With February Coming To A Close, What To Expect From The Market In March?

The start of 2022 was promising!

The lockdown had led to a drop in global GDP and everyone was geared up to see a market recovery. All predictions were that the market is going to gain momentum after the two years of pandemic.

With the emerging markets seeing a good demand and rise in individual and corporate spending, the predictions for 2022 were mostly positive. Even with the understanding that the market will need correction, January saw a jump in the number of investors along with a demand for certain sectors and investments. 

The pandemic was moving on to an endemic stage and countries had started to open borders. The industries highly affected by the pandemic were all set to open their doors to make up for the losses suffered. But, January eventually turned into a volatile month with dips and highs, forecasting a shadow onto February. 

February has been even more volatile and has kept the investors on their toes. Many factors have affected this, especially the Russia-Ukraine crisis. March is also looking to be a wait and watch month for the investors.

Reasons For March To Be A Low Month

Russia-Ukraine Crisis: The outcome of the current tension on the markets is one of the main reasons for one to stay back and wait. Not only the impact on the commodities market, but also the eventual effects on the Russian business and neighboring European countries could result in creating a huge strain on the markets. However, a peace deal may lead to a positive impact. 

Federal Reserve Outcome: The upcoming meeting for the Federal Reserve in mid March is to review the interest rates increase. With the rising inflation, the Federal Reserve wants to hike the borrowing rate and try to encourage the saving mentality. The market has factored a hike of 25 basis point but if the Federal Reserve announces a higher increase in interest rate, the market will definitely see an impact. 

Crude Oil Rate: The crude prices crossed $100 per barrel for the first time since 2014 before coming back down to $96 this week, the markets looked bleak. The impact of increased fuel prices on an already high inflation will put a strain on market performance. The oil price does not only affect the market but also major industries and individuals.

Like the airline industry which has seen the worst couple of years with the pandemic will struggle to cover its lossed if the price of oil does not stabilize. 

Year-End Rebalancing: With the financial year ending, the impact of all these factors will play heavily on the index heavy weights and thus in turn impact the index overall. The buyers looking to book in the profits will also result in a volatile market.

As An Investor What To Look For?

The best thing to do right now is to keep oneself updated on the conclusion of the Federal Reserve meeting. Also follow the response by the various countries in regards to the Russian invasion of Ukraine,  as these will play the biggest role in swaying the market one way or another. 

Trade in UAE Market Indices with VPFX

Lets understand what an Index is? Index is a measurement of value of a section of the stock market. It is estimated from the prices of selected stocks that are related in some way with each other. And index trading provides exposure to an entire economy with a single trade.

One of the most popular ways to trade indices is through CFDs (Contracts for Difference). Traders can be benefitted from both fall in prices and rise in prices, as you can open a long position if you think the index is going to rise and you can open a short position if you think the index is going to fall in the near future.

Indices trading allows you to get an overall exposure to companies listed in the stock market and considered as the passive trading style wherein risk of losing money is lowered with an opportunity to hold a diversified portfolio.

At VPFX we offer two kinds of trade in CFDs : Index Futures and Cash Indices

Generally traders who have a long term outlook prefer to trade in Index Futures and get a wider spread on funding charge. 

Whereas traders with short term outlook and trade at the spot prices of the underlying market, generally have higher spreads than index futures.

Let’s look at Indices Trading in UAE Market,  DFM (Dubai Financial Market) indices represents the overall  performance of DFM- Listed Companies, providing a comprehensive and complimentary set of indexes DFM General Index, DFM Sharia’s Index (DFMSI), S&P/ Hawkamah UAE ESG Index on the top performing listed companies in UAE.

If we compare today’s market performance (DFM Index Value 3309.28) with the last three days (3330.05) there has been a fall of nearly 20 points (0.62%). 

In order to start index trading one must compare different Indices Trading Platforms on the basis of :

  1. The amount required to open an account. At VPFX we do not charge any minimum amount to open an account and no transaction fees.
  2. The amount of margin that platform provides. At VPFX you get a leverage ratio of 1:500 which is one of the best leverages offered.

Different indices are traded in different times, one must consider the time periods wherein markets are majorly volatile or the market volumes and prices tend to go wild looking upon the latest news and events happening in the concerned area.  If spoken in general terms, the best time to trade is simply when the market opens. 

Let’s assume that the DFM market is trading at 3330.05. The technical indicators suggest that the next day open is going to be moving upwards and you decide to purchase a lot so for every price movement there is a profit or loss of 1 AED.

Now after three days market opened at 3350.50, now your profit will be calculated opening price less closing price (3350.50 – 3330.05)*1 = 20 AED.

At VPFX, the profit and loss are automatically converted into your account currency in real time, based on the current exchange rate.

VPFX provides its traders with best indices trading tips and strategies to make benefit of the opportunity market has for us.

Energy Trading For Profitability And Diversification

As a seasoned investor, as you look back on your journey so far, the excitement of the stock market seems like a distant memory. The various iterations and derivatives of stocks and options seem grossly overdone. You still have money invested but the lure of the stock market has faded away.

  • You have an appetite for more.
  • You are looking for something exciting and detailed that will satiate your appetite.

Energy trading, it appears, will tick all of your boxes. Online energy trading differs in a range of ways from traditional markets.

What Is Energy Trading?

Energy produced is purchased by suppliers who sell it to consumers. The contract between producer and supplier is where the energy trader is positioned.

Energy is produced on the wholesale level without the intent of storage. It is produced to be consumed immediately as the means to store it are ineffective as far as cost is concerned. This balancing act between supply and demand of what is essentially a commodity is unique to energy trading markets alone.

Energy trading is steered by asset-trading companies that use production, demand, and price forecasting to enhance the income generated from the creation of energy.

Who Is Allowed On The Energy Trading Platform?

Energy trading platforms have limited access, firstly owing to the capital prowess that needs to be displayed to the energy trading platform and secondly owing to the daunting mechanics that need an in-depth understanding before taking the plunge.

What Is Risk Management In Energy?

This branch of energy trading calls for evaluating the relationship between energy product choice and working plans as well as finding, assessing, and examining risk related with instability in the energy trading and monitoring markets.

  1. ETRM- Energy Trade and Risk Management
  2. CTRM-Commodity Trading and Risk Management

The names are used for a range of energy trading app solutions which support the trading and risk management of commodities.

Which Are The Energy Trading Platforms?

Energy was traditionally produced mainly by governments for use within the country of origin but private players have entered the largest markets in the world taking the burden off the governments. In India Indian Energy Exchange Limited (IEX) is the power trading platform whereas European Energy Exchange AG (EEX) deals with Power, Natural Gas, Emission Allowances, auctions for Guarantees of Origin in the European Continent. These markets are power players as both their populations command a very high volume of energy demands.

What Are Some Energy Trading Tips To Follow?

  1. Learn as you grow with smaller sums of investment and gradually move as you get to know more.
  2. An in-depth initial study of how the energy trading market works is necessary for a firm first step.
  3. There is a lot on offer so diversify your investments to over several offerings to distribute your risk.

If you are looking to dive into the ocean of opportunities that energy trading can offer, register with reliable trading partners at VPFX. For more energy trading tips, visit this article.

Conclusion

Energy trading, much like the world, moves on oil and that demand for oil is far from exhausted. The volatility of the oil market has made the energy trading sector only more lucrative. Execution of a meticulous study of the energy trading market promises to yield handsome results.

The Best Unwritten Online Share Trading Advice

It is Midday. Your watch stopped. It’s a time piece that completes your look aka you cannot take it off. This beautiful but seemingly useless piece is still scheduled to display the right time, twice a day.

As an investor, when you receive a stock tip how do you know if or even when the advice will manifest into reality? Like your timepiece, when will the tip be true?

All of the online share trading advice listed below will help you be a better trader to understand when or even if the advice you receive will be true. When you meticulously inculcate these tricks to form unconscious habits, you will have achieved the moniker of a seasoned trader with higher rates of successful trades. 

1. The Golden Rule

Keep in mind this one golden investment rule: ‘Never invest money that you can’t afford to lose’. If your portfolio is stressing you out, it is your subconscious telling you that you need to balance your investments in high, medium, and low-risk investments.

2. Failing to prepare equates to preparing to fail

Back testing is a concept that share trading platforms have put in place on their share trading apps for traders to test the market with virtual money using real-world historical data. This exercise permits traders dabbling in online share trading to test the real market with zero risk helping to formulate a tailored trading plan.

3. Take time to understand what you can dedicate to trading

If you can dedicate several slots of your routine to the act of online share trading on your preferred online share trading app like VPFX, you may be suited to the practice of day-trading where investors buy or sell instruments with the end goal of making a profit at the end of the trading period of the day. The behavior of the instruments that investors trade with as day traders differ from the ones opted for by long term investors. Day traded instruments usually take advantage of minor price changes but usually involve larger volumes and capital investment.

4. Never stop your study

Irrespective of how long you have been an investor, you will never fully understand the market. The ongoing study of economic changes and how they may positively or adversely affect price, is a skill that only continuous education can give. As you delve deeper, study even the share trading tips that you receive to understand why they are true or to understand why they are untrue.

5. Best-Practices matter

Since the advent of publicly traded stocks in Amsterdam in 1611, the plethora of investors indulging in the practice have made a bevy of mistakes and have learned from them. These teachable moments have led to best-practices while dealing with any stock market. A valuable example is a stop-loss that is a set order to sell a security when it hits a predetermined percentage of the original price.

6. Trade with resolute commitment

Business owners know that their activities earn profits and the better they perform, the larger their rewards will be. Approaching your share trading platform activities in this manner will help you understand that you will not be receiving a fixed paycheck at the end of every month. Commit to trading and learning about it in all earnest and expect to incur losses, taxes, anxiety, and the likelihood of certain risk.

Conclusion

If you take the time to consider how these bits of information intertwine, you will understand the very fabric of online share trading like a professional. Discipline yourself to gradually increase your tolerance for inevitable fluctuations.

Using share trading apps to trade is a gamble and the house always wins so follow these rules to understand when you need to cut your losses to stay ahead of the game.

Here at VPFX, we ensure Ultra-Fast Execution of transactions to make sure that you get the best prices. We ensure that no delays interfere with your online share trading activity with most orders being executed in less than ~40ms*.

How To Diversify Your Online Cryptocurrency Trading

You work hard to earn your money and you definitely want your hard-earned money to work for you. Any financial advisor worth their weight in salt will advise you to invest your hard-earned money into a security that is stable.

“Invest in securities that are not volatile”, is the rule of thumb.

The world itself is volatile, along with all in it. Finding a security that is averse to volatility is practically impossible.

 To combat this factual reality, diversification is the key.

By scattering your investments around independent investment markets, you are less susceptible to major financial setbacks, if one of your many small investments falls through. Diversification is a much-needed value that needs to be inculcated in investors that dabble in online cryptocurrency trading.

Though your financial advisor may advise against this often-unstable asset class, these moments of volatility in online cryptocurrency trading are viewed as an expected unpredictability by hardened investors.

Diversification in crypto trading is not as straightforward as is in other investment avenues like the stock market. It is like niching down to find a mutual fund that invests mainly in companies that boost agricultural innovation through tech.

So, the million-dollar question is, how do you positively contribute to your financial advisor’s mental wellness while indulging in the upward trend of online crypto trading?

Build A Crypto Trading Portfolio

The answer is to not invest in just one form of cryptocurrency but build a crypto trading portfolio.

With over 5,000 types of cryptocurrencies currently in existence, a crypto trading portfolio is an assortment of cryptocurrencies (including altcoins and other crypto financial products) that you can own.

There are several portfolio trackers that offer online tools as well as software platforms that you can use to analyze your assets and earnings.

Use a Reliable Crypto Trading Platforms or Exchanges 

Since online cryptocurrency trading is decentralized in the sense that there is no central exchange or regulator that commands any authority over its operation and it does not rely on intermediaries such as brokerages, exchanges, or banks; there are several exchanges that you can buy crypto from or sell crypto to.

When crypto trading, if the price of the chosen coin fluctuates hurriedly, all the exchanges involved in trading aren’t able to update their prices on the fly. This inability for the various exchanges involved in trading to keep up with each other reveals a variation in price for the same crypto asset at the same moment in time. Trading to take advantage of these price differences across crypto exchanges makes for what is known as arbitrage trading.

Tread With Caution

Keep in mind the fact that managing a diversified portfolio requires more time for research into each of your investments. The larger your portfolio, the more time you have to invest in learning and development to predict the behavior of your crypto assets for trading competitively.

An over diversification of your portfolio leads to it averaging out which leads to your portfolio behaving exactly like the market does.

What you want to aim for with the diversification of your portfolio is to make a profit on the meticulously chosen investments even when the market shows an overall downturn.

Build Me Up Buttercup

Depending on personal experience with crypto trading strategies or investment in general, your advisor may have a unique point of view but consider these general rules of thumb:

1. There’s one golden investment rule that you should always keep in mind: Never invest money that you can’t afford to lose. If your portfolio is stressing you out, it is your subconscious telling you that the balance is off.

2. As a start, invest in high, medium, and low-risk investments and keep an eye on what works for you. It will help you learn to disinvest from what you are not able to predict accurately. This exercise will lead to a well-researched portfolio.

3. Cryptocurrency trader investments are like riding a cycle. Balance is the key. If one coin has given you returns, you have to fight the urge to dump all of your investments into that asset in the hopes of winning big. Don’t put all your eggs in one basket.

4. Owing to the volatility in the crypto trading platform, past learnings don’t always hold true. As you gain experience in crypto trading, a little flexibility in investing new assets and disinvesting in what is not working for you will only help.

5. Stablecoins possess the unique ability to swiftly and effortlessly latch-in gains or sell at a predetermined value. It offers a promise to quickly liquidate your asset.

6. Never stop learning. Keep reading about your investments and what they are up to while keeping up with the latest happenings in the cryptocurrency trader market. A small piece of information can go a long way to avert disaster.