Tag Archives: curve

Novice to Pro : eToro’s Journey on the Forex Learning Curve

If we take a look at the development of eToro, both in terms of the eToro platform and the services it provides, its path in the forex industry very much resembles that of the forex trader. eToro started out with the stated purpose of introducing novice traders to the forex market and making their transition into forex trading as smooth as possible.

The platform accomplished these goals through the innovative use of trade visualizations which made the workings of the forex market visible to the trader in the shape of marathons, world trading centers and other graphic representations. By looking at how the market works, novice traders could grasp forex trading more quickly and easily. Of course no novice trader can understand the forex market just by looking at how his positions function in the market, so eToro also provided novices with plenty of guides, video tutorials, glossaries, community tools and practice opportunities.

The strategy paid off big time. Traders from all over the world flocked to eToro more than to any other platform because they could start trading with a small deposit and gradually pick the necessary skills to trade currencies. With the novice trader market covered, eToro started realizing that just as their traders were becoming more advanced with time, so do they have to start incorporating more advanced trading and analysis tools and appealing to a more advanced public of traders. To do this eToro created the eToro “expert mode” – an all in one advanced trading interface that incorporated advanced charting tools with user friendly interface design.

Here the most advanced traders could get all the forex data and technical charting info they could possibly want with the click of a button. The intuitiveness of the eToro interface made forex trading more comfortable than ever, so advanced traders had no qualms about leaving their old trading platforms to start trading in an environment where they could concentrate on market analysis rather than on the workings of the platform itself.

Now, with the addition of trading orders to the platform, eToro has fully transitioned into professional forex trader territory. The platform has also recently added commodity trading and a wider range of leverages to its already impressive selection of trading options, making it more appealing than ever for traders who seek variety and flexibility in their trading platform. Novice traders are still finding the platform as accommodating than ever, and eToro has also developed the Top Traders’ Insight tool to help them learn the ropes from the pros. The tool enables traders to see what currencies are being sold or bought by eToro’s top 100 profiting traders so that they can both emulate their trading decisions and analyze them as strategy guides.

Just as a forex trader must at some point take their trading to the next level, so did eToro take its trading capacities to the next level. There is a lesson to be learned from eToro’s overwhelming success – and that lesson is for forex providers to always evolve and seek to accommodate more kinds of traders. eToro has thrown down a massive challenge for other forex providers, and we shall have to look to the future to see if any of them manage to stand up to it.

Proprietary Forex Trading Firms – Interpreting the Yield Curve For Successful Trading Decisions in Forex

Proprietary Forex Trading Firms

The yield curve is one of the most popular and useful fundamental tools possessed by forex traders. Its effectiveness as a component of fundamental strategies, fore example, is well known. Due to the tendency of an inverted yield curve to predict recessions well in advance with remarkable accuracy, many advanced and proprietary indicators created by public and private financial indicators make use of it for the analysis of overall economic conditions. We’ll take a look at the basics of how the yield curve can be utilized by a forex trader for the same purposes in this article.

Although a majority of traders are very well aware that a central bank’s interest rate policies have a powerful impact on the overall economic dynamism of a nation, and the phases of the economic cycle, this simple characterization fails to account for the fact that the main rate of the government bank is representative of only a small section of the vast retail and wholesale bank lending system. Thus, even as the central bank influences short-term rates powerfully through its own lending policies, rates at longer maturities, stretching up to two or five years, are determined mostly by the fundamentals of the economy, and the perceptions of financial actors themselves with respect to counterparty risk, and the creditworthiness of borrowers. The yield curve is mostly useful for characterizing these crucial perceptions. While the much highlighted main rate of a central bank is definitive for overnight lending, the yield curve is the main barometer determining the availability and price of credit to firms and individuals at longer maturities. Proprietary Forex Trading Firms

The bond market determines the shape of the yield curve. It is commonly assumed by traders that traders in the bond market possess greater financial and analytical power on average, that they take their decisions with greater insight and analytical power due to their status as “smart money”, comprised of large unleveraged actors, and very big international banks and similar financial institutions. Many forex traders attempt to exploit this situation by siding with the bond market when the signals emitted by the the various financial markets contradict each other. We can have the stock market implying continuing boom over the next few years, for instance, and the carry trade breaking new records on highly speculative short-term money flows, but if the bond market contradicts these dynamics but signaling difficult times ahead (for example by moving from a normal yield curve to flat, implying a worsening outlook), it is possible to make use of this signal to take a contrarian trade, and it is the lesson of history that such positions succeed more often than they fail.

In a feedback mechanism, central banks themselves remain highly attentive to the yield curve. It is not uncommon to hear references to this important indicator during ECB conferences for example, and during FOMC discussions the yield curve may also be discussed in terms of its implications for overall economic resilience and market sentiment. Proprietary Forex Trading Firms