What is a popular strategy for short-term forex traders?
For many traders, trading key announcements is seen as an opportunity to profit quickly due to the volatility that surrounds these events. One such event that is popular with traders is the US non-farm payrolls. This occurs on the first Friday of every month. The non-farm payroll is the measure of how many new jobs…
Why do forex traders always talk about range trading?
No, range trading doesn’t require you to use a laptop while you are in the saddle….it is a way of taking advantage of markets where a clear trend exists, and prices range up and down within a well-defined channel. Range trading is a strategy that depends on selling highs and buying lows of a well-defined…
Should I buy options that are in the money or out of the money?
There is no wrong and right answer to this question. Whether you decide to buy in the money or out of the money, options will be totally dependant on your trading strategy and tolerance towards risk. However we will discuss some differences between trading options at various strike prices. In the money options are obviously…
What are naked options and why are they risky?
A holder of a call option has the right, but not the obligation to buy an underlying share at a specified price, whilst the holder of a put option has the right, but not the obligation to sell the underlying share at a specified price. The process of selling new options is called ‘writing’. When…
Where did CFDs come from, and why the weird name?
Contracts for Difference or CFDs were originally developed in the United Kingdom in the early 1990’s by Smith New Court, a London based trading firm. CFDs were mainly used by the firm’s hedge fund clients to short sell using the benefits of leverage and also to take advantage of the stamp duty exemptions, which were…
What does the term scalping mean, and how can a scalper make money on CFDs?
Scalping is a trading technique that involves opening and closing positions intraday in a variety of instruments such as FX, Futures or CFDs; typically “scalpers” will aim to profit from small price movements in their trading positions. They will also tend to trade much more frequently than medium to longer term “trend” following traders. It…
How CFDs are taxed
If you’ve been unnerved at the market fall, and you dread conversations with your CFD provider, here’s a surefire way to turn the tables: ask your provider about the tax treatment of CFDs Your provider will instantly utter the weasel word “compliance”, firmly state that it couldn’t possibly be seen to be giving individual tax…
