a community to learn from. However, the interface is quite user-friendly and lets a beginner navigate the platform without any difficulty.
- Long-Term Investors: A long-term investor can use this platform to stay UpToDate with the current market trends, monitor their investment collections, and make informed decisions based on the data.
- Technical Experts: The extensive chart capabilities and numerous technical indicators of the trading view platform benefit the technical experts. It allows them to conduct detailed analyses and detect trading opportunities.
Need some help in the foreign exchange market? An Expert Advisor (EA) is a great help when you can’t monitor your trading account 24/7.
What is an Expert Advisor?
EA is a software programmer or a piece of code which is used in the automated trading system. It automatically enters and exits trades when there is a perfect opportunity for earning profits. Expert Advisors is written in the programming language called MetaQuotes (MQL). EA carries all the activities of trading on MT4 or MT5, either one of the platforms.
They use a special and unique algorithm for finding the perfect opportunity for you to trade. However, with so many brokers available these days, it’s hard to recommend the best one for your trading because of the unpredictability.
Details of How Expert Advisor Works
EA will automatically execute trades for you without manual intervention, so you can sit back and enjoy all the profitable trading without even getting emotionally involved in the ups and downs of the market rates.
EA will help you monitor prices in real-time with their price action analysis for making sound decisions in time. This EA also helps you to trade in the global market regardless of your geographical location. And also lets you experience a use-centric and user-friendly experience.
It also creates clear and actionable signals, has technical indicators, and predicts the potential and accurate trend reversals, which are based on the comprehensive analysis of the foreign exchange market. And ensure that you are well-informed about every potential trade reversal point.
Understanding the Forex Trading Market
Before stepping into the world of trading and relying on Expert Advisors we should be aware of trading and should understand the Forex Market. As it is not as smooth as it sounds, it sure is very frustrating; we will get into details.
The Forex market is one of the largest financial markets right now. It is a place that allows participant individuals, banks, commercial companies, brokers, and financial institutions to buy, exchange, or sell the currency for both speculative purposes and hedging purposes. It allows multiple brokers from all around the world to act as market makers on the forex market. They can post bids and ask for prices for a currency that is different from the most competitive bid in the market.
The Forex market is open five days a week from Monday morning in Asia to Friday Afternoon in New York City. It is open 24/7. Allowing you to trade at any time of the day virtually. And in this case, nothing can be more helpful than an Expert Advisor always at your service to automate trades for you.
Expert Advisor and the Forex Robot in the Foreign Exchange Market
Forex EAs are automated trading tools that analyze the market by using various indicators like moving averages and MACD (Moving Average Convergence/Divergence) on platforms like MT4 and MT5. They generate signals for trading opportunities. EAs and Forex robots are often used interchangeably, though EAs focus on signal generation, while robots execute trades automatically.
Some Expert Advisors go beyond signals, managing risk by assessing account balances and implementing features like trailing stops and take-profit/stop-loss orders based on market conditions. They aim to optimize trading while limiting risk to 1-2% of the account balance. These Forex EAs can also add a condition that includes stops, limits, and trailing stops to your trading account. They will let you know once there is a position or opportunity available for you to make profits in the forex market.
Things to Consider Before Choosing Your Expert Advisor
Here are some of the things that you should be aware of when selecting an EA to make it work properly for your success in the foreign exchange trading market.
The Forex trading market is a very complex and dynamic process, and it requires a lot of knowledge and experience to trade and stay consistent in earning profits. So, it matters a lot what EA you choose as they become a legit help for you with its performance. The Expert Advisor aligns trades to parameters that are already set. And can enhance your chances of success in the dynamic Forex market.
Comparing the frameworks of different EAs while considering criteria with your compatibility, EA vision, and organizational culture is also important. Moreover, some EAs are highly customizable and allow you to set them according to your specific and individual trading style.
Advantages and Disadvantages of Forex Trading
Everything has its pros and cons, and so does the forex market has many advantages but also comes with lots of disadvantages. Here are some of those pros and cons listed below.
Advantage |
Disadvantage |
· The market is flexible and allows you to trade 24/7 |
· Increased counterparty risk due to the absence of regulation |
· There are multiple options for trading available. |
· Permitted high-leverage amounts |
· Transaction costs are very low. |
· Operational risk is a concern. |
FAQs
What language is an expert advisor?
Expert Advisor is a software programmer built from a programming language called MetaQuotes Language or MQL.
Why use EA for trading?
Expert Advisor is software that helps you to decide and set how much time you want to dedicate to the markets for trading. And it can trade for hours and find the best opportunity for you.
How do expert advisors work?
Expert Advisors find the perfect trading opportunity for you according to the parameters you set through their unique algorithmic system.
Wrapping Up
Expert Advisors are like magic workers in foreign exchange trading. In this blog, we have mentioned all the little details about the expert advisor. They help you to trade without even getting fully involved or monitoring your trading account. EAs help you to succeed and stay consistent in earning profits without little or no intervention at all. It sets the algorithm and updates you when there is a perfect opportunity.
Are you looking for a way to get a profitable forex trading experience? Look no further; in this guide, we have described all the necessary aspects of the best forex robot.
Forex trading EAs or forex robots are an outstanding way to improve your trading performance and increase your chances of profitable investments. Whether you are looking for market insights through automated analysis, preventing potential loss due to a hectic schedule, or monitoring and developing trading strategies, utilizing Forex robots can help.
Not all automated trading robots were created similarly. However, you need to find an EA that suits your trading style with successful opportunities. Luckily, the Reversedo expert team has taken these factors and more into consideration when creating the best Forex robot.
How to Use the Best Forex Robots
By understanding how trading bots in the forex market can work, you will be able to use them efficiently. The main reason behind using trading robots is that they make trading a lot easier. By using these programs, traders can make money without having to dedicate a lot of time to the forex trading market. Traders don’t even have to do anything manually.
There is casual attention that the trading bots require from forex traders to function properly. When it comes to monitoring the market, there always is some limit to the abilities of humans. Traders can not analyze multiple charts at the same time, check for the underlying, and make decisions.
On the other hand, a forex robot can do that in a matter of minutes or sometimes in seconds. These EAs work in a very simple and effective way. Once you purchase and download a robot, you will have the opportunity to adjust its settings according to your preferences. Once you get comfortable with the settings of the trading robot, you will be able to let it trade execute for you.
The trading expert advisors do many things on their own. It goes through several types kinds of charts and looks for the main trends in the market. After identifying the best trends for opening and closing signals, the EA either initiates trading or sends a signal about market fluctuations. It depends on the trading bot you are considering and the parameters that you have selected.
Contrast Between Robot Trading and Manual Trading
Manual trading relies completely on you to consider all aspects by being physically present in front of your trading desk. It requires so much time and repetitive tasks in a high-stress environment, where most allow emotions to direct trading decisions. Most traders have full-time jobs and careers to attend to, which allows them to trade at the worst possible times and be absent during the peak time of profitable opportunities.
Bot trading can bridge the challenges and help full-time traders close the existing gap between professional and seasonal traders. The alert algorithm takes an analysis process, and the most advanced ones deploy cutting-edge AI abilities that can read news and set trading strategies. It can provide price alerts for trade confirmation or under full automation while traders are away from their trading desks.
Automated bot trading gives complete cross-asset diversification without hiring a team of analysts. One intelligent forex robot can analyze tens of thousands of assets in seconds depending on the fundamental technology infrastructure.
Does Forex Robots Make Profit?
Forex EAs can be profitable as long as you select one that is right for you. Every trading bot is created differently, and significantly, you read about their specifications. If you are a long-term trader, you should select a trading bot that does not scalp the market.
The best forex robots that are potentially profitable have a fantastic balance of theory and logic, so they have to know how it monitor the market and make decisions. If you are purchasing a ready-made forex robot, you also have to determine whether it has built-in risk management strategies.
Ultimately, the best forex EA requires a knowledgeable trader and a skilled programmer to operate. While the EA makes the decision, how it comes to that is in the trader’s hands. In other words, an expert advisor is just an algorithm that follows the strategy of a trader. It only follows the instructions that are designed into it and the commands of the operator.
Best Forex Robot for Gold Trading
Reversedo is the game-changer in automated trading created to identify profitable trend reversal points on XAUUSD. It was created with an advanced strategy that combines a multitude of technical indicators and price conditions analysis to bring you unparalleled insights into the market.
Intelligent Reversal Identification
It boasts cutting-edge technology that carefully analyzes market trends to identify potential reversal points. Having the ability to stay updated on the market curve and make informed decisions.
Stop Loss and Take Profit Feature
Every trade executed by this forex robot comes equipped with strategically placed stop loss and take profit features. Reduce the risk effectively and optimize the profit potential by boosting trade confidence.
No Grid and Martingale
Unlike various other trading robots, Reversedo takes a disciplined approach without the use of grid and martingale strategies. It ensures a sustainable and controlled trading execution, putting risk management at the foremost priority.
Built-in Risk Management
With the Reversedo built-in risk management feature, traders can maximize their trading success. Tailor the approach that suits your risk tolerance and financial goals, ensuring a personalized and profitable trading experience.
Gold and H4 Timeframe
It is specifically designed to excel in trading XAUUSD on the H4 timeframe. Its specialization allows for a deep understanding of the forex market, resulting in more accurate predictions and executions on time.
User-Friendly Interface
This bot’s intuitive interface ensures a seamless and user-friendly trading experience. No matter if you are a beginner or an experienced trader in the world of forex.
Continuous Improvement
This Forex robot team of experts is devoted to ongoing updates and improvements, ensuring that reversedo meets with the dynamic nature of the financial markets.
Final Words
In this article, we have highlighted the significance of the best forex robot with differences between automated and manual trading. However, Reversedo is the best trading bot for gold trading with a sophisticated strategy.
Looking for a sign to step in the trading with an automated forex trading robot? Well, here in this article we have mentioned all the details you need to know about trading automatically.
All About the Automated Forex Trading Robot
Trading is a risky business but can be profitable if done with the right guidance and in the right manner. You know that a forex market (XAUUSD) is open 24 hours a day and five days a week. And making it impossible for a human being to monitor a trading account all day. Then, he will be dealing with the ups and downs of the market and making it emotionally drained with all the potential losses.
On the other hand, you have a trader who logically follows a unique algorithm to trade smartly. And works with predefined strategies and predetermined logic. Yes, you read it right. We are talking about the automated forex trading robot. And the best you could find for yourself is Reversedo.
How the Perfect Automated Forex Robot Works
The best Automated Forex Trading Robot allows the execution of automated trades and notifies you when there is a perfect opportunity for you to enter or exit the trade.
- They follow a specific algorithm that enables emotionless trading. Ensures that you never miss an opportunity and allows you to sit back and enjoy trading your assets, stocks, and commodities like gold.
- It also scans the profitable currency trades using the set parameters.
- These robots also integrate technical indicators for accurately predicting trend reversal points.
- Automated robots operate based on predefined trading strategies and algorithms, allowing them to analyze market conditions, give an in-depth analysis of the market trading decisions, and execute trades without direct human intervention.
- Automated Forex Robots also monitor prices and give you real-time insight into the market. So you can make a sound decision to stay consistent in the market.
- Some Forex Robots allow you to trade in the global market regardless of your geographical location.
Key Features of Automated Forex Trading Robot
Automated Forex trading robots, which can also be called Expert Advisors (EAs), are software programs. They are designed to manage trades automatically.
Automated Forex trading, as mentioned above, relies on algorithmic trading strategies. These algorithms are programmed to analyze market data, such as price charts, technical indicators, and other relevant information, to make trading decisions.
Here are some key points about the automated Forex trading robots mentioned below:
Choosing the Right Robot:
It is important to choose the right automated forex trading robot for your trading journey as you have to rely on them eventually, so here are some tips and tricks mentioned for you:
- Consider the trading strategy employed by the robot and whether it aligns with your risk tolerance and trading goals.
- Examine the historical performance of the robot through Backtesting, but be cautious about over-optimized strategies.
- Look for reviews and testimonials from other traders who have used the robot to gauge its reliability.
- Implement proper risk management techniques, such as setting stop-loss levels and position sizing, to protect your trading capital.
- Regularly monitor the performance of the automated system and be prepared to intervene if necessary. Even though EAs can operate autonomously, supervision is crucial.
Learning about the Forex Robots and the Forex Market
You must educate yourself and have a good understanding of the Foreign Exchange Market and the algorithm and trading principles before using these automated forex markets. You need to learn every tiny detail about the automated forex trading robot and the forex market.
This knowledge and learning will help in making the right decisions for your trading journey and troubleshooting issues. It’s important to explore the automated trading can provide lots of advantages and benefits; however, there is no guarantee of profitable trading, and it involves risks. You must backtest your robot before using it in the market.
Benefits of Trading with Automated Forex Robot
There are multiple benefits of trading assets and commodities like gold with a forex robot:
- The first and the most amazing benefit of automated trading is it allows you to breathe a little rather than making impulsive decisions while trading due to fear and greed.
- Automated robots stick to predetermined rules and settings.
- It also allows the trader to manage multiple trading accounts at the same time.
- EAs can operate 24 hours a day, five days a week, taking advantage of opportunities in different time zones.
- Robots execute trades based on pre-established rules, eliminating emotional decision-making that can be a challenge for human traders.
FAQs
Can I use the Forex robot on my phone?
Yes, you can use the Forex robot on platforms like MT4 and MT5 on different devices, including your Android phones.
Is automated trading profitable?
It is possible to make a lot of profits and money with the algorithmic trading that the forex robot offers.
How much can you earn with forex trading?
If you are a professional and experienced in forex trading, you can earn up to $3,000-10,000 per month.
Wrapping Up:
Forex trading is the future of trading assets and going global with them. Automated forex trading robot software can allow traders to operate accounts without constant monitoring. They can even manage multiple trading accounts at the same time. Trading robots have been a big help to the traders to save their time. It allows the trader to have a seamless experience and enjoy trading.
Are you a beginner in the trading world and want to learn about futures trading? If YES, then you are at the right place; after reading this post, you will get a comprehensive idea about the future and what benefits you will get.
What is Futures Trading?
Futures trading, also known as futures financial contracts, allows two parties to sell or buy assets at a fixed future amount and date. A buyer has to buy, and the seller has to sell the fundamental asset at the set price. Futures contracts have expiration dates and also fixed prices known as upfront.
The fixed prices of the contract are irrespective of the present market price at the expiration date. Future contracts are recognized by their expiration month. For instance, a January gold futures contract expires in January.
However, the buyer party of a futures contract is gratified to take ownership of the underlying asset at the time of the end of the contract and not any time before. The buyer party of a futures contract can sell their position at any time before expiration and be free of their obligation.
Futures Contract Example
Suppose a trader wants to wonder about the price of wheat to enter into a futures trading contract in June with the expectation that its worth will be increased by the end of the year. The December wheat futures contract at $30, and the traders buy the contract.
Wheat is traded in rises of 1000 bushels, and the investor has a position worth of wheat of $30000 (1000 x 30 = $30000). However, the trader will only have to pay a portion of the amount up front (the initial margin that they deposit with the broker).
The price of wheat oscillates, as does the worth of futures trading from May to December. If prices of wheat get too unstable, the broker may require to ask that further funds be deposited into the margin account, also called the maintenance margin.
The end date of the contract is approaching on the third Friday of December if the price of wheat has increased to $50. The trader sells the original contract to depart the position, and the net difference is cash settled. The seller gross is $20000 ($50 – $30 = $20 x 1000 = $20000) less any charges owed to the broker. Meanwhile, if the price of wheat had dropped to $20, then the investor would have lost $10000 ($30 – $20 = $10 x 1000 = $10000).
Types of Futures Trading
A trader can trade in a wide range of Futures contracts, including financial and commodity, currencies, indexes, metals, energy, and livestock. Here, we have shared the types of available futures contracts.
1. Financial Futures
Two types of financial futures are available to trade, including index contracts and debt rates. Index rate contracts offer exposure to a certain index market value. However, interest rates offer exposure to the interest rate of a specific debt instrument.
- Mini Dow Jones
- Micro E minis
- E-mini-S&P 500
- E-mini-Russell 2000
- E-mini-Nasdaq
- E-mini–Mid Cap 400
- Volatility indexes
- Bloomberg Commodity Index
- Ultra Bonds
- US Treasury Bonds
- Nikkei 225 (CME)
- Eurodollars
- US Treasury Bonds
- US 2-, 5-, or 10-years Notes
2. Currency Futures
The currency contracts offer exposure to the exchange rate of an actual currency or cryptocurrency.
- British Pound
- Euro
- US dollar Index
- Australian Dollar
- New Zealand Dollar
- Canadia Dollar
- Japanese Yen
- Swiss Franc
- Korean Won
- Mexico Peso
- South African Rand
- CME Bitcoin
3. Metal Futures
Metal futures trading offers exposure to the charge of certain metals that many companies depend on as materials for industrial and construction.
- Platinum
- Gold
- Silver
- Copper
- Palladium
- HRC Steel
4. Energy Futures
Energy contracts offer exposure to the charges of common energy products. Companies use these products for transportation production and industrial purposes, and the public also uses them for feeding.
- Natural Gas
- Gasoline
- Crude oil
- Heating oil
- Brent crude oil
- Ethanol
5. Livestock Futures
Livestock future trading contract offers exposure to the charges of live animals that are used in the supply processing of meat products.
- Lean Hogs
- Live cattle
- Feeder cattle
6. Fiber and Food Futures
Fiber and food futures contracts offer exposure to the charges of specific dairy and farming products that are grown and also mined.
- Cotton
- Wood
- Sugar
- Cocoa
- Milk
- Cheese
7. Grain Futures
Grain Futures contracts offer exposure to the charges of raw grain materials used for animals and marketable processing into other products.
- Rice
- Corn
- Wheat
- Soybean
- Soybean Oil
- Soybean Meal
- Oats
Why Should You Trade Futures?
Every trader and investor most usually opt for futures as a way to speculate on the future price movement of the underlying asset. They express their opinion about where the market may be headed for a certain commodity index or financial product to get a profit.
However, some investors also use futures trading as a hedge to help offset future market moves in a particular commodity that might impact their business. While there are some risks, a trader and investor need to be aware. But there are also some benefits of the futures market offers that the equities market does not.
1. Tax Benefits
Futures contract offers tax benefits as compared to other short-term markets. It is taxed on a 60/40 basis: 60 percent of profits are taxed as long-term capital gains and 40 percent as ordinary income. Whereas in stock trading profits on stocks held less than a year are taxed 100 percent as ordinary income.
2. Leverage
Establishing an equity position in a margin requires payment of 50 percent or more of its complete value. At the same time, futures require an initial margin amount that is usually set between 3-10% of the underlying contract value. That leverage allows a trader to generate larger returns relative to the amount of money invested.
3. Diversification
Futures trading offers a few ways to diversify your investing and give you direct market exposure to underlying commodity assets. Moreover, they let you access specific assets that are not usually found in other markets. It also helps you to design strategies to manage some risks surrounding upcoming events that could move the markets.
4. Short Selling
In the futures contract, the margin requirement will be the same for long and as well as short positions. It enables a bearish position reversal without additional margin requirements.
5. Limited Downside Risks
Another reason for trading futures is that you can speculate your profits, but they can be used to hedge your risk. Suppose you expect the market to correct by 10-12 percent; however, you believe that it would be temporary and markets would recoil back. In this situation, just hold on to your stocks and sell Nifty futures against that. Once the market corrects, you sell the futures, and the profits will help you to reduce the cost of holding your cash market position.