The Largest Forex Trading Markets in the World

The foreign currency exchange market is a global financial phenomenon. Global forex trading sessions are split into three main geographic regions: the London session (European), the US session, and the Asian session.

Each of these centres has its own particularities and unique traits. Because of this reason, traders have the opportunity to adapt their strategies and trading approaches, depending on what trading session is open at the time they exchange currencies. Getting a better understanding of these trading sessions allows traders to anticipate which the volatility and stagnation periods will appear.

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The main forex trading sessions

Traditionally, the largest forex trading markets of the world establish the trading sessions. This way, we and differentiate between the Asian session, the European session, and the US session. Because these sessions take place at different times of the day, they are dynamic and change a lot in those intervals. And so, traders can adapt their strategies, depending on the hours of the day.

  • The Asian Session, with the hot spot in Tokyo, is open between 00:00 and 09:00 GMT.
  • The European Session, with the trading capital in London is active between 08:00 and 17:00 GMT.
  • The American Session, with headquarters in New York, thrives between 13:00 and 22:00 GMT.

For more information on each market and sub-markets, keep reading below.

The UK Forex trading market

This market is still one of the most dynamic in the world. And, according to analysts and professional traders, but also to the Office of National Statistics, in 2017, there were more than 270,000 Forex traders in the UK. Here are concentrated the most European Forex traders. Second in Europe, comes Germany, with over 150,000 traders.

The same data shows that at least 1 in 10 British people has traded online at least once in …

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Tips for trading online in an economic slowdown

In 2008, the world experienced the worst financial crisis since the depression of the 1930s. In response to the decline, the central banks lowered interest rates to stimulate lending, and started printing money in the form of quantitative easing program. These measures helped the economies of the developed countries to grow and in response, global stocks rose. In fact, all the major indices in Asia, Europe, and United States rose by triple digits.

However, markets do not go up forever. There is recent evidence that points to slowing economies. This year, central banks and leading organizations like the International Monetary Fund and the World Bank have lowered their economic forecasts.

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By looking at the economic calendar, there is evidence that a slow growth environment is the ‘new normal’. The global manufacturing PMI has declined to almost 50 while inflation remains significantly lower. In China, exports have shrunk while the Q4 growth was 6.3%. In the US, the economy is expected to grow by slightly over 2.0% this year after growing by 4.2% in the second quarter of 2018. The same trend will be seen in Europe, where Italy is currently in a recession.

As a trader, this should not worry you. This is because, unlike long-term investors, you are not fully invested in the market. Instead, you observe the market, open trades in either direction and exit when you make a profit. For long-term investors, a slowdown could mean losses for their portfolio. In other words, the volatility that comes during economic slowdowns is viewed favorably by short term traders. So if you’re trading online, how can you take advantage of these conditions?

First, you need to pay close attention to market volatility, using the CBOE volatility index, often known as the fear index. In good times, the index is …

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What Will Brexit Mean For Trade?

At this point it’s been over a year since the UK voted to leave the European Union in a referendum that has become known as the Brexit vote. I wrote at the time about the potential devastating economic impact of the Brexit, and indeed there were many people forecasting a great deal of turmoil for the UK economy. But now, some 15 months on from the Brexit decision (and getting closer to the actual, formal exit of the UK from the European Union) we can look back with a little bit more perspective.

For starters, it’s worth remembering that this was one of the more surprising geopolitical events in quite some time, at least to a lot of casual observers. While some experts and even some polling firms believed in the end that Brexit had a good shot at passing, we need only look to the betting markets for confirmation of the surprise factor in retrospect. Brexit set a world record for the largest sum of wagers on a non-sports event, and across the board bookmakers reported massive losses – meaning the favored outcome (that Britain would remain in the EU) lost out.

This is not merely to point out that Brexit surprised people, but to indicate why some of the early economic predictions might have come from analysts who were a little carried away. When a shocking or calamitous event occurs, people are often quick to predict outlandish consequences. Accordingly, there were a lot of doomsayers regarding the UK’s economy in the event of a Brexit. What actually happened was a little bit of a mixed bag.

While the pound sterling did indeed plummet, as I previously noted, with many investors turning to gold as a “safe haven,” the actual UK markets didn’t suffer any noteworthy losses. There …

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Why Currency Values Drop After Political Change

Whenever there is political change, there is currency value change. Whether such political change is for the better or worse is often a matter of opinion, but almost every time currency values seem to drop after such a change. Most recently the US dollar has experienced its worst start to a year in decades, mainly due to President Trump taking residence in the White House. There are many reasons why political changes usually lead to a fall in the nation’s currency value.

Elections and Volatility

In the run-up to any election, currency values always fall. This is because traders view it as a time of political instability, with a greater chance of the currency falling leading to a sell-off by many traders. There will likely be different financial policies from all those up for the election, meaning investors and traders will be uncertain about what the future for a currency will hold until the outcome of the election is revealed. Trade can also slow down during elections, further weakening a currency.

Changing Monetary Policies

When a new leader or political party takes charge, there is often a fresh monetary approach. This is a strong driver of a nation’s currency and can direct it in a new way. Even though in the long run this could be successful, the uncertainty such a change brings about is usually harmful and will see the currency value fall. However, a currency’s value can receive a boost if the party elected is viewed by traders as one focusing on economic growth first and foremost.

The Effect on Exchange Rates

Currencies are traded in pairs across the world. When there is political change and elections in one country then this offers a great opportunity for forex trading with City Index. Selling the currency of …

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Loss aversion

For many wealth builders, winning $1000 in the stock market is very different from losing $1000 in share investments. In fact, many research studies have demonstrated that the impact arising from losses is twice as powerful as gains. This strange phenomenon is known as loss aversion.

Coined by Amos Tversky and Daniel Kahneman, loss aversion explains why most people prefer avoiding losses to making gains. Understanding this form of economic behavior may help us become better investors because it can shed some light on why people make irrational decisions consistently.

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Our brains are geared to hold on to what we own because in ancient times, our ancestors survived by holding on to resources. As a result of such human evolution, our instinct tells us to avoid making losses at all costs. But what we don’t realize is that in doing so, we often make flawed decisions and end up being financially hurt. This is because times have changed and modern day economics have become much more complex, so we cannot afford to apply the same loss aversion mentality when managing money issues in today’s context.

Most stock investors hate cutting losses because most of us has a tendency to be emotionally attached to what we own as compared to what we do not own. Due to this psychological effect, most of us tend to hold on to losers for too long and miss out the opportunities of investing in winning stocks.

Throughout my wealth journey, I was inspired by many smart and intelligent people who are willing to share with me their investment adventures. Through them, I realize that those successful investors who are able to build up their wealth are those who have strong “Financial Quotient (FQ)”. These are the people who keep making mistakes in their stock selections …

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Developing your growth mindset

In response to my previous article “Surbana terminated 50 staff”, one reader blasted me for writing a disguised advertorial. I was a bit disappointed because my intention of writing that article was actually to encourage readers to develop a growth mindset. If you are interested in developing your potential, please do read on.

The term “growth mindset” was coined by Dr Dweck, who discovered that our mindset can shape our understanding of learning. Broadly speaking, it means that we can actually grow our brain to enhance our performance in life and indirectly increase our wealth. Arising from this, we can either choose to have a fixed or growth mindset.

Some people believe that human beings are born with a certain level of intelligence and thus, assume that they can’t do much to change their destiny in this respect. This mentality is called “fixed mindset”, which curtails learning opportunities because people who have fixed mindset choose to believe they cannot change for the better.

On the other hand, there are people who believe in growing themselves through learning. They are not afraid of learning new things and have a knack of learning from their mistakes. Such people possess “growth mindset” and are often motivated by success. They are resilient and are always curious to learn.

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Which category of personality do you fall in? As a wealth builder, it is important to keep learning and growing our knowledge. Sometimes I am guilty of having a fixed mindset, especially when it comes to learning new stuff. But I keep telling myself that in order to improve myself, I have to overcome my negative thoughts and persevere. I view mistakes as lessons for me to grow and view wealth as a journey rather than a destination.

In the early days of my investment …

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Falling from the peak

Borrowing a phrase from the Taiwanese, the late Mr Lee Kuan Yew described those Singaporeans born from the eighties onward as “The Strawberry Generation” because of the perceived lack of resilience. Indeed, compare to him, many Singaporeans don’t have the experience of living in the World War II period and thus do not understand what hardship really means. Due to this, we often lose the fighting spirit of our fore-fathers in overcoming life obstacles. This is especially so when we start falling from the peak of our lives.

Contrary to what most people thought, the difficult part of mountain climbing is not the ascending phase. It is actually the descending that is more treacherous because after reaching the top of the mountain, the climber would have expended all his energy and fatigue began to set in. He would not have put much thinking on the journey downward and because of this, he become complacent, which led to his downfall literally. In fact, statistics have shown that most climbers die on their way down the mountain, rather than on the way up.

Similar to our education system, you need years of training to build up your body stamina and fitness in order to scale the highest mountain. You would realize the lack of oxygen at high altitude and it’s all about mental endurance once you are up there. If you are not careful, you would fall. In Singapore, we spend at least 16 years to obtain tertiary qualifications and then enter our first jobs to start earning incomes. This is a very long period of gestation time but nevertheless, you need to ask yourself honestly whether the paper qualifications prepare you well for the challenges that you face in your daily life. If so, good for you! If not, then what …

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5 Things That Investors Must Know About Contract for Differences (CFDs)

Contract for Differences (CFD), basically allows you to trade in leveraged products without forking out huge capitals upfront. This approach essentially manifests both your potential profits and losses, but with proper risk management, you can ensure asymmetric returns as a trader. To be an all-rounded wealth builder, it is important to have knowledge in different investment instruments and their associated risks. So let’s delve into the 5 most important things that investors must know about CFDs.

(1) What are CFDs? 

CFDs are derivatives because they derive their values from underlying assets like gold, shares or currency. This means that investors are not trading the assets. Instead they are actually trading the contracts with the service providers. This is important because investors are not owning or taking physical delivery of the underlying assets. Money is made or lost when the value of the asset moves either in your direction or against you. Thus, with CFDs, investors have the full option of going “long” or “short” the asset.

(2) The power of leveraging 

Another attractive feature of CFDs is that it allows you to put down a small investment capital for a much larger market exposure. As leveraged financial products, they are traded on margin. So instead of paying the full value of the underlying asset, you pay an initial margin to open the position. You may be required to maintain some minimum margin or top up margin, especially during volatile market conditions when the prices of these assets move against you.

Thus, there are ample opportunities to make big money with small investment. On the other hand, while CFDs can be very flexible, investors must also exercise risk management because the risk of losing more than your deposit is very real, especially when market forces turn against you.

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What Are The Advantages Of Trading Online

It won’t be wrong to say that Internet has completely changed the way many things are done these days. Today, you can buy almost everything online. You can search for information on all kinds of products and services. You can also ask for recommendations from your friends and family on social networks regarding certain products or other things.

The Possibility Of Trading Online

Thanks to the easy availability of Internet, you can also trade online. You just need a computer and an Internet connection to trade online at one of the several brokers that offer the facility of trading online. Online trading has grown a lot over the past few years. There are a number of advantages of this type of trading and here is a list of some of the major advantages.

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One of the biggest advantages is that it is extremely easy and simple for individuals to conduct trades. You can buy various instruments such as stocks, currencies, commodities, CFDs and various other such financial instruments over the Internet. You do not need to give a call to the broker or do anything else to buy a financial instrument. You simply need to log onto the website of the broker and place orders. You can place orders from anywhere even if you are on vacation on the other side of the world.

Online trading allows you to trade with efficiency and speed. Since you are trading online, you always have access to your online broker. You do not need to call your broker and discuss your specific needs and wait for them to come back to you and give some advice. Everything is at your fingertips when it comes to online trading.

Finding Reliable Platforms

Many trading online platforms offered by brokers come with a …

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Why automated trading stop losses are not always ideal (especially now)

Below is a guest post from Cynthia Siantar who is the co-founder of Call Levels, a Singapore fintech that provides free real time financial monitoring and notification service.

I’m sure we all agree that last night and this morning was a total bloodbath in the markets. But one group of people got it worse than others and who are they?
Those that had their automated trading stop losses triggered prematurely (see below), crystalised their losses, only to see the markets rebounded sharply soon after (ouch!). Not to mention there will always be that group that slept through the turmoil and wake up massively poorer. Don’t laugh, they might be someone you know.
And this is the reason why institutional investors and traders still choose to leave Call Levels: Call me when the price reaches this level with salespeople despite having the ability to set their own stop losses. They want peace of mind. When the markets go into panic mode, and none of your technical indicators make sense anymore, they want to be aware when certain price points are HIT but they don’t necessary want to execute that trade.

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As my co-founder, Daniel not-so-fondly recalls that one night many years back, he had at least 20 salespeople calling to update him because almost all his Call Levels were triggered. He didn’t sleep much that night, but was at least made aware of the situation and was able to react appropriately, mitigating the losses.
Now friend A, a retail trader who didn’t have the luxury of salespeople covering him, but set trading stop losses got the biggest shock of his life when he woke up the next morning. Financial institutions are not going to extend premium services such as Call Levels to all their clients, because it is tedious
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Investing: Why you should start young

The following is an article on investing by guest blogger, Neo Pok Chow, a 21 year old Singaporean trader and is the creator of http://www.optionssingapore.com/. If you want to have a better financial future, you’re welcome to learn about investing for free on his site.
 
Young people are often unaware or even clueless about their finances or money matters. Their school doesn’t teach them how to invest. Their parents don’t teach it either. Their peers have no clue. So to be fair, how are they suppose to know about it? This is actually a worrying sign. Ignorance, in this case, is not bliss. Ignoring your finance is foolish.
Young people need to realize that their age and time they have is their biggest attribute. They’re young and they enjoy their life hanging out and playing all around while being shielded by their parents. They fund their expenses using their pocket money and the occasional part time job during holidays. Life is good! They’re having fun! Why should they care?
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I’m not saying that young people should not have fun. I’m just saying that it is good to start learning about finance and investing from a young age as it is beneficial down the road. How would a young person know about this field of knowledge then? Well, that’s why you’re reading this right now. We can’t blame our parents for their lack of knowledge. We can’t blame the school for not including it in their syllabus. We can’t blame our friends for being clueless. With the plethora of information available on the internet nowadays, granted access, we can only blame ourselves for our lack of knowledge. [ Click here to learn what a Call is! ]
So to all the young people, why is it important to start young
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