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يناير 20, 2014

Stock Trading UAE – Small Things that Makes Big Differences

In stock and forex trading small rise and fall of prices can result in very big gains and losses. Although there are many long-term and short-term price controlling factors which are widely discussed by experts and traders, often very small things causes big differences. Interestingly most of these things follow some patterns and are predictable. Below is a list of these small stock trading things that makes big differences in your profits and losses.

  1. January Effect: In order to reduce the capital gains taxes in trading, traders tend to buy under-performing stocks in January. This causes excess selling pressure before January and excess buying pressure after January.
  2. The Days of Week Effect: Although makes not much sense, different days of a week have different market sentiments. It is observed that Fridays have more positive market movements than Mondays.
  3. Small Firm Effect: It is observed that small firm stock outperform their big counterparts. The fundamentals and growth prospective of small firms are usually better than established larger companies.
  4. Price Reversals Effects: The effects cause under-performers to outperform and out-performers to under-perform. This is because over time the over popularity stock makes the stock overvalued and less profitable and vice versa. So price reversals become imminent.

This blog is written for Orient Financial Brokers, an online stock broker in UAE offering Stock Market CFD Trading in UAE, Bahrain, Saudi Arabia, Qatar and Syria.

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سبتمبر 18, 2015

Forex Trading Strategies

Successful professional traders do many things that amateurs often forget. They plan a trading strategy, they follow the markets, and they diarize, track, and analyze each of their trades. Reasoning of the trade: Why buy or sell? Which pair? Documentation and analysis of the results. Timing of the trade: Why now? Before economic news releases or after? Day or night? Money management. Trading objective: What is the take profit target? What is the stop loss?

The forex market is the largest and most liquid of the financial markets. Daily activity often exceeds $4 trillion USD a day, with over $1.5 trillion of that conducted in the form of spot trading. It is the existence of volatility within the forex market that enables trader’s to take advantage of exchange rate fluctuations for speculative purposes.

 Forex spot trades consist of a contract to trade a given amount of a currency pair with a market-maker, at the advertised buy / sell price . Traders must be aware that greater volatility also means greater risk potential. It is important to understand the correlation between liquidity and market activity. the most successful Forex traders are people recognized for their humility and discipline. These qualities are acquired trough experience and accepting some simple realities of the Forex market.